Logistics

The American people have done their part in helping recognize the importance of truckers and their impact on everyone’s quality of life during the coronavirus pandemic. The White House wasted no time making sure that truckers across the country could work the flexible hours required to keep Americans stocked with essential supplies like groceries, fuel, and medical equipment. That was only the beginning of the story, however. While truck drivers have been responsible for critical supplies reaching their required destinations, they’re only one part of a very big puzzle that’s responsible for keeping thousands of Americans safe during the pandemic.

There have been dozens of quick adaptations that have saved American lives, like Ford taking the steps to produce respirators for COVID patients, Lamborghini shifting to start producing personal protective equipment, or 3M’s efforts that have resulted in almost double the output of infection-preventing N95 masks. Here’s how transportation and supply chain operations have shifted their focus to continue helping America.

Increased Demand for PPE

A major aspect of the trucking and freight industry is the production and maintenance of vehicles. Ever since the outbreak, new sales have generally been at a standstill, with so many people uncertain about their own financial futures. This means that global demand for things like axles and driveshafts aren’t particularly high, which prompted one manufacturer— Dana Inc., to pivot their resources to support something more immediately necessary: protective face shields for medical professionals.

Many medical professionals around the world have reported having to use and re-use personal protective equipment that was only designed for single use, creating a huge uptick in demand for products like N95 face masks, which are known to effectively block common germs from entering through the respiratory system. Plastic face shields, which look a lot like frontal visors, are a good stand-in when N95’s can’t be located, and At Dana Inc.’s Maumee, Ohio Advanced Manufacturing Center, they’ve dedicated 10 of their 3-D printers to make parts for face shields while also doing the work to source the other components needed to complete the face shields. The truck manufacturer has been managing to put out around 500 of these masks per week in Maumee, donating them to hospitals in need.

Automotive Companies Joined the Shift

Similar operations have been moving ahead full-steam for popular automakers like Ford and GM, with Ford reporting it shipped over 1 million masks to medical professionals and first responders at the end of April. General Motors have pooled together more than 30 of its engineers, designers, buyers and manufacturing team members to help with product development of the face shields, which includes sourcing materials and equipment, and planning the production process. They expect their plant in Michigan to produce 50,000 masks per day, once the program is fully online.

“The first people we called were those who work with fabric vehicle components,” said Karsten Garbe, GM plant director, Global Pre-Production Operations. “In a few days, the company’s seat belt and interior trim experts became experts in manufacturing face masks.”

Other Challenges Facing the Industry

While the supply of PPE remains critical, it doesn’t do much if the supplies don’t reach high-infection areas in time. Whenever 3M doubles their output of masks, that means that someone’s got to find twice as many trucks to get those masks to the front lines where they can help people. That’s posed some serious hurdles for freight companies. Global Logistics have shifted altogether, as consumers all around the world have started buying different products through different vendors, causing widespread disruption to what we would call the standard supply chain in America. This has challenged logistics companies in a serious way, and has put pressure on freight companies to find personnel capable of adapting to changing circumstances rapidly— a survey conducted across 235 companies found that 79% of the respondents worry about recruiting people able to handle the increasing pace of change within the industry. Further, 37% of respondents mentioned lack of leadership as the biggest hurdle to succeeding in a post-COVID world.

Supply Chain Operations Keep Moving Forward

It’s taken a lot of work to keep supply chains strong enough to get products like N95 masks and face shields to hospitals far, far away from manufacturing plants in places like Michigan and Ohio. When the pandemic first spread to America, UPS’s healthcare division found itself in a unique position to provide support for initiatives that were critical in reducing the virus’ spread. In partnership with the Federal Emergency Management Agency and President Trump’s coronavirus task force, they became one of the key transporters of vital sanitation equipment and kits used to test the virus. The public and private sector have taken huge steps together in creating new logistics tools that help keep truckers on the road as well.

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The coronavirus pandemic has already had large, quantifiable impacts on the American economy and transportation industry. Sales of personal automobiles dipped strongly in April and have been slowly bouncing back through May.  Heavy-duty truck manufacturing has been on the decline as well. To state the obvious, few people are flying, and there’s still a significantly reduced number who are now renting cars or commuting to work. This has significantly changed cash flow in America. Here’s our take on how the economy is functioning currently, and how we expect things to change in the near future.

