The rapid spread of the coronavirus disease 2019 (COVID-19) in the United States is raising concerns about the ability to ship and deliver goods domestically as businesses are urged to shut down. Over the past week, COVID-19-related closures rapidly extended beyond schools, universities, and churches to bars, restaurants, and other public places.
On Monday, New Jersey became the first state to impose a curfew on non-essential, non-emergency travel between 8 p.m. and 5 a.m. “This will remain in effect for the foreseeable future,” New Jersey Gov. Phil Murphy said in a tweet. “We want everyone to be home — and not out.” The state also wants non-essential retail businesses to close at 8 p.m.
That alone could raise delivery problems in the Garden State and beyond for companies that receive trucks and shipments after normal working hours, and raise demand for more precise delivery times during the day. Driver detention at supermarkets and cold storage facilities could become an even bigger issue than it’s traditionally been, as restrictions on delivery times complicate driver work schedules.
If widespread temporary closure of stores, distribution centers, warehouses, and factories across the US follow, shipping and receiving goods may become more than problematic just as a surge in imports from China finally arrives. Once again, capacity won’t be where it’s needed, driving up costs. That’s a situation shippers may hope doesn’t come to pass, but one for which they need to plan.
Avoiding auto plant shutdowns
The Big Three automakers — General Motors, Ford, and Fiat Chrysler — on Sunday said they are forming a COVID-19/Coronavirus Task Force that will work with the United Auto Workers union to enhance protections for manufacturing and warehouse employees at all three companies, including tighter visitor screening, increased cleaning, and new safety protocols.
“This is a fluid and unprecedented situation, and the task force will move quickly to build on the wide-ranging preventive measures we have put in place,” the leaders of GM, Ford, and Fiat Chrysler said in a joint statement. “We are all coming together to help keep our workforces safe and healthy.” They also want to avoid plant shutdowns that would cost millions of dollars a day.
Warehouse operators are already getting calls asking if they are open “with all these restrictions on how many people can congregate in one place,” a logistics executive told JOC.com. Connecticut, New Jersey, and New York on Monday announced a ban on gatherings of more than 50 people, and similar bans are appearing elsewhere across the United States.
Truck freight flows nationwide may not be restricted yet, but the likelihood they will be is enough to push shippers, and their logistics partners, to think about contingencies that a week or a month ago would have been unthinkable.
Trucking capacity still appears readily available, even as demand for trucks to haul essential consumer goods such as toilet paper, hand sanitizer, cleaning supplies, and canned foods jumped in the first half of March. Long truck lines have been reported at sites such as Procter & Gamble’s Mehoopany, Pennsylvania plant, which produces toilet paper and other products.
Although trucks line up at manufacturing plants producing paper goods and anti-bacterial cleaning products, shippers tell JOC.com they are still receiving “cold calls” from trucking companies looking for business, indicating there’s plenty of truckload capacity available. And dry-van truckload spot rates still haven’t caught up with year-ago levels.
More volatile truck market ahead
Shippers should expect spot truck rates to jump higher this spring, load board operator DAT Solutions said. But those rates may be more volatile than normal. COVID-19 “will add volatility to freight flows, as surges in consumer demand alternate with potential constraints on imports, exports, and industrial production,” Ken Adamo, chief of analytics at DAT, said Monday.
In the meantime, US regulators are offering truck drivers unprecedented relief from hours of service (HOS) regulations — but only to those hauling emergency supplies. The Federal Motor Carrier Safety Administration (FMCSA) on Friday issued its first nationwide HOS emergency relief declaration, following the declaration of a national state of emergency by President Donald Trump.
That doesn’t mean truckers can disconnect their electronic logging devices or throw out their logbooks. The relief applies only to those hauling the following cargoes:
- Medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19
- Masks, gloves, hand sanitizer, soap, and disinfectants
- Food for emergency restocking of stores
- Equipment and supplies necessary for establishment and management of temporary housing and quarantine facilities
That’s still a broad range of products and potential situations, but truckloads of auto parts or flat-screen TVs certainly aren’t going to be covered.
Trucking companies and drivers may want to obtain a statement from a shipper or consignee that their loads are COVID-19-related emergency goods, beyond just a bill of lading, before risking going over the 11-hour daily driving limit or 14-hour daily work limit.