In 2020, 3,140 U.S. trucking businesses shut down, 185 percent more than in 2019, according to Broughton Capital.
More than half of the failures took place in the year’s second quarter when the economy cratered as politicians locked down states’ economies in the face of the COVID pandemic. A record number of the closures occurred in May, Broughton reported.
The impact was hardest on small fleets. The average trucking business failing last year was 40 percent smaller than in 2019, Broughton’s data shows.
About 97 percent of U.S. trucking firms operate 20 or fewer trucks; 91 percent have six or fewer, the American Trucking Associations reported.
Smaller fleets lack the scale to negotiate lower prices on everything from spare parts to employee health insurance. They also depend more on the spot market, where shipments are booked without notice and prices are volatile.
The average charge for a spot-market shipment dove 12 percent in April 2020 from March to $1.64 a mile and bottomed at $1.60 in May, the Owner-Operator Independent Drivers Association said.
“The trucks were all there but what they had to move was cut by half,” association president Todd Spencer told the Wall Street Journal.
TREND FORECAST: We note this report to not only emphasize the devastating effects the COVID War lockdowns have inflicted upon the lives and livelihoods of millions but also to identify the growing trend of the Big’s getting bigger while small businesses go down and out.
Indeed, what will be lost by those who have been devastated by politicians’ decisions to lock down economies will be taken over by larger firms, thus forming more oligopolies and monopolies across the economic spectrum.
