While the North American heavy trucking industry was already due for a slight dip in 2020, the global COVID-19 pandemic has compounded the situation. In this post, we will cover what was expected for 2020, what we can anticipate moving forward, and what Pentaflex is doing about it.
The Industry Trends
Like every industry, trucking goes through economic cycles that last on average about 4 years per cycle with a typical recession lasting about 10 months.
What does this mean?
COVID-19 is not the first time this industry has experienced unprecedented turmoil. While this awful pandemic has seemed to impact health care, job security, and basic livelihood, the trucking industry experiences large setbacks like this regularly. What
Was Expected in 2020?
The trucking industry as a whole saw a huge boom in the numbers starting in 2017 and lasting through 2019, which statistically would mean we were already preparing for a drawback in 2020.
Experts were predicting a gradual dip from Q1 through Q3, and then the trend would slowly creep back up as we moved into 2021.
Even though 2020 was anticipated to be a soft year in the industry, it has only been exasperated by the COVID-19 pandemic.
What Can We Anticipate Now?
As 2020 began, we saw the expected downward trend in the industry. But, as COVID-19 took its full force effect moving into April, we saw a more than shocking dip in the market. However, as always with economic trends, there is light at the end of the tunnel.
According to the Coyote report for 2020-2023, we have already experienced the market floor at the beginning of May. While the industry will not recover overnight, we will still see the normal trends as expected, just nine to twelve months later than expected.
What Does This Mean?
While there is no need to panic, it is time to go into a defensive state, protecting cash flow and implementing leaner and more efficient processes and supply chains. As with any recession, you will most likely see some businesses either have to decrease their production abilities or shut their doors altogether.
This is also the time to diversify your suppliers. If you were on the fence about a certain process or agreement, now is the time to get your ducks in a row before the rest of 2020 and 2021 play out.
Basically, everyone in the chain needs to be very nimble to get through the already expected downturn and be able to react quickly to customer needs as their demand increases.
Keep in mind that these numbers are based on the assumption that the economy will not be hit with another COVID-19 wave this fall and our country and world would be put on pause again. However, that possibility only strengthens the need for double-checking your processes, checking in on your team, and clearly articulating your abilities to your customers and your needs to your suppliers.
What About Pentaflex?
We are still here. Through years of listening to our customers and our team, streamlining processes, and preparing for the future, we are still able to provide the highest quality in metal components. We will continue to keep an eye on the trends and will always communicate clearly with our customers, our employees, and our community. And we look forward to providing for the trucking industry at full force when we see the end of this recession in the near future.
Questions? Call Pentaflex directly at 937-325-5551 or contact us by filling out this form.