Trucking jobs take a big hit in May

Thousands of trucking jobs were lost in May as overcapacity, low rates and high operating costs continue to plague the industry.

According to the latest numbers from the Bureau of Labor Statistics, more than 5,000 trucking jobs were eliminated from the economy in May. This marks the second consecutive monthly lost, which was preceded by a five-month growth streak.

David Spencer, vice president of market intelligence at Arrive Logistics, told Land Line that the drop in trucking jobs is to be expected considering low spot rates throughout the year. Low spot rates have led to lower contract rates. Consequently, carriers are being forced to reduce their driver count. April and May’s job reduction could signal the start of a downward trend.

“I am not surprised by the May employment data, given the persistent challenge of low rates and high operating costs for carriers,” Spencer said. “This is evident in the carrier revocation data, which shows that over 30,000 carriers have exited the market since Q3 of 2022. Ultimately, with no significant spot rate increases expected in our forecast this year, we anticipate employment will continue trending downward. Employment levels over the next few months will be a good indication of capacity correction progress, and in turn, how far we are from the start of the next inflationary cycle.”

Five months in, trucking jobs are down by nearly 2,000 for the year. Total employment in trucking is down by 30,000 jobs compared to a year ago.

Revised numbers reveal weaker trucking job growth in March, with an increase of 2,400 trucking jobs (compared to the initially reported gain of 4,100) and a loss of 900 jobs in April (compared to the initially reported decrease of 300).

Accounting for all transportation sector jobs, employment rose by nearly 11,000 jobs.

The transportation sector’s net increase was broad-based, with most subsectors showing gains. Some of the largest gains were among support activities for transportation (up 4,900), couriers/messengers (3,400) and air transport (2,600). Only two subsectors reported job losses: trucking and rail (minus 100).

Updated data reveal slightly lower job numbers for the transport sector as a whole. Employment increased by 19,500 in April, down from the previously reported gain of 21,800 jobs. March’s revised numbers show an increase of 5,300 jobs, a minor drop from the initially reported gain of 5,900.

Transportation jobs are up by 63,000 for the year, nearly catching up to the 69,000 jobs that were lost last year.

Month to month, wages dropped in May but remained higher year-to-year. Average weekly earnings of all employees in the transportation and warehousing sector went down by more than a dollar to $1,156.68. Compared to May 2023, hourly earnings increased to $30.60 from $29.14. Accounting for only production and nonsupervisory employees, average weekly earnings increased from $1,093.41 in April to $1,095.66. Hourly earnings increased by $1.36 from May 2023 to $29.14.

Across all industries, employment increased by 272,000 jobs, far better than the 190,000 jobs economists predicted. However, the unemployment rate rose 0.1 percentage point to 4.0% for the second consecutive month. Compared to the previous year, the unemployment rate for transportation and material-moving occupations increased from 5.6% to 5.7%. LL