Coronavirus. How is it affecting the industry, and what can we do about it?
Before we get into potential solutions and considerations, let’s get the lowdown on what this whole damn thing means for the industry at large. I’ve scoured the web and found the various ways that recent events have affected the industry, so you don’t have to.
What’s changed because of the virus?
Even though truck drivers don’t have the luxury of working from home, the social distancing and self-isolation policies are still weighing heavy on the industry and creating a lot of unnecessary inefficiency and hardship. Here’s what’s happening:
- Companies are cutting down on non-essential personnel
Trucking companies are severely reducing the amount of people operating within their offices. This means employees that aren’t drivers or mechanics, are at risk of losing their jobs or are in a position where their work productivity is impacted due to working from home. Layoffs in general are an inevitability.
- Drivers no longer working closely with mechanics and technicians
Social distancing between drivers and other essential personnel is also resulting in a lot of lost time. Many carriers are now reporting that drivers carry out light inspections and start performing duties that would otherwise be carried out by maintenance technicians. Because truckers are instructed to distance themselves from other personnel, basic maintenance tasks are slowing down efficiency in the industry overall.
- Many drivers cannot renew their CDL
This is one that comes off a little bit unexpected - but many drivers are having to stop working because of an inability to physically renew their licenses. DMVs are closing all over the country and drivers are left unable to renew. Luckily, many states have extended grace periods for drivers with expired CDLs, some allowing up to 90 days of work post license expiration.
- Drivers have fewer places to park and rest
Many drivers are finding themselves physically unable to take their mandated rest period due to the nation-wide closings of many rest areas, truck stops, and more. In an unprecedented move, many companies are now opening up their yards to all trucks to provide all truckers with a safe and secure environment where they can take a break and reset.
- Drivers are jumping ship to booming sectors
Despite what some may have hoped for, the trucking industry in the US, as a whole, is not experiencing a boom. In fact, many sectors are stagnating or losing business fast. This, and because of a sudden increase in demand for consumer goods - many drivers are jumping ship to do spot work and consumer good delivery. As we’ll discuss later, this is not sustainable in the mid to long term.
- MATS 2020 cancelled
The Mid-America Trucking Show is cancelled this year. This is especially surprising following last year’s tremendous turnout.
Here’s an interview conducted by our partners over at Lanefinder with Ice Road Trucker, Alex Debogorski at last year’s event. Just goes to show how much can change in a year.
- Many overseas shipments cancelled
It’s not the best time to do intermodal work. Shipments from Asia and China are decreasing rapidly.
According to a survey published by the Institute for supply management:
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Manufacturers in China report operating at 50% capacity with 56% of normal staff.
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More than 44% of respondents do not have a plan in place to address supply disruption from China. Of those, a majority (23% of respondents) report current disruptions.
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6 in 10 (62%) respondents are experiencing delays in receiving orders from China.
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Customers temporarily out of business
Restaurants, eateries, bars, and other social establishments are facing some seriously tough times. As a result, they’re not taking in as many shipments, or have as high a demand as previously. Eric Fuller, CEO of U.S.Xpress Inc., when asked about restaurants and retails said they “are essentially shut down nationwide".
On the bright side… at least there’s less traffic.
Who is this crisis affecting?
The short answer is: Damn near everyone.
A survey released by the Institute for Supply Management showed that 75% of respondents have seen coronavirus related transport disruption, with 80% + of the industry expecting to see more disruptions in the near future.
As of writing this article, 33% of trucking companies said they have yet to experience the impact of COVID-19 on their operations.
Whereas 20% have reported experiencing a sharp decline. Those experiencing sharp declines are outside of the consumer goods sectors and include carriers specializing in lumber and metal hauling, as well as car and vehicle haulers, and intermodal workers.
On the brighter side, 13% of companies are expecting a massive boom, particularly in the spot market and consumer goods sector. At least in the short term.
The effect the virus has on you doesn't only depend on the sector you're in, but also which region you're located in, with New York and New England suffering the biggest drops in volume. The heat map below provides a regional breakdown of drop in volumes based on percentage drop from a "normal" weekday or weekend during March 2020:
This heatmap was taken from a blog published by Geotab.
How are companies dealing and preparing for the near future?
There's a lot to be said about preparing and mitigating the negative effects of the current crisis - more than enough to dedicate a book to.
What we can do right no is give you our best advice when it comes to dealing with your recruitment challenges in these times.
We're seeing, amidst the layoffs, uncertainty, and chaos, an industry-wide hiring need like no other. Whether or not you're experiencing booms, busts, or something in between - you're going to be hiring. There's more pressure now than ever before to handle recruitment and the hiring of staff in as cost-effective and efficient a manner as possible.
Good recruitment technology can help you do that. When your recruiters are working from home, when your money's tight, and when you need to make sure you keep your business afloat at all costs, you better have some good tech helping you out if you want to stand a chance.
Great recruitment tech can help you alleviate some of your recruitment challenges in the following ways:
- It can help reduce driver turnover
- It can help you get more drivers to show up to orientation
- It can help you reach qualified drivers
- It can speed up and simplify your recruitment process
- It can help you reach more drivers online, at a fraction of the usual cost
- It can help you stand out from your competition
Besides that, how trucking companies react to this crisis is not entirely within their own hands. Since trucking companies generally handle freight for other customers, much of the impact on their business and operations depends on the decisions being made by those companies. If all industries don't make positive changes towards sustainable and smart practices, the trucking industry won't stand much of a chance.
Otherwise, what you do comes down to how long term your thinking is. Communicating with vendors, and clients, and making sure you’re on the same page as your customers and partners is essential in times like this, even with social distancing in place.
Retaining your drivers and offering competitive rates may also prove challenging in the short term, but in order to create a solid environment where drivers and workers can feel as though they can stick around for years to come, you need to demonstrate forward thinking. It’s hard for anyone to make all the right moves, so the best thing to do is think reasonably and try your best.
Conclusion
What we can do and how we continue to operate is largely outside of our hands. How this whole ordeal plays out is anyone's guess at this point, and it's probably best to draw inspiration from the old British government poster from 1939 and
If you're a company that's looking to optimize your hiring strategy and recruit more efficiently, contact sales@youcruit.com and one of our competent account managers will schedule a free consultation with you.
Until next time, stay safe & healthy.