COVID-19 and Its Effects on Freight Capacity

  • COVID -19 Effects on Freight Trucking Companies

The Covid-19 pandemic has caused significant damage to the global economy. It has often halted normal operations, with many businesses forced to close due to various restrictions. The freight trucking sector has also been adversely affected by the pandemic. Many freight trucking companies have needed to adjust their operations due to some of these effects.

Future Outlook

When compared to other crises of the past, the coronavirus pandemic has deeply affected global trade; the damage of which is dependent upon the mode of transport, trade lanes utilized, and types of commodities being transported. With its nuanced nature, this pandemic yields numerous opportunities for supply chain and logistics companies to penetrate the market and develop new service offerings, while positioning themselves against the competition.

Having a detailed understanding of the effects of the pandemic is crucial as it allows freight trucking companies to shift from planning for emergencies, to planning for the future. The pandemic will leave adverse and long-lasting effects on the economy, but trade volumes will eventually recover. For our new normal, freight shipping companies who possess an understanding for how the demand curve evolves will ensure a competitive advantage.

Shipping Capacity

It is normal to experience highs and lows in the supply chain industry. However, the global pandemic has caused several new challenges that have affected freight capacity. In some areas, the freight levels have remained the same, while it has diminished in others. While many freight trucking companies are working to reduce shipping costs there are fears that operational costs may rise as a result of the pandemic. For the moment, less-than-truckload freight shipping remains stable.

Imbalanced Capacity Caused by Northbound Volumes

Northbound volumes have increased significantly; creating a greater imbalance in capacity resulting from increased costs associated with empty trailers returning to the US. International freight shipping companies need to be mindful of this capacity imbalance.

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