Heartland Express CEO shares trucking industry insight in wake of COVID-19 pandemic

During the COVID-19 pandemic, every industry experienced the impact of a suddenly fluctuating economy. For some, the lockdown plunged businesses into jeopardy. For others, factors like the rise of online shopping led to immense growth, but also immense changes. Mike Gerdin, CEO of Heartland Express, a leading national cargo hauler based in North Liberty, has noted how the trucking industry remains a key barometer for economic health even five years after the start of the COVID-19 pandemic. As he stated during a panel at the Corridor Business Journal’s Economic Forecast Luncheon on Jan. 15, “It’s been a rough slog for anybody in trucking or any type of transportation for the last two years, but we’ve hit the bottom. We’re going to come back up.” From 2020 to 2022, the industry experienced an extreme surge in demand, which led to an incredible financial boom for trucking. This unprecedented increase began when Americans, confined to their homes, turned to online shopping and home improvement projects to keep themselves occupied. “And it was order panic by everyone — businesses, big corporations, people staying at home, and online ordering stuff on Amazon and redoing their kitchen or putting on a deck and redoing landscaping,” Mr. Gerdin said. “It was all we could haul all day, every day, for two years.” The surge in demand was followed by a sharp decline. Rising interest rates, inflation, and the end of government stimulus programs in 2023 and 2024 slowed consumer spending. Mr. Gerdin speculates that many people had already purchased big-ticket items during the pandemic, which meant fewer purchases and less demand for trucking services in the years that followed. As the backlog of orders from 2021 and 2022 caught up, the need for trucking decreased, leaving the industry grappling with overcapacity and fewer loads to transport. “So the buying stopped, plus everything caught up when they were ordering all that stuff,” Mr. Gerdin said. “If you remember, in 2021 and 2022 you couldn't get it, right? Even though you had ordered, it might be two months or six months before you got what you ordered. Then in 2023 and 2024, all that stuff caught up, and the demand for trucking hasn't been as much.” Heartland Express, along with its subsidiaries – Smith Transport, Millis Transfer, and CFI – felt the impact. Mr. Gerdin described 2024 as "the worst year ever," not only for his company but for the entire trucking industry. In keeping with this cyclical nature, Mr. Gerdin said he sees a light at the end of the tunnel. Because 2024 was so difficult, he believes 2025 will see at least some improvement. He noted that while the industry isn’t thriving yet, there is a sense of cautious optimism. “If you look at the other major carriers that are out there, no one had a good year. No one had even close to a good year. Many, many carriers operated unprofitably for the whole year,” Mr. Gerdin said of 2024. “2025 is looking better, but it still won't be a great year. It'll be OK.” He expects the industry to experience steady, moderate growth rather than the wild swings seen in recent years. When asked if he anticipated a return to the peaks of 2020 and 2021, Mr. Gerdin gave a firm “no.” "Unless we have some type of pandemic that does what it did and shuts down basically the world, it’s not ever going to be like that again," he said.

Impacts and changes

One immediate effect of such an up-and-down few years had to do with the number of trucks on the road, Mr. Gerdin said. During the pandemic shipping frenzy, every available truck was utilized.

“Because there was so much freight, and the need was so bad to get stuff to people, every used truck was on the market. It would be like all of the cars leaving all of the dealerships and getting onto the road,” Mr. Gerdin said. “They're all on the road. They're all hauling as much as they can, and then it stops, so that's the big change in our industry.” Companies like Heartland Express that purchased trucks to meet demand are now faced with an overabundance of trucks and trailers across their fleets. Economic indicators that Mr. Gerdin closely watches include the prices of used trucks and trailers, which reflect market demand for freight services. "During COVID, I could have sold the whole fleet in about four phone calls. Now, I can't sell anything because there’s not enough freight,” Mr. Gerdin said. “Now, some of these trucks have come off the road. People have started to start buying things. People have gone back to work, and now I believe we're coming out of it again, but it's a cyclical industry that we live in here.” The COVID-era boom also affected hiring. Mr. Gerdin noted that the driver shortage during the pandemic has since eased. A 2021 report released by the American Trucking Associations (ATA) estimated that the industry was short 80,000 drivers — a record high that contributed to the supply chain issues that year, in combination with increased demand. Now, with fewer loads to move, fewer drivers are needed overall. However, those drivers are now more readily available, often seeking better opportunities as companies become more selective in their hiring. “We're being very picky on which drivers that we bring in right now, we want the cream of the crop,” Mr. Gerdin said. “We want the best drivers that we couldn’t get our hands on back during COVID when you were looking for anybody that had a CDL [Commercial Driver’s License], that could drive a truck. But now, we're looking for guys that maybe have 10, 15, 20 years of experience, really good drivers. Those are the ones we want.” The pandemic also brought long-lasting changes to industry practices. Before COVID-19, drivers were often expected to assist with loading and unloading freight. According to Mr. Gerdin, the pandemic forced companies to limit driver interaction at facilities, which unexpectedly benefited drivers by keeping them off loading docks. "Before the pandemic, our drivers had to get out of the truck, go inspect the load, maybe unload some of it," he said. "Because of COVID, now they don’t want drivers anywhere near their buildings. That was a positive for our drivers." Looking ahead, there has already been a nationwide disruption in many industries regarding President Donald Trump’s plan to impose 25% tariffs on imports from Canada and Mexico. The ATA released a statement on March 4 detailing the concerns about tariffs for the industry, particularly for truckers and companies that transport cargo across country borders. However, Mr. Gerdin said the unknowns are too numerous to make any concrete predictions for trucking. “There's going to be a lot of changes, which we've seen already. Whether the tariffs stick or how long they're effective, I don't think anybody really knows. I don't think Trump knows,” Mr. Gerdin said. “I'm not going to spend half my day trying to figure out how it's going to affect us, because it may not affect anything for sure, right? So, too early to tell on that one.” Reflecting on lessons learned from the COVID era, Mr. Gerdin emphasized the need for adaptability. He noted the absence of a clear playbook during the pandemic, which forced companies like Heartland Express to develop their own strategies to navigate an unprecedented crisis. “There was nothing you could look at to figure out what to do,” Mr. Gerdin said. “And so you had to write your own playbook, and figure out how to manage through it.” Regardless of the economy, Mr. Gerdin said Heartland Express plans to stick to its core business model. “It's going to be consistently better in the next five years for us. So, we’ll keep doing what we do every day — that's pick it up, and deliver freight on time, and do it safely,” Mr. Gerdin said. “[We’ll] deliver the best we can for our customers, that doesn't change. It's just the environment that we're in that changes.” This is one in a series of stories documenting the impacts of the COVID-19 pandemic on the Corridor, five years after the first case was reported in Iowa.