Menu Close
[email-subscribers-form id=2]

Calculate how much you can save using Matrack's fleet, asset and trailer tracking devices.

COVID-19 Disruption Continues to Affect Freight, Rates

The economies and nations are yet to recover from the sudden loss due to the global pandemic of Covid-19. And adding to the slow recovery phase, some countries have started their unlock strategy by which the companies witnessed an unusual demand for goods. The impact of Covid-19 on the freight industry is quite visible across the world, showing a downward trend. The Government announced the shutdown, and the trucking industry came to a near standstill except for essential goods’ transportation.

The logistics chains are going through unusual massive losses from the Covid-19 effect. The disruption is both from the demand and supply side—the industrial sector, which was already in a slow-growth pre-pandemic but has now seen a drastic downfall post-pandemic. The production and manufacturing activities are down by 8% from February and the shipment of durable goods by 6%. Since the Chinese economy is highly powered in the global economy, the epidemic has a broader impact on international supply chains.

The trucking industry has to face significant shipping constraints amidst the global pandemic as there has been a high demand for goods from high hotspot areas. Regarding crew and passenger health, difficulty with crew changes, or the staff refuses to go to an affected area. There have also been extended delays in subsequent ports, with cargoes being left unloaded or discharged. Adding to this, one of the most significant indicators of the disruption of Covid-19 in the supply chain industry is the inventory to sales ratio. Stocks relative to sales in retail showed the lowest figures in June by a long shot. The shutdown of factories and workforce scarcity to re-stuff cargo and drivers to operate trucks for cargo evacuation has derailed the trucking industry’s smooth trade functioning. The low inventory figures put pressure on the movement of daily goods like how to stuff into the retail arena and how to restock. The result is a cumulative loss of $9 trillion to the world’s global GDP, and the world trade has witnessed a decline of 32%. The ports have seen a fall in traffic with a delayed turnaround time of 12-14 days, previously just three days.

As estimated, the significant share of truck drivers has gone to their native places, and there’s a lot of restrictions on inter-state and Intra-state movement. This has also triggered a spike in freight rates.  Increased costs and panicked customers create a significant problem in the freight transportation and logistics market, says Susan Beardslee, Principal Analyst at ABI Research. Global air cargo volumes were down by 9% in the last month. New restrictions on passenger travel from Europe and the United States have further affected the air cargo capacity. All of this adds to the already current decreases due to the China- U.S tariff tensions.

Covid-19 disruption in shipping rates and operations

  • In 2020, the spot market has been on a wild ride – says Avery Vise, Vise President of Trucking. During the quarantine days of demand and panic buying, the groceries, toilet paper, and similar essential items were high for a brief period. Then things fell apart in April. Loads were down with rates going down nearly 25% in the April-mid.  One of the reasons why spot rates are currently high is that the capacity is now tight. The full sing operation of drivers hasn’t started yet. Other contributing factors include:
  • Freight carriers are slow to bring back their drivers because of uncertainty about whether the current surge in demand will continue or not.
  • With Federal assistance such as extra payments during unemployment, stimulus checks, PPP loans, some drivers feel less pressure to get back to work amidst this critical pandemic period.
  • The new drug and alcohol clearinghouse that has come into effect in January shows that about 29,000 drivers have been tested positive or refused to attend tests through July.
  • Considering the social distancing and COVID-19 safety measures, the Commercial Vehicle Training Alliance saw 40% fewer commercial driver’s licenses issued this year. This implies that there will be fewer drivers coming into the market this year.
  • Amidst the global Coronavirus pandemic, some temporary and permanent retirements as older drivers do not take up the risk to continue the job.
  • The existing drivers are calling out for double payment due to the risk involved.

Effect of COVID-19 disruptions on truck drivers

  • Commercial truck drivers are exempt from the non-essential business closures and were requested to stay-at-home implemented by most states.
  • Truck drivers have reported long wait times at pickup and delivery points due to shortage of on-site personnel ad busier receiving schedules.
  • Truck drivers are less willing to take loads to supply at hotspot areas causing spot market and hoc rates to climb.
  • Amenities like food, water and restroom are becoming a challenge for truck drivers, especially, when they are at interstate shipment.
  • There has been a massive volume drop in the lanes that have freight trailers.
  • Less Than Truckload (LTL) freight cannot be held in destination terminals due to limited space, resulting in extra fees. Hence many LTL carriers are returning freight less than one day after a load cannot be shipped to a closed facility.

