Few elections have featured two nominees as divisive as Hillary Clinton and Donald Trump. And while the nation wrangles over whom to vote for, consumers are filled with anxiety about what the next four years will bring.
As their anxiety builds, consumers are slowing their spending. It’s having a major impact on the trucking industry, too, as trucking clients throughout America curb their own spending in response to consumers’ frugality leading up to Election Day.
Consumers feel apprehensive
“The economy moves the trucking industry, and for whatever reason, businesses slow their freight down during an election year,” says Anthony Leichty, a company driver who hauls cars for Toledo, Ohio-based Irelan Trucking. “You really feel it during election years because no one knows which side is going to be in power next. It’s kind of a fear thing. People get afraid.”
Car hauling especially slows down, because cars are a substantial investment for consumers, says Leichty, who’s had a CDL trucking job for 16 years.
“My first year with this company was an election year,” he says. “I made $37,000 that year. The very next year I made $55,000. I attribute that to the election being over. The economy ticked back up.”
Comparatively, business slowed this year, but not drastically, Leichty says.
Normally, Irelan runs about $4,500 in business per truck a week. Right now, it’s running about $3,500 to $4,000 in business per truck weekly.
However, Marci Hinton, president and director of safety at refrigerated carrier Coldliner Express, says the election has in fact greatly impacted her company’s business this year.
Big companies such as Kroger and Wal-Mart buy from Hinton’s clients—recognizable food brands such as Tyson and Hillshire Farms. “Refrigerated products are time sensitive,” Hinton says. “So when buyers like Kroger and Wal-Mart place orders with my customers, they order based on our economy. When consumers are afraid of what is to come with the election around the corner, they buy and order less.”
Hinton really noticed a drop off in inventory this summer.
American families curtailed their spending. In response, Kroger and Wal-Mart curtailed theirs.
“The average middle class family lives on a budget,” Hinton says. “When they are worried about where our country is going to be in the next six months, they don’t spend the money on family parties and cookouts. Instead, they put that money back. During the summer is when you usually see a big increase in hot dog and ground beef purchases, but this year it was down over 20 percent due to the election.”
Refrigerated trucking is the sector likely affected most during an election year, Leichty says.
Because every major trucking company has a refrigerated division. Companies don’t want to sit on food if consumers aren’t going to buy it.
“Companies don’t want to take the chance of a huge profit loss in an election year, so they just slow production down,” Leichty says. “During an election year, go to Wal-Mart. You’ll see they have a smaller stock than they normally do. They don’t order as much during an election year.”
One of Hinton’s clients already has stopped delivery to certain regions until the election is over.
The company simply is not selling enough inventory. It’s had to throw product away, so it’s chosen not to sell in certain cities until after Nov. 8, Hinton says.
“It impacts the amount of orders I receive from clients,” Hinton says. “I have to go to a broker board. A broker finds freight for trucking companies to ship. We have to go on a board and work with companies we don’t know real well. We go through all of that and then sometimes they end up canceling the load.”
Broad impact felt across the board
The election’s impact is felt across the trucking industry, from fuel surcharges to freight capacity.
Business owners would be smart to keep a savings account for anything that might happen unexpectedly, says Drive My Way contributor John Reed, an owner operator leased to Mercer Transportation. For those with owner operator trucking jobs like him, Reed recommends setting aside $20,000 for emergencies during an election year.
“A lot of small owner operators are worried about upcoming economic changes because they may not have enough money to correct their business model before they can adapt to the change,” Reed says.
Owner operators, however, also have more flexibility than company drivers in where they can fuel up or purchase tires.
Through that flexibility, they can save money.
“It’s easier for owner operators to adapt to presidential change than it is for a larger company to adapt,” Reed says. “When you have to bring your ideas in front of a board of directors to create change, it has to go through a voting process, whereas an owner operator can virtually change something overnight if he sees something that’s not working the way it should.”
Things should stabilize after the election, when Americans have a greater understanding of what their future holds. Until then, expect Americans to continue clutching their purse strings ever so tightly.
Want an escape from news about Trump and Hillary? Follow Drive My Way on Facebook here to diversify your newsfeed.
Want to find a job you love?
Drive My Way matches drivers with jobs based on their qualifications and lifestyle preferences.