Hyderabad, Jan. 19, 2023 (GLOBE NEWSWIRE) -- The road freight transportation market in United States witnessed a CAGR (value) growth of around 4.03% during the review period (2016-2021), except for 2019. In 2019 a decrease in market value of 2.15% YoY, was observed due to the lengthy trade spat between the United States and China along with decline in manufacturing sector value of around 3% YoY. However, in 2020, as the US-China trade spat came to an end and despite the initial decline in value and volumes due to COVID-19 restrictions, overall the US road freight transport market witnessed an increase in value of around 4.58% YoY. Since then the market has witnessed an incremental increase in growth pattern. For instance, 3.22% YoY growth (value) in 2021 followed by 4.36% YoY growth (value) in 2022.
The country’s wholesale and retail trade sector has been a major contributor towards rising demand for road freight market. The sector has remained the top share holder for GDP contribution for 2021 with 12% share followed by manufacturing sector with 11.1% GDP contribution share. In terms of Cross-border trade amongst US-Canada and US-Mexico, road freight transport had the maximum share with total value of USD 81.9 billion as of September 2022. In US-Canada (both directions), the goods transported by trucks were worth around USD 35 billion with the top 3 commodities being Computers/parts (USD 5.6 billion), Vehicles/parts (USD 4.7 billion) and Electrical machinery (USD 2.4 billion) whereas in US-Mexico (both directions), the goods transported by trucks were worth around USD 47 billion with the top 3 commodities being Electrical machinery (USD 10.9 billion), Computers/parts (USD 10.8 billion) and Vehicles/parts (USD 6.4 billion).
The various other growth factors driving the market demand include rising development of road infrastructure with length of road reaching 67,38,591 Km in 2021. This is facilitating a smoother supply chain along with decrease in turn-around time of trucks leading to increased deliveries in same amount of time as 2020. Furthermore, government initiatives in the form of Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) under Biden-Harris Administration are boosting the market development. This deal will reauthorise (grant authority to new administration) surface transportation programs for five years (2021-2026) and is investing around USD 110 billion in additional funding to repair the country’s roads and bridges and support major, transformational projects. Therefore, Infrastructure development, adoption of new technologies such as dynamic routing software and electronic logging devices, along with U.S. Department of Transportation’s (USDOT’s) automated vehicles comprehensive plan are enhancing the transparency of the market, modernizing the regulatory environment, and overall making the US road freight transportation market the most preferable for all players in the value chain.
Following these advancements, the scope and opportunities in the market are abundant as the country is increasing focus on curbing driver shortages to cater to increasing demand for domestic and cross-border road freight services. The Bipartisan Infrastructure Law is laying down foundation for a next generation trucking workforce with accelerating the expansion of Registered Apprenticeship programs providing driver training and expedited commercial driver license (CDL) issuance rates. For instance, in 2021, on an average more than 50,000 CDLs and Learners Permits were issued per month. This is 20% higher than the 2019 monthly average and 72% higher than the 2020 monthly average. Furthermore, increased focus on environmental emission standards are leading to shift in operational awareness. To add, on March 28, 2022, US Environmental Protection Agency (EPA) published a proposed rule that would set new, more stringent greenhouse gas (GHG) standards to reduce pollution from heavy-duty vehicles and engines starting in model year 2027 as part of heavy-duty GHG Phase 2 program. As of 2021, a total of 607,600 light electric vehicles were sold in the US. Moreover, due to the various government initiatives the electric vehicle sales are expected to boom in future. Leading to growth of the market during the forecast period (2022-2027) at a CAGR of 3.89%.
