start of the year. “You want to know why freight is good right now? Look at that line,” he noted, referring to the graph on page 19. “Whereas services are going to take all the way until 2022 to recover.”

“When we go out and spend money on a service, sure there’s truck freight involved,” Costello continued, “but the services are a much less truck intensive industry as compared with goods. When we go out to buy a good, there’s a lot of truck movements associated with that even on an imported good. So that’s where we have benefited this time.”

With people doing more social distancing and spending less money on services this year, it has freed up money for goods. “As a personal example, we haven’t gone on vacation this year,” Costello said. “But we’ve done some things around the house. We bought things for around the house because we saved money not going on vacation. I think a lot of people are in that boat.”

But he cautioned not to expect this freight growth to continue at this rate. It likely won’t fall, Costello said, but it will flatten. “So it’s going to remain elevated — but not grow at the same rate. That means freight is still going to be good, but it’s not going to grow as much.”

Another reason goods consumption is expected to level off is that there is less money in the economy than a few months ago, Costello said. While unemployment numbers spiked beyond previous records set during the Great Depression and Great Recession, the government propped things up with stimulus checks and an extra $600 a week for the unemployed, which pumped $15 billion a week into the economy.

That federal assistance ended this summer as Congress and the White House still quibble over future COVID stimulus bills. “There’s less money in the economy today than there was a few months ago in terms of this extra money,” Costello noted. “That’s another reason why you saw the slope of that line sort of flattening out for goods.”

Unsurprisingly, a pandemic that has pushed Americans to stay home more and socially distance has accelerated the growth of e-commerce, which had already been growing faster than brick-and-mortar retail over the past few years. E-commerce growth, year-over-year, has outpaced other retail sales significantly since at least 2017. But 2020, Costello forecasts, will be the first year where non-online sales decrease year-over-year (he expects by almost 5%) while e-commerce is expected to jump by nearly 20% this year and grow even more in 2021.

Another point of retail interest is the resurgence of grocery stores. “Back in 2015, for the first time in our history, we saw that we were spending more at restaurants buying food and beverages than we were at grocery stores,” Costello said. “And that flipped during the pandemic.” Through August, restaurant sales are down 20.5% while grocery sales are up nearly 12% year-over- year, he notes.

These changes in consumer behaviors are creating opportunities, McLeod noted earlier in the week. “It is in times of disruptive events that the biggest opportunities appear,” he said. “I hope that you’ll take advantage of the opportunities and not see these events just as problems but as things you can take advantage of. The trend toward e-commerce has likely been accelerated in a way during this pandemic that it’s not going to be reversed.”



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