Economic and Political Trends Affect Transportation Industry

This past year was a tough year for the transportation industry. The tariff wars with China and the trade wars raise the risk of an economic recession. An economic recession would cause issues in the industry worldwide. Some researchers believe that all these issues have already led to an industrial recession. An industrial recession is an economic decline in manufacturing. Recently, there have been increases in trucking company bankruptcies, which has lowered capacity across the country. All these issues combined shows evidence that 2020 could start off as a tough year for both shippers and carriers. And it all starts with our politicians and their policies.

Politicians and Their Policies

Politicians and the policies they create dictate the US economy, effecting all industries. This past year the transportation industry saw effects because of the trade and tariff wars induced by the Trump Administration. With the upcoming election, many media outlets have expressed that President Trump will be forced to make deals regarding the tariff issues with China and the restructuring of the North Atlantic Treaty Organization (NATO) to avoid scrutiny. He claims deals with both are close to being ratified, but only time will tell how successful they are.

Climate Change

It is obvious that climate change will be a major debate topic in this election season. The top three Democratic candidates all discussed the need to combat the slowing of greenhouse gas emissions. This is an important issue that needs to be addressed, but it will have some serious effects on the freight industry. According to the Environmental Protection Agency (EPA), transportation generates the highest percent of greenhouse gas emissions in the U.S. at 29 percent. It is unclear how this will affect the industrial transportation industry.

While on the topic of climate change, it is also notable to point out the amount of natural disasters is on the rise. From 1980 to 2014 there was an average of 5.4 disasters per year. In the last five years that number has jumped up to 13.8 per year. From California wildfires to hurricanes ravishing the East Coast, these disasters stop shipping operations and raise carrier rates by going into extreme weather conditions.     

Takeaways from this post:

  • There is a lot of uncertainty in the transportation industry with the current issues in the world economy.
  • Deals to end the tariffs effecting our industry are close to being made.
  • Climate change is a hot topic and changes to transportation could be coming soon.
  • Natural disasters are increasing ever year. Staying up-to-date on potential storms can help prepare your business.

It is important to note that politics and the economy have effects on the transportation industry. The industry is ever changing with new regulations, policies, or capacity issues. Which is why it’s important to work with a partner who stays up-to-date and helps educate their customers. Trinity Logistics is a member of many industry associations, including EPA’s SmartWay program, and attends conferences to stay educated on industry trends and changes.

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