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For fleets, COVID-19 portends worse news in a freight market that already was slowing, executives said, as businesses urge their staff to work from home and consumers withdraw from daily activities.
Marquee gatherings for truckers, sporting events and theater attractions have been postponed while schools have resorted to remote learning in efforts to slow the rate of the coronavirus, now a pandemic.
“These things, combined with a freight market that was already stuck in a rut before the coronavirus hit, will delay its potential to rebound even longer,” said Riley Larson, general manager at JMS Transportation Inc., a dedicated contract, regional truckload and brokerage services company in Cedar Rapids, Iowa.
“If the coronavirus subsides within a couple months, it will likely take months after that before we start seeing growth again in the trucking industry as a whole,” Larson said.
Another fleet executive expects shippers and consignees to feel the impact first, given the number of their employees in a location.
“Drivers are not dealing with a big group of people like factories and warehouses do where 200 or 300 people are working. So we may see some issues about loads not being ready because they don’t have the people to load them onto the truck because their workforce is down if [COVID-19] becomes that local,” said Chase Adkins, corporate vice president at Sharp Transport Inc. in Ethridge, Tenn.
Truck drivers spend time listening to the radio and podcasts, he added. “They have fears just like everybody else does on how the coronavirus will affect us, affect the economy, their jobs.”
Another fleet executive underscored the urgent need to control the outbreak.
“The truth of the matter is, COVID-19 has people scared. If industry is stifled, transportation will follow. A resolution and solid treatment plan needs to be established soon for all the areas affected,” said Garrett Bowers, president of Bowers Trucking, a 40-year-old carrier based in Ponca City, Okla.
Industry is taking a blow from rising worries from disruption to supply chains. On March 12 the NCAA men’s and women’s basketball tournaments were canceled after every major American sports league from the NBA to MLB postponed its season. Trucks haul the commodities needed for these sports, even the iconic hardwood floor of the NCAA tournament.
Mid-America Trucking Show canceled its banner event for drivers, manufacturers and suppliers alike in Louisville, Ky., this month.
The stock market again suffered brutal losses too. The Dow Jones Industrial Average is now down more than 20%, officially entering what is known as a bear market for the first time in more than a decade.
Meanwhile, domestic port and rail volumes have just begun to reflect the drop in Chinese output, ACT Research reported.
One drayage executive said imports may be down but exports have gone up substantially.
“We’re hoping it continues until the impact of this quarantine and the Chinese New Year passes,” said Eddie Monroy, logistics manager at New World Drayage, based in Wilmington, Calif., near the ports of Los Angeles and Long Beach, the nation’s two largest.
Monroy said he has heard of dispatchers and drivers at other fleets covering the ports being laid off but New World Drayage has “thankfully” kept its business and customer base intact.
At the same time, independent engine maker Cummins Inc. reported it resumed operations in China last month with the exception of Hubei Province, including Wuhan where coronavirus started. It expects facilities there to resume operations this month, a spokesman said.
U.S. truck makers agree with the assessment of leading immunologist Anthony Fauci, who advises presidents on global health issues: “This is not business as usual.”
The OEMs’ immediate plans for dealing with the fast-spreading virus reflect the Centers for Disease Control’s advice, they said. Hand sanitizer is placed by high-touch areas and company advisories go out to employees.
None mentioned what plans they had in place if COVID-19 appeared on the production floor. Mack Trucks put it this way: “As to specific contingency plans for our manufacturing facilities, we prefer to not get into that level of detail.”
Everyone can help prevent the spread of #COVID19. Call your doctor if you develop symptoms, have been in close contact with a person known to have COVID-19, or have recently traveled from an area with widespread or ongoing community spread of COVID-19. https://t.co/ehL8kmRHaN. pic.twitter.com/KwrKO7VNub— CDC (@CDCgov) March 10, 2020
Navistar International Corp. has a third-party vendor thoroughly evaluating its supply base to determine the potential business impact.
“The minor issues seen to date have been mitigated through airfreight, substitutions of parts and monitoring of suppliers,” Navistar Chairman and CEO Troy Clarke said.
Other truck makers either declined or did not address contingency plans for production.
ACT Vice President Steve Tam said truck makers fall under the Worker Adjustment and Retraining Notification Act, or WARN. It is intended to protect workers, their families and communities by requiring employers with 100 or more employees to provide at least 60 calendar days’ advance written notice of a plant closing and mass layoff affecting 50 or more employees at a single site of employment.
“So nobody has made notice that they are are going to have layoffs that they haven’t already announced that were completely unrelated to the coronavirus, at this point,” Tam said March 12. “Now, that doesn’t mean they don’t have the flexibility to take additional down days or slow the line rates as they see fit.”
Staff Reporter Connor D. Wolf contributed to this story.
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