So far, in 2022, there are few topics that have been as widely discussed as inflation and the distressed state of economics. Whether or not you consider yourself invested in economics, inflation can have an effect on virtually everyone and everything – including that of the trucking and transportation industry. While certain industries have been been hit harder than others, truckers and those working in transportation are wise to at least know how the state of economics can affect their industry – whether it’s a positive or negative effect. In today’s blog, we’ll be taking a quick look at how inflation has and continues to affect the trucking and transportation industry. If that sounds interesting, keep reading below for more information!
Background on Recent Inflation
Many agree that recent inflation began alongside the COVID-19 pandemic, which began in 2020, though one could argue that it’s due to a number of different causes. As the pandemic began, demand for products largely outweighed supply for many industries, then, as economies began to return to normal, the transition proved to be troublesome for many industries – with supply chain issues becoming a common factor. This has meshed with many socioeconomic issues of the pandemic, such as a reduction in workforce and limited work seekers, to cause a crippled economy that the nation continues to grapple with.
What This Means for Trucking
As inflation continues, money will continue to have less buying power. Thus, truckers can expect to see a rise in cost for a number of things. Equipment, most prominently, will likely rise in price. According to Truckinginfo.com, there is an estimated “$8,000 to $9,000 increase on what used to be a $30,000 trailer because of higher lumber, aluminum, steel, and polyethylene costs.” Additionally, with less of a workforce to make shipments, a rise in labor costs will likely have a ripple effect that reduces the value of your money. It is expected that your capital budget will not get you as far as normal.
In addition to this, a recent rise in gas prices has proved to be a burden for many both in and outside of the trucking industry. With higher fuel prices, truckers and trucking companies can expect to allocate more money for gas in their budgets.
Why Choose AWA for Your Transportation Collection Needs?
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