Announcing the Second Annual Ohio Trucking Association and Schneider Downs Transportation Business Outlook and Economic Survey

Schneider Downs has again partnered with the Ohio Trucking Association (OTA) to produce the Transportation Business Outlook and Economic Survey - 2020.  More than 850 OTA members were invited to participate in the survey which analyzed economic conditions, industry challenges, technology and regulations currently impacting the transportation industry in the state of Ohio.

Like most industries, the economics of the transportation industry were hit hard by the COVID-19 pandemic.  On a macroeconomic level, U.S. gross domestic product dropped by 5.0% and 31.7% in the first and second quarters of 2020, respectively; U.S. Consumer Sentiment decreased from 101.0 in February 2020 to 71.8 in April 2020, and it hasn’t reached above 80.0 since; U.S. unemployment rates increased from a low of 3.5% in February 2020 to a high of 14.7% in April 2020, and they remained above 10.0% through July 2020.  On a microeconomic level, all analyzed trucking sectors and customer industries saw COVID-related impacts to revenues and operations significant enough to skew 5-year average growth firmly into the negative.  However, economists forecast that a recovery is on the way, and OTA members are optimistic that conditions will soon improve.

Despite the challenges caused by COVID-19, OTA members have found that their biggest challenges really haven’t changed much.  Driver shortage remains the top issue in the industry.  As American Trucking Association Chief Economist Bob Costello said, “The fundamentals of why we had a driver shortage did not go away…demographic issues, age, gender, lifestyle issues…but for the moment, what has changed is that the demand side of the equation has fallen significantly.”  This persisting issue has led OTA members to explore new and unique tactics aimed at hiring and retaining qualified drivers.  Further plaguing the industry is the continued rise of insurance costs, driven by precipitous increases in both the number and size of nuclear verdicts (i.e. any large jury awards in which the penalty exceeds $10 million).  To combat this issue, trucking owners/executives must invest considerable time and resources into increased training and documentation, more rigid human resource practices, building relationships with their insurance carriers and upgrading technologies.

Technology itself was deemed to be significant in this year’s survey.  The increased emphasis on new and improved technologies has resulted in trucking companies accumulating copious amounts of data, but not always knowing what to do with it.  Although a majority of companies were found to be utilizing data analytics to further their business, the results of our survey indicated that over 5% of companies are not utilizing it to forecast financial results, almost 15% of companies are not utilizing it to forecast operational results, and over 25% of companies are not utilizing at all.  And of course, with increased data comes the increased concern of data security.  Over 70% of respondents identified cybersecurity as a critical issue to their business (a sharp increase to the prior year’s results).  And over 30% of respondents indicated that they either had implemented or were in the process of implementing a formal disaster recovery plan since the onset of COVID-19.

Although COVID-19 caused turmoil within the industry, it did come with somewhat of a silver lining, in the form of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  The CARES Act provided for, among other things, Paycheck Protection Program (PPP) Loans and a host of tax law changes.  Over 76% of respondents have received COVID-related aid, with the vast majority (92%) of those being in the form of PPP Loans.  Our survey report provides informative guidance aimed at helping companies maximize their forgiveness under these loans, as well as detailing the most significant tax changes resulting from the CARES Act.

Finally, no transportation industry report would be complete without mention of infrastructure.  Although it did not make the top 5 list of industry challenges, it remains a perennial issue impacting drivers and companies alike.  Congestion (note: Ohio contains 4 of the top 100 bottlenecks in the country) and deteriorating roads and bridges continue to add costs to OTA members operations, in the form of wasted fuel, labor, and vehicle maintenance costs.  Fortunately, the U.S. Congress is currently working on legislation (i.e. the INVEST in America Act) that would provide billions of dollars in much needed funding for road, rail, transit, and vehicle safety initiatives.

We invite you to read the full report here. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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