Transportation industry shows resilience as trucking positions increase in July, contrary to the overall trend; however, the warehouse sector experiences a sharp decline in employment.
In the latest employment report, the rail sector maintained its workforce stability with 153,200 workers employed, but the truck transportation and warehouse sectors faced significant challenges.
The truck transportation industry reported positive growth in July, with an additional 3,600 jobs, bringing the total to 1,523,300. However, this growth was not enough to offset the decline seen in previous months, as the industry is still 2,800 jobs fewer than it was a year earlier. The average hourly wage for non-supervisory and production truck transportation employees dipped slightly in June, falling back from the $31/hour level it reached in May, coming in at $31.04.
The warehouse sector, on the other hand, experienced a significant decline, shedding 6,400 jobs in July. This drop has brought the total number of warehouse jobs to its lowest since October 2021, with 1,818,300 jobs reported.
Industry experts like Aaron Terrazas, an independent economist, have noted the overall bleakness of the report. Terrazas stated that the combination of the July employment numbers and inflation data from earlier in the week presents a challenging situation for the Federal Reserve's next interest rate decision.
The challenges in the trucking industry are not solely due to market conditions. Regulatory changes could remove up to 175,000 drivers from the workforce, primarily driven by the English Language Proficiency (ELP) rule and immigration-related provisions restricting work authorization for parolees and asylum seekers. These removals would primarily affect immigrant drivers, who comprise a substantial portion of commercial drivers.
The decline in trucking spot rates, from $3.53 per mile in early 2022 to $2.28 per mile in mid-2025, indicates significant stress on supply and pricing within the freight transportation market. However, some industry groups like the American Trucking Associations and retail sectors have praised recent legislation extending key tax provisions and funding driver training, which may afford some stability and growth prospects to trucking companies.
Warehouse jobs are indirectly influenced by these trucking dynamics due to their interdependence in supply chains. While there is no specific detailed data on warehouse employment in the July report, the overall labor market softness noted for July and the trucking workforce challenges suggest logistical industries, including warehousing, are likely affected by slow job growth and labor shortages.
The report also showed significant downward revisions for prior months, with job growth slowing dramatically to 73,000 new jobs in July. The share of the unemployed who have been out of work for 15+ weeks was 40.9%, a number not seen since the end of 2021. The new entrant share of those who are unemployed was 13.4%, the highest since April 1988.
These challenges in the warehouse and trucking industries, combined with a slowing broader job market, underscore the need for continued support and policy interventions to help these sectors navigate through these difficult times.
- In an attempt to address the challenges facing the trucking industry, some industry groups have applauded recent legislation that extends key tax provisions and funds driver training, possibly offering stability and growth opportunities for trucking companies.
- As the challenges in the trucking industry persist, with spot rates continuously declining, the logistical industries, including warehousing, may also face repercussions due to the interdependence of these sectors in supply chains.
