Currently, the world is in midst of a health crisis of epidemic level because of corona virus. Because of the enormous and widespread effect of the virus for past few months, the crisis has morphed into huge economic setback for several industries as well. The transportation industry, specifically the fleet industry, have been hit hard by the ripple effects of COVID-19, as they are one of the indispensable task force that are still functioning and offering their services to ensure that people are supplied with essential goods and necessities.
Truckers all over the country have been continuously working to transport the necessities from manufacturers to the market, thereby keeping the country’s economy afloat. Their valuable service during these troublesome times have been recognised and praised. However, the small scale trucking companies are facing heavy brunt of the pandemic. Before COVID-19, the fleet industry was seeing a shortage of trucks and licensed truck drivers. But the pandemic has resulted severe operational losses because of which many industries are experiencing financial crunch, and are looking at ways to cut down on expenses. Small scale businesses, however, are facing greater trouble, and a huge percentage of them have already shut down their operations.
Challenges faced by small trucking companies
In fleet industry as well, small sized trucking businesses are already operating at huge losses. Most small and medium sized trucking companies depend on getting contracts after competitive bidding. Given the corona virus crisis, many of these truckers have to opt for lowest bidding, which does not cover their fuel, maintenance, food and boarding, taxes, and other expenses. Mr. Miller, a Hillsborough County (Florida) trucker, has been operating a small trucking company for past 20 years. According to him, before the pandemic, the load boards in the area he operates had hundreds of loads listed, while now there are barely 10 or 11 of the same. This makes bidding extremely competitive, and he can take up the loads only at significant loss to his business. The American Transportation Research Institute and the Owner-Operator Independent Drivers Association have reported that half of the fleets are hauling only half of their original capacity.
The domino effect of the financial crunch has led to substantial decrease in the rate at which the truck drivers earlier hauled the same volume of loads. George Steven, a 45 year old trucker has been operating in Arizona State for past 20 years. As compared to pre-pandemic times when he usually has load to haul on both the ways of his trip, he now has to come back with an empty truck. This has further led to operational loss as the truckers are already accepting hauling jobs at the lowest possible rate. According to the Cass Truckload Linehaul Index, the decline in rates in from January to April of 2020 has been the fastest in the decade.
Given the situation, DoT and FMCSA have also eased the restrictions of Hours of Service, and many other of its rules and regulations. But Utah trucker Brian Rhodes has been finding it difficult to get proper hauling jobs as many businesses have been following strict social distancing norms and often close their businesses early during ‘Safer at Home’ lock downs. Also, as Mr. Rhodes is 58 years of age, and being vulnerable to the virus because of this, he has now decided to stay home and wait for this crisis to get over before going back on the road. Like him, several other truckers have had to temporarily give up on the job and stay home because of either their age or any other underlying medical condition.
As United States has been the worst affected nation, with highest number of infected and dead people, the truckers and other essential workers are in constant state of vulnerability and are most likely to get affected. For a lot of these truckers, it’s do or die situation, where they have to choose to work in such dangerous situation to support their families. They cannot afford to sit at home being sole earning member.
In order to support their counterparts in trucking and transportation industry, a lot of truck stops and their employees have volunteered to keep their facilities open and offer their services to the truckers and drivers. However, due to social distancing norms, many of these facilities do not offer in-house dining but only takeaway; they have closed their resting lounges, and only a few offer washroom and shower facilities. The parking areas are also operating at lower capacity, thereby the truck drivers are notable to find proper place to rest and dine. Several trucker, for the sole purpose of avoiding contact with others and curb the spread of the virus, have resorted to pre-packaged food and cooking their meals on the truck itself.
Greg, a truck driver for 22 years, has installed a small fridge and now carries a small stove with him. He said, “This is new for me. I have been working these routes for two decades now, and always depended on Love’s and Petro for a hot meal and shower. But because of this contagious virus, I now cook my own food. It’s an experience on its own, an inconvenient one, but I wish that things would go back to normal soon.” Like Greg, many truckers are slowly adapting to these changes, but still find it difficult to get a decent parking place or a nice bath.
Matrack Incorporation has created a COVID-19 Heat Map that indicates which city, town and county on the truckers’ route is safer for them to take a rest.
How can smaller trucking companies utilise this time?
Due to the dire working conditions that this COVID-19 pandemic has imposed on several small scale businesses, a huge percentage of them have decided to close shop in order to avoid further losses. However, the government has taken various vital steps like Paycheck Protection Program that helps these smaller businesses to sustain and in the least, manage expenses of minimum operation requirements. A lot of small sized trucking companies have however taken this crisis in their stride and are gearing up for the extra work they will be getting post-pandemic. Banks and financial institutions are offering loans at a very less rate which these truckers are using to revamp their business.
Lionel Ross, a trucker from Montana, has invested his saving in new ELD and fleet management system to update and increase the productivity of his 3- truck fleet. He, along with his two sons, are using this time to take up whatever job they can get, and maintain their vehicles. They have also spent time in learning to use their new FMS in order to be ready when the pandemic is defeated and economy in the country goes back to normal, and hopefully, at a faster pace. They also encourage other truckers and local business to work together at reasonable rates so that their community can overcome this crisis together.
The fleet industry needs to be prepared to work overtime, once the businesses resume all over the world. As a lot of industries have had to lay off their employees, trucking industry seems to be a hot place of choice of work and there has been a rise in interest in trucking as a profession. About 25-40k new, licenced and trained drivers are waiting to join, making trucking, the only profession that has created more job opportunities during the crisis.
According to some seasoned and long-time truckers, here are a few things small sized trucking businesses can do during this pandemic, for a better future:
- Set-up or upgrade their ELD and fleet management system.
- Evaluate the points of excessive cash outflow in the business, and take steps to minimise it.
- Expand and upgrade the existing fleet with better vehicle or parts, given that several business loan companies, spare part dealers and others are offering huge discounts.
- Offer better training and education for the employees that need it.
- Create a workflow schedule that helps in proper management of fleet operations to deal with congestion due to high demand of services after the pandemic.
As soon as the economy resumes, trucking industry will not only see a rise in job opportunities but income as well. Therefore, small scale trucking businesses can use this opportunity to invest in acquiring more vehicles and drivers to meet with the increasing demand. Sectors that have interdependent relationship with fleets like financing companies, GPS and ELD providers and others have already come up with discounted plans and products.
Matrack Incorporation – the helping hand during pandemic
Matrack is very proud of our truckers and their invaluable services. Being in the fleet management industry for long, we are astonished at the patriotism and passion of our truckers. And in order to support them now and in future, we are also offering our ELD, GPS and FMS at great prices. We at Matrack are fully equipped, with best of technology and experience, to help in setting of these new business, and updating the old ones. Given the importance of social distancing, it would be best for new and current fleets to operate as paper-less and contact-less business. And Matrack can help you with the same.
Our service technicians and customer support staff work 24/7, throughout the year to help you with everything your trucking business needs. For more information on our products and services, or any query related to updating your ELD and FMS, please contact us.
Share this article with your fellow truckers to let them know the steps they can take during this pandemic to strengthen their businesses. If you have any tips, ideas, or query, please leave a comment below.