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American Trucking Associations President Chris Spear is proud of the work his industry is doing to help the nation through the COVID-19 crisis, but notes that challenges lie ahead for business and government as the country remains stymied by the virus.
“I think it takes some foresight to really anticipate where this is headed, and if it does change, it’s going to change rather quickly,” Spear said during a March 28 interview on Transport Topics Radio on SiriusXM.“I think we are in a phase now where we are seeing an uptick for a number of industry segments, such as truckload, refrigerated. But you also see less consumption of fuel. We’re not seeing flatbed or agriculture benefit from this as much as we’d like. We’re seeing a lot of sectors that are not seeing that growth. It’s not across the board, and I think it’s very responsible for us to be looking two, three quarters ahead at what this may be looking like.”
Spear saluted the 3.5 million truck drivers on the road who are putting in the time away from their homes and family members, bringing needed supplies to millions of people who are staying home to help slow the spread of the virus.
“This certainly brings again what our industry does for the entire American economy to help us get through it,” he said. “If you want those shelves restocked, if you want the medical supplies and the test kits brought to the front line, you’ll need our industry, and I think people now have a laser focus on that and that is very appreciative.”
Spear added, “This is unprecedented. This is clearly our time to shine.”
Cooperation from government agencies is helping trucking meet the challenge, he added.
“I’ve had several calls with (Department of Homeland Security) officials, White House officials,” he said. “Our state executives have been very helpful dealing with governors and mayors that also have a role, and make decisions that can be adverse to our industry if they are not treated correctly,” he said.
Spear believes the $2.2 trillion congressional stimulus package will be helpful to many small and medium-sized trucking companies, since the legislation includes $377 billion in small business loans to help companies with payroll and other expenses.
“I’m very appreciative of the decision-makers, including Capitol Hill, with the legislation they just passed, recognizing that our industry is welcomed,” Spear said. “Making certain we can do our jobs successfully through this pandemic is very important.
The Federal Motor Carrier Safety Administration on March 13 took one such move by suspending certain hour-of-service rules for trucking companies carrying essential supplies. Those guidelines were updated March 18.
“How long the HOS and other exemptions go on — we’ll have to wait and see,” Spear said. “I don’t think it’s indefinite. Certainly, I believe the federal government is going to give us the relief we need to continue to do our job and serve the economy while this crisis unfolds.”
In the near-term the industry is definitely busy; DAT Solutions said spot rates rose 12.6% during March amid surging demand to keep stores and hospitals restocked. Longer-term, however, there are concerns. For example, the Port of Los Angeles executive director Eugene Seroka has said the facility is operating at about 80% capacity now, below normal levels. While he notes there are signs manufacturing is ramping back up in China — where many of the port’s imports originate — it will still take time before activity returns to normal.
Seroka
“We’re looking at June before China gets back up and running as far as its contributions to our industry to move freight,” Seroka said.
China’s official manufacturing Purchasing Managers’ Index is forecast to rise to 45 in March, from a record low of 35.7 in February, according to the median forecast of 18 economists polled by Reuters. Despite the uptick, the reading is still below the 50-point mark that separates monthly growth from contraction.
“You have to look this not in days and weeks, but by quarters and really anticipate what segments of trucking will do and what we believe won’t and where the relief needs to be channeled,” Seroka said. “We have ample space and room to manage cargo as we normally do. The supply chain needs to remain fluid so these critical goods and other products can get to consumers and others who need them.”
Spear said the trucking industry is doing its part. “This is what we do every day,” he said. “Our drivers, our industry, are really stepping up to do what it does best, and that’s to help us get through this as quickly as possible.”
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