Expect to See More Trucks and Vans on the Road

Gas and oil are at a historic low, which makes it more likely that we’ll see a shift in which vehicles yield the best ROI for different industries. With cost of operation becoming less of a factor, it will likely become more feasible for companies large and small to rely on conventional gas vehicles, rather than saddling the cost of new hybrid technologies. The possibility of increased infrastructure spending in America could also mean more trucks and vans on the road to build that infrastructure.

There May be Fewer Vehicle Manufacturers

According to an article by trucks.com, there’s already been existing pressure for the auto and truck manufacturing industry to downsize. Mergers like the one between Fiat Chrysler and Peugeot, and the possible merger between Nissan and Renault could result in less total manufacturers left independent, and less true competition as a result.

The article speculates that a combination of the current economic shock with general changes to consumer behavior and government policies could further encourage consolidation between manufacturers.

Class 8 Sales Might Continue to Dip

April’s Class 8 sales in 2020 were half of what they were last year, but that was at a time when uncertainty was particularly high in America as to what the impact of the pandemic would be on the economy, and many American buyers and business owners were unsure of when they’d see financial support from the government and how much that would be. ACT Research has long forecasted tough times ahead for class 8 sales however, and this will have a strong impact on dealerships. As we’re currently expecting a prolonged period of lower truck sales, it’s expected that some smaller dealerships will lack the capital to adapt their model quickly enough to remain possible.

Logistics Fleets Will Be Everywhere

For almost two months now, much of America has been depending on online retailers to meet their needs, rather than their brick-and-mortar counterparts that haven’t been allowed to operate. Digital logistics operations and e-commerce giants such as Amazon and Instacart have had waves of traffic driven in their direction, and this massive shift that could potentially stick to some degree, creating a need for even more local and last-mile transport providers.

New Programs for New Cars?

In 2006, the cash for clunkers program was hugely successful in keeping the transportation industry healthy in the midst of a general recession. Many are calling for a similar program to be launched in 2020, and some analysts are expecting governments and manufacturers to follow through with something similar.

If such a program were instated, the program could encourage auto plant growth, offer safer and more efficient vehicles to the lower end of the income scale, and take plenty of the country’s worst polluters off the road.

Supply Chains Will Work Differently

Already we’ve seen a huge shift in how global supply chains function in relation to the American people, before COVID-19 was even a factor. The trade war with China has been stop and go for years now,  and recently there’s been rhetoric from the White House indicating that Chinese-American trade might continue to dwindle. This affects the traffic coming in and out of major American port cities and cargo hubs. To make a long story short, there’s going to be more or less work depending on which state you’re based in as a trucker, depending on how things settle.

What All This Means for Trucking

Trucking has continued to be supported by the Federal Government since the beginning of the COVID-19 outbreak. There has already been news of large companies like Walmart hiring truckers at phenomenal rates. Insofar as most freight companies have seen a maintenance in demand for their services, or even an increase in some areas, it’s expected that the price per mile for truckers will remain high, even after the pandemic ends and businesses reopen. The Wall Street Journal reports that PPM for hiring a big rig is up 12% since March 1st, meaning that you won’t have to change jobs to make a little more money in trucking.

In general, these shifts indicate a change in how and where truckers will make a profit, not that profit is set to decrease for truckers on the whole. While there may be rough times for dealerships ahead, there isn’t necessarily much indication that they’ll do much better or worse than other industries will. 

The trucking industry has been doing well in the short term, despite some challenges. Support from the federal government has kept land freight stable, and truckers logging hours. Now is a great time to enter the trucking industry, so make sure you get help from a financial lender to get started.

What Truck Drivers Should Expect This Spring As the Coronavirus Spreads 

The infection rate of Coronavirus, also known as COVID-19, is continuing to increase in countries around the world. Some experts claim that America’s trajectory of infection is in-line with Italy’s, which indicates that the overall number of infections will continue to increase into the coming months. Currently, there’s a high level of general alarm for members of the service and restaurant industry, as the White House has delivered specific instruction to the American people to work from home whenever possible, avoid social gatherings, and avoid going outside. The U.S. treasury is considering sending every adult American a check in the mail to help tide them over during these difficult times – and the trucking and freight industry have also seen some recent government intervention.

