At the start of July, the United States-Mexico-Canada Agreement (USMCA) went into effect. While overtly, the agreement does not differ greatly from NAFTA which originated roughly a quarter of a century ago, The finer points could open up opportunities for the Unites States trucking industry and the economy as a whole.
The USMCA Benefits American Industries
Provisions in the USMCA favors trade in the United States. While the agreement will have very little impact on the trucking industry in the immediate future, the long-term plan will drive more business to carriers. The USMCA is designed to place the focus on domestic production, In hopes of attracting more manufacturers and factories to the United States. Additionally, there is a push for increased agricultural trade between the United States, Mexico, and Canada. The long term benefits could result in higher demand in the trucking industry to transport goods, and effectively allow carriers to hire more drivers over the upcoming years. The agreement is projected to increase our GDP by an additional $60 billion.
A Jumpstart for the Economy
Experts in the freight industry have noted that the USMCA could not have come a better time. While the economy has been relying on the trucking industry no more than every since the COVID-19 pandemic, that work has been to keep supply chains moving and to expedite medical equipment where it is needed most. The new agreement will help to spur on commerce and growth across a number of sectors, which will hopefully get the US out of its holding pattern and boost domestic revenue.
Building a Long-Term Strategy
Even though we are in the early stages of the USMCA, the trucking industry is already forming a long-term strategy in anticipations of economic growth. However, unlike the spending that was done at the end of 2018, carriers are preparing by building up capital reserves. To do this, trucking companies are using freight factoring to eliminate waiting periods on unpaid receivables. This gives carriers fast access to revenue so they can build up capital that they can use for equipment, hiring, and anything else they need once the economy hits its stride.
At Express Freight Finance, we provide comprehensive freight factoring solutions to the trucking industry. Contact our offices today to eliminate the lag in client and broker payments.