What can transportation companies do to keep their goods moving to the market?

Accepting this new normal and working with the existing workforce using the following short-term action plans can help trucking companies control the situation:

  • Activate emergency plans – activate your emergency transportation and logistics response techniques. With disaster control towers and emergency response teams, you can handle the unforeseen emergencies like Covid-19 and its impact on the trucking business.
  • Communicate with carriers – talk with your transportation and logistics providers to analyse their situations and understand the potential impacts of your supply chain, if any. Maintaining a daily or weekly communication with the carriers ensures an updated status of the changing circumstances.
  • Stay informed on Federal and State regulations – during these uneven crises, the Federal and State develop laws that impact the trucking industry. These include travel restrictions and national emergency declarations.
  • Consider fleet strategies – assess alternative fleet strategies to cope with the driver and truck shortage. You can select alternative fleet strategies that provide additional capacity to your truck fleet.
  • Embrace new technologies that drive automation – due to changing needs, the urge to have an automated system can simplify the tasks more cost-efficiently. Transportation plays a vital role in customer service. There’s a series of processes that embrace new logistics technologies that include the right place, right time delivery, and non-defective product delivery. This will enable customer-centric requirements of anywhere reporting at anytime reporting. Thanks to Matrack GPS tracking devices, the freight manager knows whether the driver and assets are safe.
  • Enhance distribution capabilities – avoid complicated distribution channels and establish quick alternative fulfilment models. This includes investment in real-time GPS tracking solutions and electronic logging devices that save hours of IFTA tax filing time.

That being said, shippers need to evaluate options and model changes across various transportation modes to avoid delays, interruptions, and significant price hike. Both retailers and manufacturers need to develop prioritization plans for customers that meet with the set limits. Systems integration in line with the advanced tracking systems should be implemented wherever possible. This includes ERP, TMS (Transportation Management System), WMS (Warehouse Management System), and predictive analytics and scenario modelling.

Why choose Matrack for your changing logistics needs?

With the cutting-edge technology providing customer satisfaction, Matrack has been the leading provider of GPS fleet and asset tracking solutions for the past 12 years. Serving the industry by providing advanced tracking solutions for both individuals and businesses, Matrack holds a reputed brand in the fleet tracking industry. Whether your fleet size is small or big, the Matrack trailer tracking devices help assess where your vehicle is and when they require maintenance. When your fleet and driver are beyond your ability to see, the Matrack real-time monitoring devices let you know what is happening. You can also be assured of your driver’s and cargo safety. Thanks to the Matrack dispatch solution that provides real-time visibility into mobile applications, the fleet manager can guarantee that everything is fine and functioning properly.

Benefits of buying Matrack trackers for your fleet

  • All Matrack devices are waterproof and weatherproof
  • Tamper-resistant
  • 1-year warranty
  • email and SMS alerts
  • Speedy asset recovery in case of theft or vehicle breakdown
  • Aggressive tracking mode to find the lost cargo in case of any emergency
  • Dedicated 24/7 technical support in the back-end process
  • Roadside assistance provides the shortest and traffic-less route.

The Matrack ELD is another technologically advanced system solution for trucking companies to facilitate accurate reporting and efficient streamlining of business reports. The Matrack ELD is an electronic logging device that is easy to install and use by the driver. This FMCSA approved DOT compliant electronic logging device is Bluetooth compatible and features voice-recognition for making status changes. The loading and unloading procedures from start to end, the fleet companies can keep track of their freight operations, thereby strategizing alternate plans for unforeseen continencies.

Please don't forget to share


How to lower fuel costs by as much as 10%

Cinque Terre

Download the Best Practices Guide:
How to reduce your fuel cost by 10%?

We are commited to your privacy. Matrack uses the information
you provide to us to contact you about our relevant content, products, and services.
For more information, check out our Privacy Policy
You may unsubscribe from these communications at any time.