This reflects that there is a decline in global shipping brought on by the sharp reduction of Chinese shipping in particular. This has produced a current shakeout in the trucking industry that should extend through the next six months and possibly much longer.
The reason of course is that China is in serious economic trouble and cannot get USA help until they capitulate to the demand for fair trade. This must end the CCP or force a massive reform in their general strategic positioning. I do think that Trump is now going for all the marbles in terms of Chinese reform. Why do it twice? and he has a creditable ally in Xi to facilitate all this.
However it will require sustained stress for the CCP to fully capitulate and for XI to implement a full range of real reforms while fending off internal threats. His relationship with Trump could facilitate all that. This takes a lot of time and may not be completed until at least the middle of next year.
Again all this appears scheduled for the next year.
At least 2,500 truck drivers have lost their jobs in 2019 as the transportation 'bloodbath' unfolds
Alleged Truck Driver Shortage
Flashback February 11, 2019: NPR says Facing A Critical Shortage Of Drivers, The Trucking Industry Is Changing.
Amusingly, such nonsense persisted even last month.
Flashback June 13, 2019: Will the Trucker Shortage Continue in 2019?
Will the shortage continue into 2019? All signs point to yes.
With the above silliness out of the way, please consider Transportation 'Bloodbath' Unfolds
Truck drivers are suffering in 2019 — especially those who own or work at small businesses.
Rates in the spot market, in which retailers and manufacturers buy trucking capacity as they need it rather than through a contract, sank by about 18% year-over-year in June. That has caused truckers like Demetrius Wilburn, a Georgia-based driver, to find themselves unemployed.
Wilburn bought his semitruck four years ago after years of working as a company truck driver. But amid rock-bottom rates, Wilburn wasn't able to make a payment one month — and his truck was repossessed.
Truckers' Fears at Recession-Level Highs
Business Insider reports Truckers' Fears Have Soared to Recession-Level Highs.
According to Morgan Stanley's regular freight survey, rate expectations are sinking into the negatives — "well below 2016 levels." That was the most recent time freight sank into recession.
Freight rates have dipped year-over-year for six months straight. Loads on the spot market, in which retailers and manufacturers buy trucking capacity as they need it, rather than through a contract, fell by 50.3% in June year-over-year.
At the peak of every cycle there is always an alleged shortage.
Anyone recall the "shortage" of Florida condos and housing in 2007?
Reality Sets In
Hello. About that alleged truck driver shortage ...
I never bought into the truck driver shortage thesis. In fact, I frequently stated millions of driver would lose their jobs due to automation. Today's news is not even a down payment.
Also, please consider my post from earlier today: Recession Looms: Cass Freight Index Negative for 7th Month
Shortage of Common Sense
There is no shortage of trucks or truck drivers. But there is a shortage of common sense starting with the Fed.
Make financing cheap enough and people buy trucks. Lower interest rates enough and people speculate in housing. Unfortunately, the Last Chance at a Good House Price Was 7 Years Ago.
It's not just the Fed. The ECB Perfected Corporate Zombification as negative-yield junk bonds take hold in Europe.
Repossession of trucks and inability to pay back loans is a major thing. Debt Deflation is Coming.
Finally, please don't count your chickens on that alleged "longest expansion in history".
The NBER is the official arbiter of recessions. It's possible we are in one right now. If so we may not know for a year.
The point is moot as a month or two here or there is irrelevant.
This isn't: When you blow bubbles, they eventually collapse.
Meanwhile, heading into recession, if not already in one: Congratulations Debt Slaves! You Owe the Banks a New Record Amount of Money.
Good luck with that.
Mike "Mish" Shedlock