It’s been all but impossible to ignore the fact that 2024 is an election year in the United States. As the race heats up and dominates the news cycles, shippers across the country are watching closely to see how the road to the ballot box might affect the freight market.
The outcome of a presidential race can have far-reaching effects, from consumer spending to regulatory changes, and the freight industry isn’t immune. Preparing for shifts in the market is critical for shippers — but how can you know what to expect?
Anderson Trucking Service (ATS) has seen plenty of presidential elections (17, to be exact) throughout our nearly 70 years in business.
We’re well-versed in the ebb and flow of pre- and post-election markets, and we’re passionate about helping shippers understand the factors at play so they can make the best business decisions possible.
In this article, we'll explore how the freight market tends to behave in the lead-up to an election, what to expect once the results are in, and how to prepare for the next four years under a new President. Let’s dive in!
- The freight market during election season
- What to expect after the election
- The new normal: beyond Inauguration Day
How Does the Freight Market Change In the Lead-Up to Elections?
An election season represents a period of uncertainty in the market. As the freight market — and the country — waits to learn who the next President will be, buyers are likewise waiting to make any significant financial investments.
While the pre-election uncertainty is short-term, there is a general hesitancy to make long-term decisions in the meantime. And the less unanimous the expected outcome of an election is, the more that unpredictability will be reflected in the market.
The good news is that, in the case of the 2024 election cycle, the market has yet to indicate major uncertainty in either candidate. This balanced outlook bodes well for a relatively stable market heading into November.
The lack of a clear front-runner, coupled with the usual pre-election buyer reluctance, means that freight rates are unlikely to see dramatic changes before Election Day.
That doesn’t mean freight rates couldn’t see a major fluctuation before the election; it’s just to say that if one occurs, it’s improbable that it would be because of buyer behavior.
Even if a candidate did begin to pull far ahead of the other, that development would be unlikely to have a significant impact on the freight market.
If we were to see a marked change in rates during the pre-election period, a change in external factors (such as global geopolitical tensions) would be a much more probable cause.
So, while shippers can reasonably expect the political uncertainty to translate to reduced spending from their customers, they should also prepare for freight to behave somewhat abnormally.
It’s true that buyers will likely be treading water as far as spending is concerned, but those waters are somewhat uncharted.
The transportation industry has long been in a down market and is still experiencing some lingering effects of the COVID-19 pandemic.
As election cycle buyer behavior joins the mix, these forces may generate some unusual trends for both the freight market and the overall U.S. economy. Traditional methods of election season market prediction are less applicable in this unique set of circumstances.
Our best advice? Hope for stability, but prepare your supply chains for the possible repercussions of pre-election uncertainty meeting a historic freight recession. It could get a little weird out there!
Does the Market Change After the Election Is Decided?
The ballots have been counted, the winner has been announced, and one lucky candidate has given their first speech as President-Elect. What happens to the freight market now?
Shippers looking for signs as to how the market will react should look to the stock market. Historically, the stock market has been a good predictor of the overall market’s confidence in the winner’s forthcoming policies.
If the stock market plunges on Nov. 6, that’s a sign that the market believes the new President will be detrimental to the economy. If it booms, that indicates a belief that the incoming leader will be good for the economy.
In general, though, when election results are announced, the market snaps back to traditional post-election behaviors: A short but notable spike in consumer and business spending as a result of the newfound certainty in the country’s leadership for the next four years.
As for freight rates, there’s unlikely to be any immediate change based on the outcome of the election.
Rather, change will come later, based on the decisions buyers and shippers make in the post-election aftermath — a trickle-down effect that can take weeks or months to reach your rates.
How Soon Will the New Administration Affect the Freight Market?
Once Inauguration Day has come and gone, it’s natural to expect to see an immediate impact of the newly-minted President’s stances and policies — but that may not actually be the case.
From a policy standpoint, the first two years of any presidency are oftentimes little more than the remains of the previous administration. Only after the old policies have taken affect can the sitting President make their own lasting policy changes.
In that sense, very little changes in the overall market post-election vs. before the election cycle began. But there can be one significant exception to this rule that depends on the incoming administration.
For each presidential candidate, there are issues that are campaign linchpins, the key point or promise that stands out as the backbone of their candidacy. Upon entering the Oval Office, the new President prioritizes action on whatever their linchpin issue was.
If that issue was an economic one, such as a tax plan or debt relief, expect to see that policy have an immediate effect on businesses.
Positioned further up the supply chain, businesses encounter policy changes much earlier than consumers, and make operational and financial decisions based on what they see.
Those decisions then trickle down to the consumer over time. While it may take months or even years for the market to settle into whatever its “new normal” will be, it’s wise for shippers to prepare to be agile as the new President’s economy begins to take shape.
Pay attention to consumer behavior, particularly the behaviors of your largest customers. Aim for a strategy that anticipates unfavorable changes to capacity and rates while maintaining operational flexibility. This will allow you to pivot when necessary and act proactively rather than reactively in the evolving market.
The overall trend of a new administration's economy will take time to reveal itself, but if you keep your finger on the pulse of buyer behavior and prepare for potential shifts, you’ll be better positioned for success — no matter who is in the White House come January.
Prepare Your Supply Chain for Market Changes
As the election season unfolds, shippers should expect a unique blend of factors to influence the market, some more predictable than others.
Pre-election uncertainty has traditionally slowed spending until a winner is decided. While this pause is still a safe bet, the 2024 election cycle might still yield some unexpected market behaviors.
Given the transportation industry’s ongoing challenges, the lingering effects of the pandemic, and the twists and turns of the campaign trail thus far, smart shippers will strive to expect the unexpected.
Stay vigilant, monitor buyer behavior, and be prepared to adjust your strategies as the new President’s policies start to manifest. As the election passes and a new administration takes office, remember that the initial economic impact may be more gradual than immediate.
By staying informed and flexible, you can navigate the complexities of this election cycle and position your operations for success, no matter the outcome in D.C.
Want to know more about the state of the U.S. economy and the freight market as Election Day approaches? Check out our 2024 Transportation Industry Mid-Year Market Update.
In it, our Chief Financial Officer talks through the factors that are currently influencing our market and how supply, demand, costs, and rates are expected to change between now and Q1 2025.
It’s a quick, plain-English primer that will give you the understanding you need to make informed decisions for your business moving forward.
