More than 3,000 trucking companies were forced to cease operations due to the coronavirus pandemic. The health crisis was a very difficult challenge to overcome for the trucking industry. During the months of April, May, and June, freight volumes plunged amidst the widespread economic uncertainty that pushed businesses to close and put millions of people without jobs.
When the quarantine restrictions were imposed, there was a sudden surge in demand for dry vans and reefers because retailers have to stock their shelves with basic commodities. Everybody was hoping that things will remain the same but as demand was significantly reduced so did spot rates. Spot rates became so low that trucking companies could no longer operate profitably.
Large trucking and logistics companies were able to weather the storm but not their smaller counterparts. Smaller trucking companies experienced more pressure particularly in the second quarter of 2020. When 10,700 trucks were pulled off the roads, the normal result should be an increase in rates. It did not happen as expected because demand plunged further.
May was the peak for the trucking failures with 16,000 trucks pulled from the roads. Small trucking companies rely on spot freight which makes them vulnerable during an economic crisis. The last-minute nature of the spot market means that shipments and pricing tend to become volatile compared to working in contractual arrangements with steady and large customers.
The business of trucking involves being paid an adequate amount for every mile and running enough miles. Spot rates have started to improve and the large number of parked trucks that tightened capacity have driven up demand. As demand is starting to pick up, trucks won’t immediately return to the roads. The pace will be much slower than the rebound in demand. With stronger consumer demand, the economy will pick up which means that trucks will have more freight to move.
A network of state-of-the-art trucking equipment is provided by Titan Transline across the entirety of North America to handle all your loads with precision. Your goods will be transported with the support of further specializations like temperature control, expedited shipments, and large and exceptionally heavy loads.