Important W-2 Information Click here to read more.

close

Questions? 1-877-404-8458

Cooling demand may help extinguish driver burnout

12/10/2021

Several indications suggest buyers are purchasing less.

Mentally and physically drained from long hours and a supply chain crisis, truck drivers are feeling the sting of burnout. While the trucker shortage is surely contributing to their fatigue, perhaps the chief contributor is heightened demand. Seemingly unquenchable demand on the part of consumers is also fueling inflation, as supply can't keep up.

However, consumer demand is showing signs of letting up, suggesting relief for road-weary truckers may be on the horizon.

There are at least two signs of cooling demand. One of which has to do with the Outbound Average Length of Haul Index, or OALOHA. As noted by FreightWaves, the OALOHA is a metric that measures the average distance for the typical truckload of goods: where it begins (its point of origin) and where it ends (its destination). While longer lengths are suggestive of inventories being replenished, shorter lengths are indicative of a movement of more raw materials, which are used to make the items that are needed for inventory replenishment. Tracing back to August, requests motor carriers have received for loads transporting goods more than 800 miles have risen 6.5%. Tenders for loads moving 250 miles or less, meanwhile, have fallen 10%. As the publication points out, this may be an indication that shippers have ordered more inventory than they need, with buyers presumably being more mindful of their budgets as prices climb.

Shoppers, sales slide during Black Friday weekend
Another sign demand is softening is the lower than expected sales numbers during the kickoff to the holiday shopping season. Over the five-day Thanksgiving holiday weekend — Nov. 25 to Nov. 29 — approximately 180 million Americans participated, according to the National Retail Federation. That's down from 186.4 million last year — when COVID-19 lockdown restrictions were still in effect in some parts of the country — and from 189.6 million in 2019.

E-commerce holiday sales — a retail segment more reliant on truckers since products are traditionally delivered to consumers — also slipped. While 145.4 million people went online to potentially buy in 2020, that number fell to 127.8 million in 2021, the National Retail Federation reported. Actual purchases followed a similar trajectory, with shoppers spending a combined $33.9 billion online between Thanksgiving Day and Cyber Monday, The Wall Street Journal reported from estimates put together by Adobe Digital.

The truck tonnage index for November may provide additional clarity on the dip in demand, assuming that the advantage seasonally adjusted For-Hire Truck Tonnage Index slips. According to the American Trucking Association, the index has risen for three months in a row, now standing at 113 for October compared to 112. 6 in September. The November report will be released near the end of December.

While an easing of demand may come as a welcome change of pace for truckers burning the candle at both ends, ATA Chief Economist says the biggest issue facing the trucking industry is inadequate supply. Nevertheless, ATA Truck Tonnage Index is nearly 2% higher than it was this time last year and up 0.1% on a year-to-date basis.

Find a job near you now.

Search Jobs