- Truck drivers' earnings sank in 2019, and thousands of trucking companies have gone bankrupt .
- The federal government's August job report confirmed that 4,500 truck drivers lost their jobs in that month alone.
- It was the first time since March 2019 that truckers saw job losses.
- Visit Business Insider's homepage for more stories.
Truck drivers like Chad Boblett, a Lexington, Kentucky-based owner-operator, said 2019 has been a "bloodbath." Rates in the spot market, where loads are moved on-demand rather than being facilitated through a contract, are down 15% from last year, when truckers reaped historic profits .
- And now, the federal government's jobs report confirms that truckers are losing their jobs by the thousands. According to preliminary payroll numbers reported by the Bureau of Labor Statistics last week, around 4,500 trucking jobs were eliminated in the month of August.
- It is the first time the BLS reported a slash in trucking payrolls since March 2019, when 1,200 truckers lost their jobs.
- That's also the biggest drop since April 2018, when some 5,500 trucking jobs were removed.
- Also in August, transportation employment as a whole contracted by 500. Nonfarm payroll employment rose by 130,000.
Indicators from the trucking industry have been sour in 2019. In the first half of the year, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That's more than triple the number of bankruptcies from the same period last year about 175.
New truck orders sank to a nine-year low in July of this year, according to ACT Research. That number rebounded in Aug., with a 6% month-over-month bump.
What the trucking slowdown means
The slowdown in trucking is worrisome even outside of the $800 billion industry.
Trucking is often looked at as a leading indicator of where the rest of the economy is headed. As 71% of America's freight is moved on trucks, companies foreseeing needing fewer trucks or fewer drivers is typically an omen of an economic downturn: If manufacturers are producing less and people are buying less, there's less of a need to move goods.
"Because trucking participates in all phases of manufacturing, it increases as manufacturing starts to ramp up, giving it leading indication on economic growth," Steve Tam, the vice president of ACT Research, previously told Business Insider.
When the rest of America is headed for a downturn, freight usually dips first, a new report from Convoy's economic research division said . Freight has been in a recession since October 2018.
And, while retail and consumer spending is trending upward, manufacturing is slowing down a sign that warns of a recession. According to one key measure, the US saw a contraction in factory activity in August for the first time since 2016. New orders also hit a seven-year low that same month.
"This piece of data is part of the puzzle that helps to push us into recession," Quincy Krosby, chief market strategist at Prudential Financial Inc., told Bloomberg . "The ramifications of the trade war show up in the eurozone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it's going to feed into the overall labor market."
Of course, the spooky signs in trucking doesn't necessarily mean the rest of the economy is headed down. The freight industry goes into recession twice as often as the rest of the economy, according to the Convoy study.
- Truck drivers spend hours every week unpaid. And a study shows that the vulnerable workers' biggest problem is only getting worse.
- More than 3,000 truck drivers have lost their jobs in 2019 as the transportation 'bloodbath' unfolds. Here's the list of bankrupt trucking companies.
- These were the most delayed airports in the US this summer