This isn’t Shannon Newton’s first road trip.
The president of the Arkansas Trucking Association has seen plenty of ebbs and flows in her career leading and working in the transportation industry.
Economists and trucking executives are calling current industry conditions a “freight recession” which is causing a cyclical adjustment for companies throughout the nation’s supply chain.
“It’s very much like a recession-recession,” Newton said of a freight recession. “I think we’ve defined it kind of as a contraction in the demand over some sort of measurable period. The industry numbers indicate a contraction demand two months in a row. What you see is essentially the freight economy leading the anticipated recession that hasn’t really come.”
“You know, I think we’ve all been surprised a little bit by the fact that the overall economy has not slipped into a recession this year. Consumers continue to surprise with their spending on non-manufactured goods. So I think you’ve seen significant demand in discretionary spending for things that we regularly transport, and consumers are spending their money on leisure, travel, restaurants, and so our industry is bearing the brunt of that,” she added.
For trucking companies, Newton said she’s seeing a lot of belt-tightening as leaders find ways to control expenses and adjust to slower demand.
“I think you see all sorts of cost-cutting measures, and it’s somewhat of a hold on and brace. I think our industry is incredibly cyclical and so we anticipate that the demand will return, but what do you do in the meantime? And certainly, some cost-cutting measures like hiring freezes, you’re seeing some of that,” Newton said.
She also said many trucking companies will delay investing in new equipment or technology during a slowdown like this.
Newton said the trucking industry is also coping with the age-old issue of workforce. As aging drivers and technicians ease out of the workforce, appealing to younger workers is a challenge.
“I think a major challenge for our industry is providing that bridge from education to employment. We, as an industry, have suffered to provide an easy one, two, three to young people entering the industry,” Newton said.
She said there is greater effort to transition to the new economy and new workforce trends. The state legislature and Gov. Sarah Sanders have placed a new emphasis on workforce training that Newton hopes will be impactful.
“In the legislature, you saw a lot of attention on the trades and how do we help young people become aware of the opportunities that exist beyond a four-year college degree. And so really, everything that came out of the governor’s package, as well as some other individual legislative efforts with regard to making scholarships more accessible, educating young people about those careers, having people in the school, whether it be their counselors or those aides who are coming alongside the students, having the information because a lot of times people don’t realize that you can make $75-$85,000 without a four-year degree in our industry in rural Arkansas,” she said.
“We’re very excited about Mike Rogers [the new Chief Workforce Officer]. He comes from our industry or at least has some experience tangent to some of the challenges that our industry has endured. We do feel like having him in that position, and also just the willingness to kind of shake up the way that we’ve always done things, I think we’re really excited about the opportunity that presents,” she said.
You can watch Newton’s full interview in the video below.