Government Declares Truckers are Essential to the Economy

There’s been concern for the trucking industry specifically, and a level of attention that generally bodes well for freight companies and owner/operators. The U.S. government has recognized that now more than ever, it is absolutely crucial for semi-truck drivers to be able to stay on-the-job during the outbreak of COVID-19, so that food, medical supplies and equipment, and other necessities can be readily replenished in areas across the country.

President Trump has relaxed trucking regulations in response to this need, rolling back a law that’s been in place since 1938, which disallows truck drivers from working more than 11 hours per any 14 hour work period. After that period, truckers are required by law to take a break for at least 10 hours. This keeps the total number of hours a trucker is allowed to be on the road at 11 hours per day maximum. With this law no longer being in effect, truck drivers are able to manage their own schedules more freely should their carrier companies oblige them, of course. If you’re an independent owner-operator, this puts a lot more of the safety precautions associated with truck driving on your own personal judgement, which makes it vital to operate responsibly during this time.

Truck Drivers and the Risk of Infection

According to an article by Business Insider, truck drivers are in a unique position as to how they should follow the White House guidelines for work moving forward. Truck drivers are not in a position to work from home and are often forced to come into contact with other individuals when they purchase food or enter a rest stop. Truck drivers rely on foodservice employees and custodians around the country to ensure that the services they require to move products across the country are infection-free.

Truck drivers are at increased risk compared to the average American according to a 2014 study that claims up to 38% of truck drivers do not have health insurance. The article also cited studies that found long-haul truckers to smoke cigarettes at a higher rate than most Americans, which has the potential to exacerbate coronavirus symptoms according to Epidemiologist Saskia Popescu, who practices at the Honor Health medical group in Arizona. The FMCSA has estimated that the government’s decision to relax trucking regulations will result in $274 million in savings for the U.S. economy, but it’s difficult to say whether those savings may be offset by semi-truck operators contracting COVID-19 at an increased or decreased rate than the general population.

Businesses are Working to Keep Truckers Safe

Freight companies and companies that manage rest stops have been outspoken in their role of reducing infection. Walmart has been circulating information to their drivers, urging them to take proper steps to keep their hands and cabs clean of infection. Pilot offered in a statement to Overdrive, that they are reinforcing proper cleaning procedures and sanitation methods, saying “Additionally, we have hand sanitizer dispensers for public use near the restrooms at our locations and working closely with our suppliers on inventory contingency plans. We will continue to follow the advice of global and local health authorities as the situation evolves and take preventative measures as necessary.”

If you’re an owner operator running familiar routes, it may be worth investigating whether your favorite dining establishment or rest stop has issued a statement for how they’re planning to adapt to the coronavirus update. Many businesses are moving their business models towards transactions that don’t involve human contact, and those services can be helpful for reducing your own risk of infection when you’re on the road.

What Will Trucking Look Like through the Spring?

There have already been strong movements to keep the trucking industry virile during this time of change in America. It’s vital for freight companies to maintain operation in some degree, so that food service providers, manufacturers, and hospitals can continue to operate at an appropriate efficiency level. One of trucking’s most powerful lobbying groups, the ATA, has recently requested provisions for the industry, and it’s likely that the executive branch will continue to adjust trucking regulations in the short term to keep the industry healthy. There’s currently a national driver shortage in America, which means that truck drivers are one of the few labor areas that could see increased demand during the outbreak

How to Maintain Healthy Driving Practices

Some news outlets have offered advice on how to stay safe during the outbreak, which can be useful resources, but it’s always best to refer directly to the CDC, World Health Organization or your Government’s official correspondence about the Coronavirus when making changes that affect your lifestyle. If you’re lucky enough to be driving an EV vehicle, there’s a good chance you’ll cut down your risk of exposure. Being extra cautious during fuel up times, or finding ways to decrease fuel consumption can be a great way to reduce stress and keep yourself healthy as well. Contact us with any questions you might have regarding how to be successful as an owner-operator, and make sure to browse our news section for the outlook of long-haul trucking in 2020. Thank you to all of you brave, hardworking truckers out on the road!