With the COVID-19 crisis continuing to affect the entire United States from the East Coast to the West Coast, U.S. truckers are bracing for further disruptions to normal trucking operations.
According to market data compiled by IHS Markit and Morgan Stanley and published on JOC.com, peak disruptions for the U.S. trucking industry are still to come. Simply put, the uncertainty surrounding the COVID-19 crisis makes a traditional economic recovery unlikely, and there may be prolonged economic disruptions for months to come. All of this uncertainty is sure to affect consumer demand, and with it, volumes that truckers are expected to transport.
Surveys of transportation executives by financial giant Morgan Stanley show that as soon as the next month, and most likely within the next 90 days, U.S. supply chains will experience the peak of COVID-19-related disruption. Whether or not this will mean a quick recovery back to normal transportation activity for truckers remains to be seen. The firm says that COVID-19 disruptions may continue for as long as another year – something that while previously unthinkable is not out of question.
Information and analytics company IHS Markit sees peak disruption during a similar time period, but with one big caveat: small and medium-sized business failures and bankruptcies may prolong an economic recovery for truckers. It is even possible that these business failures and challenges could dampen broader consumer demand for a longer period of time.
So, how did demand collapse for U.S. truckers in such a short time period?
The answer is quite simple: COVID-19 and its associated societal shutdowns forced trucking activity across the United States to drop precipitously in the latter half of March and first half of April, leading to massive disruption. With broad swathes of the American, and global, economy shutdown due to the coronavirus starting in March of this year, consumer demand for many industries has all but collapsed. This, in turn, has driven manufacturers to stop shipping massive amounts of consumer and industrial goods – goods that are carried across the country by a massive fleet of truckers.
At this point, it is clear that U.S. Q2 2020 GDP will be negative, and the prospects for growth during the first half of 2020 have dimmed completely. Still, there are signs that the U.S. economy may be back up and running – at least at 80% or more – by the start of the summer season in June. Until then, truckers, shippers, and all Americans await better days ahead.