A closer look at how the trucking industry is adapting to the coronavirus pandemic
Truckers have always been essential workers, but the public is starting to appreciate their key contribution to society.
The coronavirus crisis triggered an unprecedented government response and turned the whole supply chain upside down. The shut-down of non-essential services in the hope of containing the virus shuttered up to 80% of businesses. Yet the truckers keep on rolling, as they’re still needed to deliver materials to factories and essential goods to stores.
They’re also learning to adapt to this new reality and are already working on how to deal with the world post-COVID-19. Let’s take a closer look at how the trucking industry is adapting to the coronavirus pandemic.
A Spike in Spot Rates
While much of the economy is at a standstill, we can’t say the same about the trucking industry. Products and supplies need to be picked up and delivered to their destination, while they’re being consumed at a much higher rate than before.
On top of that, people are consuming groceries at the same rate while stocking up is straining the supply chain. This led the spot rates to jump 6% year over year. The spot rates for drivers went up in 63 of the 100 highest volume truck routes.
Temporary Changes in Driving Rules
The Trump administration ordered the Department of Transportation to lift restrictions that were preventing drivers from getting from point A to point B as quickly as possible, though rules related to safety remain in effect. One rule change involved the hours of service regulation. These rules said drivers couldn’t work more than 14 hours a day, and only 11 of those hours could be spent driving.
However, while the ELD trucking mandate has been relaxed for certain crucial sectors, it hasn’t been suspended completely. This means drivers must still log their driving and rest periods and abide by all the rules laid down in the mandate.
The Shutdown’s Effect on Drivers
Many establishments that are not considered essentials were shut down. But these services were in many ways very essential to truckers. As a matter of fact, two national transportation industry lobbying groups revolted when turnpike and public interstate truck stops were closed. States like Pennsylvania, however, relented and agreed to reopen parking lots and bathrooms in some of the state-operated stops.
The Broader Impact on the Transportation Industry
While spot rates have spiked, truckload volumes are projected to fall about twenty percent year over year, and this will hurt the industry in the near-term. Yet it may help make up for the long-term driver shortage.
Still, the industry could suffer a shortage of equipment over the long-term since three out of four major Class 8 original equipment manufacturers have reduced or entirely stopped production of trucks. If we see an economic rebound once the government restrictions are lifted, this could cause truckload spot rates to rise by 30 to 40 percent.
Truckers have always been essential workers, but the public is starting to appreciate their key contribution to society. They’re also on the front lines of the coronavirus crisis, witnessing the changing landscape first-hand.
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