When it comes to elections, there's no shortage of uncertainty. During big election years, people tend to hold off on making big decisions, whether it's buying a new car or investing in a home renovation. But here's the thing: I just put a deck on my house. I didn’t want the election year uncertainty to sway me on what I should or shouldn’t do. That’s the funny thing about consumer behavior during election years — it’s driven more by fear of the unknown than by actual changes in policy.
In the freight market, these decisions carry weight. Political uncertainty doesn’t just affect the average consumer; it sends ripples through the entire supply chain.
Businesses react to consumer hesitation, and the effects can be seen in the freight market long before the election results are tallied. But how exactly does this play out? Let’s break it down.
This article isn’t about red or blue — Democrat, Republican, or Independent. I’m simply here to help you understand what happens during an election year and the weeks and months following the results and inauguration day.
I’ve spent decades in the trucking industry, so I’ve seen how election years have impacted how freight moves and how truckers need to make adjustments to work through it.
- The effect on consumer behavior
- The effect on business behavior
- The aftermath of an election
- Stock market changes
- Driver tips
The Impact of an Election Year: On Consumers
Election years bring a unique kind of hesitation among consumers — and we’re not talking about confusion about who to vote for. Consumers, unsure of what the future holds, tend to delay large, costly purchases until the election is over. Whether it's a new car, a home renovation, or even a fun purchase like a boat, people want to know which way the wind is blowing before handing over their wallets.
It’s important to consider that what counts as a "big purchase" can vary dramatically depending on who you ask. For some, it might be a $500 investment in a new appliance, while for others, it’s a $10,000 home upgrade.
Consumers' behavior during an election year is considered silly by some; the new administration’s policies typically won’t trickle down and affect consumers for quite a while.
The key point is that during election cycles, consumers often hit the pause button, leading to a temporary dip in spending. This consumer hesitation creates a ripple effect that flows directly to the businesses that serve them.
Everything a shipper does is in reaction to buyer behavior. If people aren’t buying, then businesses aren’t restocking supplies, and shippers aren’t moving products. This results in truck drivers having fewer loads to haul.
It’s a chain reaction driven by uncertainty at the top.
The Impact of an Election On Businesses
The election usually has a much bigger impact on businesses, with the potential for dramatic price swings high — especially after the votes are tallied and the stock market responds. So it makes sense that companies wait to make big moves until after the election is over.
Businesses will typically wait to finalize budgets and infrastructure plans until they know who will be taking office next.
In the freight industry, this means that drivers will face some uncertainty. As consumers and businesses wait to see how things shake out, we see fewer items moving on trucks — whether it’s household goods or building materials.
The Immediate Aftermath of an Election
Once Election Day has come and gone, the country collectively exhales…
…well, maybe not. There are usually quite a few people who are pretty upset about the outcome.
However, the outcome of the election does at the very least bring a sense of certainty — whether it's welcomed or not — and that certainty allows both consumers and businesses to start making decisions again.
Following the election, businesses tend to react more quickly to political changes than individual consumers. This is because policies that directly impact their operations, such as tax regulations or environmental policies, can be enacted swiftly by a new administration.
There are certain policies a new president will try to move through immediately. The policies they do this with tend to be the primary platform they campaigned on.
For instance, in years past, politicians have promised tax cuts and pushed policies through quickly. As a result, businesses that had been holding off on major purchases suddenly found themselves with a sweet deal on the table, leading to a surge in spending on infrastructure and equipment. Waiting to make their decisions until after the election paid off.
This quick reaction can lead to immediate changes in the freight market, as shippers begin to move goods in response to new business investments.
The Importance of Monitoring the Stock Market
The immediate aftermath of an election can be telling. If the market believes the newly elected president will support business-friendly policies, there’s often an uptick in economic activity. For example, following the 2020 election, the stock market gained 7 percent within a week, signaling confidence in the economic future under the new administration.
In the lead-up, however, the stock market was jittery, reflecting the uncertainty surrounding the outcome. The more divisive the election, the greater the uncertainty, and the more likely the market is to fluctuate. But once the uncertainty is resolved, the market tends to stabilize, and businesses, including those in the freight industry, can start planning for the future.
So, if you want to gauge how the economy will react to an election, keep an eye on the stock market. The market’s performance in the days and weeks following an election can provide a clear indicator of economic confidence.
These market swings aren’t just numbers on a screen—they’re indicators of how the economy, including the freight market, will move in the coming months.
Drivers and the Freight Market: What to Expect
So, what does all of this mean for you, the driver?
In short: expect uncertainty.
The freight market is already sluggish and the added layer of election-year uncertainty is likely to add to it. Freight rates may not swing wildly, but the overall demand could soften further as both consumers and businesses wait to see how the election shakes out.
For drivers, the advice is much the same: Continue planning your loads carefully and stay informed about market trends. The election will bring uncertainty, but that doesn’t mean you can’t continue to find success by sticking to proven strategies.
Consider adjusting your approach to stay competitive during these unpredictable times.
Navigate Political Uncertainty with Ease
Political uncertainty is an inevitable part of election years, but it doesn’t have to spell disaster for the freight market. By understanding how these dynamics play out — from consumer hesitation to business reactions and stock market fluctuations — you can better prepare for the challenges ahead.
While it’s easy to get caught up in the headlines, the key to navigating these uncertain times is to stay informed and adaptable. The best approach is to keep moving forward, no matter what the election results may bring.
For a comprehensive look into what influences the economy — and therefore the freight market — check out this mid-year market update from Anderson Trucking Service’s chief financial officer.
You can also download this freight calendar, which will help you decide which days to haul freight to earn the most money.
