It’s safe to say the world is reeling from COVID-19 and its aftereffects. Even medical experts aren’t yet sure how we will operate on a day-to-day basis once the pandemic ends. So, what do we know about the impact on trucking logistics, and what their new normal will be? The answer, in short, is that the situation is still unfolding, but that there are indicators as to what logistical changes have been made, and are still to come.
Business as Usual, to a Degree
To a large extent, freight transportation has resumed. Even before lockdown conditions began to ease, these services were deemed essential so they were still running. The Global Commercial Transportation Recovery Dashboard, established to monitor how the industry bounced back, has noted that at least 90% of normal freighting – in some cases as much as 100% – was maintained in the United States during the course of the pandemic.
Overall, regular freighted trucking volumes are similar to what they were before COVID-19 struck, but their specific details are not. Essentially, non freight transportation is much slower and the supply and demand situations are very different to before the outbreak. Considering the nature of the crisis and control measures, this is understandable.
People were not only told to avoid buying non essentials; the delivery of these items was severely restricted too. Demand also decreased in several areas while increasing in others, which disrupted supply chains considerably. For instance, toilet tissue delivered to restaurants and hotels sat unused, and these large orders were not renewed. At the same time, home consumption increased as a lot of people panic bought. The demand and distribution patterns changed drastically, almost overnight.
Toilet tissue sat unwrapped in commercial establishments, while retail stores’ shelves were empty. Hurried rerouting of vehicles to deliver different orders has also led to entire crops of produce rotting in fields or storage facilities as they wait for collection. Equipment has gone unused, and revenue has been slashed.
Reduced profits and overall economic depression have caused producers and manufacturers to close up shop, which perpetuates the cycle and impacts trucking logistics even more. Delays at border crossings, loading dock hold-ups and slowed down operations also complicated deliveries.
Rethinking for Resiliency
With so much disruption in supply, demand, and delivery, the most viable course of action is to rethink logistics for resiliency – which is what most businesses, planners, and schedulers have tried to do. In many cases, suppliers that are closer are being chosen over those who are further away – even if their products are more expensive, they’re easier to get onto the shelves so they result in more sales. Trucking schedules could change considerably, with drivers making a lot of short trips as opposed to the fewer (but longer) cross country hauls that they’re accustomed to.
Where they can afford to, several businesses have also elected to build up buffer inventories. Retailers don’t want to run out of the all-important toilet tissue, after all. This can also mean a change in the way planners have to schedule delivery times and volumes. In some cases, companies have even been able to collect produce, tissue, and other items from locations where they weren’t being used, and transport them to places where they could be utilized.
Where rethinking for resilience has been possible, it has proven relatively successful. Since the short- and long-term financial health of both suppliers and wholesalers, retailers or other consumers remains an unknown entity, logistics firms who are able to think quickly and adjust agilely have been the ones who stayed afloat. Redistributing unused goods, as mentioned above, is just one example of this.
Transport companies could also pivot and start completing more last-mile drop-offs as online shopping and deliveries become the default way people make their purchases. Another possible option is to refurbish vehicles so that they can transport items that are in greater supply, such as masks, gloves, medicines, and other PPE and healthcare items.
Financial issues also need to be considered; smaller companies may have no choice to become incorporated into their larger rivals, and any rerouting or truck refurbishing is likely to be very costly. Changes in fuel prices meanwhile, will have their own impact. Pricing structures could require adjustment, along with how much a firm can or is willing to pay their employees.
While a lot of existing drivers are leaving the sector, many new ones are entering the market. It’s predicted there may be a surge in driving opportunities as the pandemic wanes due to an increased demand for goods as the economy rallies. This will eventually balance out, but it needs to be considered when forecasting for the remainder of the year and beyond.
Companies are finding themselves in a situation where they need to consider every aspect of their operations – where they can deliver to, which suppliers are still in business, costs to change their trucking facilities and the level of job market saturation for drivers – before making any logistical decisions.
The “Next Normal”
The reality is that we don’t know when the coronavirus will pass, and what the world’s economy and infrastructure will look like when it does. Logistics firms, as much as anyone else, are trying to forecast what could happen and act accordingly. What we do know is that trucking transportation is more important now than it has ever been – it’s the most viable way to move freight (and nonfreight) loads across small distances, which is what the crisis demands.
Deliveries via trucks are essential and will continue to be so once the dust from the COVID-19 pandemic has settled at last. The industry’s ability to adapt and change has always helped it to survive in the past, and experts say this will be the case now. There will be a new normal, or as some insiders are calling it a “next normal”.
The question that no one really knows the answer to yet is what exactly that will look like for trucking logistics in the United States of America and around the rest of the world. What firms are trying to do now is stay alert and agile so that they can plan routes and deliveries and direct their resources as effectively as possible.