Truck Shortage amid Covid-19

Hello everyone! Let's talk trucking! As many of you are aware, the arrival of Covid-19 made the industry fluctuate in ways we have AND have not seen before. Before the virus hit the states, there were carriers and Owner Operators in California either closing operations or scrambling to adjust to the new 1099 law in effect. Over 800 carriers closed operations in the first 3 quarters in 2019 due to the new 1099 law in CA. Some of them were big time carriers with over 3000 trucks, completely closing operations with drivers abandoning trucks on the spot. That had a dramatic effect on the market there, depleting the overall available capacity, and once the virus hit it was like an atom bomb dropped on both sides of the industry. Many retailers suffered major revenue losses due to the virus, and have filed bankruptcy. Some of them won't even survive the bankruptcy and will liquidate inventory to completely close for good.

Retailers, carriers, you name it, are reeling from the effects of the virus, and there is no end in sight. The direct result of carriers closing or adjusting operations have depleted the overall number of trucks available on the market to haul freight. This didn't really show a fluctuation either way on the rate market, as there were so many retailers that shut down DC operations amidst the initial hit of the virus, as the drop in freight volume coincided with the drop in available overall capacity. But once those retailers were able to resume operation and distribution, the spot market exploded as retailers rushed to get merchandise into stores for people to resume in-store shopping. I am sure most of you have seen massive rate spikes in some areas of the country, and as states open and close business sectors amid Covid-19 positive case spikes, we will continue to see massive highs in lows in most areas of the US.

Those of you that have contracted rates with customers, I am sure are seeing dramatic effects in capacity as Carriers and Owner Operators are chasing the money. One thing I can offer is for you to talk with your customer, and be open with them. If you are experiencing capacity issues because of the rate spikes, sit down with them and try to work out a temporary solution to increase rates to increase capacity. Brokers with spot market freight, this is time to go out and secure capacity and look for more customers to ship for. They may be paying top dollar on the spot market and may need brokers with connections to carriers with better rates. You may be able to secure long term business starting out as a short term solution.