Trucking companies appear to be hanging onto workers in a tight job market despite softer freight demand.
US for-hire trucking companies shed jobs in September, though not as many as expected, as freight demand remained soft heading into the fourth quarter and peak holiday sales season.
Trucking companies may not be hiring, but employment data suggests they are holding onto workers as they try to anticipate shipper demand for capacity in the fourth quarter. Forecasting demand during this year of economic uncertainty is difficult, however, and that clouds labor market needs.
Motor carriers may be concerned that in what is still a tight job market, any employees who are let go temporarily would not be available when demand rises again.
For-hire trucking lost 1,300 jobs in September, after a revised loss of 30,900 jobs in August, according to non-seasonally adjusted data released Friday by the US Bureau of Labor Statistics (BLS), a Labor Department agency. Seasonal adjustment by the BLS indicates the Labor Department agency expected a loss of 10,100 jobs – closer to the actual number of trucking jobs lost in September 2022.
The non-seasonally adjusted numbers represent real employees holding real jobs driving trucks and working docks, as well as managing freight operations. The substantial drop in trucking employment in August reflects the closure of Yellow, the third-largest US less-than-truckload (LTL) provider.
Yellow at the end of 2022 employed about 33,000 workers, including approximately 22,000 members of the International Brotherhood of Teamsters.
In contrast, courier and messenger firms added more jobs than projected – 19,400 in September -- while warehousing firms added jobs but fell short of expectations, according to the BLS data. Those sectors seem to be in a stronger position than trucking when it comes to staffing.
But trucking employment, while down 1.2% year over year last month, was up 3.3% from September 2021.
Unpredictability
The employment data underscores uncertainty about the US economy and holiday sales that are difficult to predict.
“We're referring to it as a ‘peak in pockets,’ with pockets of the geography seeing more of a peak, but it is very muted and softer,” Brian Alexander, executive vice president and COO of intermodal provider Hub Group, said at the Journal of Commerce Inland Distribution Conference in Chicago last month.
Alexander said shipper customers are still seeking stability in capacity and in their networks, rather than simply transportation savings. That may be one reason trucking companies have lost relatively few jobs, outside the job losses caused by the closure of Yellow on July 30.
Trucking companies in recent months have doubled down on attempts to keep employees on their payrolls and reduce turnover, carrier executives have told the Journal of Commerce.
The change in the non-seasonally adjusted job numbers kept the Journal of Commerce For-Hire Trucking Employment Index at 104.2 in September, flat with a revised 104.2 reading for August. That indicates trucking employment, despite its recent drop, is still about 4% higher than in 2018, the base year for the index and the strongest year for trucking in the pre-pandemic decade.
The BLS expected a much sharper seasonal drop in trucking employment in September, as shown by a seasonally adjusted increase of 8,800 trucking employees. However, that seasonally adjusted number does not represent an actual increase in the number of jobs on trucking company payrolls.
Instead, the seasonally adjusted numbers reflect how trucking performed against seasonal expectations, said Jason Miller, associate professor of logistics at Michigan State University and a contributor to the Journal of Commerce.
“What this represented was carriers reducing payrolls by far less than would be expected with typical seasonality,” Miller said.
Trucking has lost jobs in September from August in seven of the last 10 years, according to non-seasonally adjusted BLS data.
Couriers, warehouses add jobs
Courier and messenger firms, including last-mile delivery companies, added 19,400 real jobs in September, though seasonal adjustment only showed a gain of 1,200 jobs. “They gained a few more jobs than expected by the BLS,” Miller said.
The increase in courier and messenger employment this September corresponded to strong gains in the same month last year and in 2021, the BLS data shows.
Warehousing firms added 11,400 actual jobs in September, but the BLS expected them to add upwards of 15,000 jobs, which led to a seasonally adjusted “loss” of 3,800 jobs – the inverse of the relationship between the non-adjusted and seasonally adjusted employment numbers for trucking last month.