Freight Capacity Trends During the Coronavirus Pandemic
May 12, 2020
Small businesses across the U.S. are doing their best to get creative and assess all options while much of the country’s economy has shut down during the coronavirus pandemic.
At Freightquote by C.H. Robinson, we’re paying close attention to this crisis and the impact it has on small business shipping.
Most recently, we sat down with our very own Timothy Quinn, Corporate Capacity Manager at Freightquote, to discuss the most recent freight capacity trends during this unprecedented time.
Our first question: How has the coronavirus pandemic affected freight shipping capacity?
There’s no question that the supply chain industry is accustomed to highs and lows. But the coronavirus has introduced a new set of issues. According to Quinn, the pandemic has opened the way for new challenges that are causing capacity to shrink in some areas, and stay the same in others.
Here’s a look at the trends in both LTL and TL freight shipping.
Current Trends in LTL and TL Freight Shipping
Less Than Truckload Trends
As of now, less than truckload (LTL) shipping is pretty steady, says Quinn. While pricing might drop as demand slows or if the pandemic persists, carriers are viewing the crisis as a temporary situation. As a result, capacity is readily available for LTL freight shipping.
According to industry reports, carriers are working hard to lower costs. Carriers are staying disciplined with pricing and operating as usual.
Now is the time to get the best quotes on LTL shipping. We work with a vast network of high quality carriers, so you can compare quotes and find competitive rates for your business.
While capacity on the LTL side has been more consistent, truckload capacity has been more volatile during the pandemic.
“Truckload shipping demand has seen a decrease,” says Mat Leo, Solutions Manager at Freightquote. “Now that people have been quarantined for a while, they’re saving their money. This decrease in demand has left the truckload load to capacity ratio lopsided and truckload carriers looking for more freight in the market.”
For this reason, truckload spot prices have been trending down. The current environment has produced truckload dynamics that makes it much more difficult for carriers to be profitable., says Leo.
The concern here is that when demand increases yet again there will be fewer truckers in business and rates will rise again.
In general, there are five main factors that shape shipping capacity, and driver shortage has always been a big one.
So how are small businesses doing right now? It depends on the type of business.
The small business owner is dependent on whether their business is essential or not. It may become a matter of cash flow and how long a small business can stay in operation depending on how long the coronavirus goes on.
How to Prepare for Market Changes Due to the Coronavirus
The good news is that there are still ways for small business to prepare for market change. There’s even ways for business owners to save money during the pandemic.
Quinn suggests that small business owners stay savvy of credit and terms.
“Be sure that whoever is paying your freight bill is paying them,” says Quinn. “Non-payment of freight can lead to a customer paying for the freight bill twice or other added costs.”
He also suggests that small businesses should take advantage of modal optimization.
“It may be better to move TL or rail in this environment. Or, it might be better to buy in larger quantities to take advantage of saving in TL/rail.”
Along with paying attention to details and making use of modal optimization, make sure you’re trusting the right freight services company for your small business shipping needs.
One of the best ways to avoid major freight shipping capacity trends is to work with an established freight company. Our company, for example, works with more than 78,000 carriers. By using our quick and easy online tool, you can get quotes and pick the carrier you want.
“As a customer and small business owner, you can choose an affordable carrier and diversify your selection by transit days,” says Quinn. “This might allow you to take advantage of lower costs for cheaper rates as an inventory or dock management tactic.”
Freightquote is fully operational during the coronavirus pandemic, and we’re helping small businesses continue meet their shipping needs through our reliable network of carriers.
Get started with a shipping quote today.