Looking ahead: Industry could be in for a steadier ride in 2022

From Freight Waves.

It’s no secret the logistics industry has faced significant pandemic-related volatility throughout the past two years. With 2021’s elevated rates and strained capacity, many shippers are holding out hope for significant rebalancing in the new year. They may need to wait a little longer, however, as experts suggest current market conditions could last well into 2022.

David Spencer, Arrive Logistics director of business intelligence, expects most of 2021’s challenges will bleed into 2022. Relief is unlikely to come quickly on the supply side as carriers continue to grapple with the driver shortage and parts shortages push delivery of 2021 new truck orders into mid-2022.

Instead, the reprieve is more likely to come from the demand side as consumers reevaluate their spending habits in light of rising prices and waning pandemic-fueled financial support, including the resumption of paused student loan payments in January.

“Demand will be impacted by consumer sentiment throughout the year. Costs of both goods and housing are rising, and despite recent news of President Biden’s Cabinet extending student loan debt relief, the impact on consumer spending is just pushed out further down the road,” Spencer said. “These influences on consumer spending should then translate to declines in truckload demand.”

Impact on demand is pushed further down the road. The impact to consumer sentiment should be the same, assuming the relief does not get extended again. President Biden’s Cabinet recently extended the relief on student loan debt.

As of right now, however, demand is stronger than ever and shows no indications of an immediate post-holiday crash. Changes on the demand front are likely to be slow and steady, leading to gradual market shifts over the course of the next several months.

See the complete article online at Freight Waves.