COVID-19 Disruption Continues to Affect Freight, Rates

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

Effect of COVID-19 disruptions on truck drivers

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:

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

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.

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