• ITVI.USA
    11,024.960
    -148.680
    -1.3%
  • OTRI.USA
    5.290
    0.170
    3.3%
  • OTVI.USA
    11,008.210
    -142.250
    -1.3%
  • TLT.USA
    2.530
    -0.030
    -1.2%
  • TSTOPVRPM.DALLAX
    1.380
    -0.030
    -2.1%
  • TSTOPVRPM.PHLCHI
    1.140
    0.040
    3.6%
  • TSTOPVRPM.CHIATL
    1.590
    0.110
    7.4%
  • TSTOPVRPM.LAXSEA
    2.390
    0.030
    1.3%
  • TSTOPVRPM.LAXDAL
    1.930
    0.070
    3.8%
  • TSTOPVRPM.ATLPHL
    2.020
    0.120
    6.3%
  • WAIT.USA
    120.000
    -19.000
    -13.7%
  • ITVI.USA
    11,024.960
    -148.680
    -1.3%
  • OTRI.USA
    5.290
    0.170
    3.3%
  • OTVI.USA
    11,008.210
    -142.250
    -1.3%
  • TLT.USA
    2.530
    -0.030
    -1.2%
  • TSTOPVRPM.DALLAX
    1.380
    -0.030
    -2.1%
  • TSTOPVRPM.PHLCHI
    1.140
    0.040
    3.6%
  • TSTOPVRPM.CHIATL
    1.590
    0.110
    7.4%
  • TSTOPVRPM.LAXSEA
    2.390
    0.030
    1.3%
  • TSTOPVRPM.LAXDAL
    1.930
    0.070
    3.8%
  • TSTOPVRPM.ATLPHL
    2.020
    0.120
    6.3%
  • WAIT.USA
    120.000
    -19.000
    -13.7%
Air CargoAmerican ShipperAsia-PacificBusinessCanadaContainerEuropeIntermodalInternationalMaritimeNewsRailShippingSupply ChainsTrucking

How coronavirus could affect supply chain and freight shipping

In addition to the illnesses and deaths associated with COVID-19, the novel coronavirus, how could this issue affect the trucking industry and the supply chain at large? Here are five likely possibilities.

1. It could hinder global movement

Conferences, sporting events and other large gatherings are rapidly getting canceled. Beyond those choices, some people reason that it’s best to stay put. 

Jacob Funk was part of a team that investigated the effect of the coronavirus on global movements, such as when people travel between countries for study, work or pleasure. 

Speaking about a potential impending deglobalization effect, he noted, “It occurs every time you have events that disrupt supply chains, and students and tourists are the people portion of supply chains. We must be clear that the coronavirus is a shock to mobility. The impact [to mobility] is very large if the outbreak is not contained [outside of China].”

If people delay plans to take vacations or study abroad, those decisions have a ripple effect on the supply chains of various industries, ranging from foodservice to hospitality. They affect American transport, as well as people-based movements happening elsewhere. 

(Photo credit: Jim Allen/FreightWaves)

2. It may hurt employment

Even before the coronavirus hit, the freight industry was in a recession. Cass Freight Index statistics showed that January 2020 marked the 14th consecutive month of year-over-year declines. Some American ports are particularly feeling the pinch since COVID-19 became a concern. 

Eugene Seroka, executive director of the Port of Long Beach, mentioned how one in nine Southern California jobs are port-related. He clarified, “That’s a million jobs. Less cargo means fewer jobs. The truck drivers are not pulling as much freight. The longshoremen are not being called out to work as frequently as they normally would be.”

Weston LaBar, chief executive of the Harbor Trucking Association, gets more specific: “Business is down 60% to 70% for the last week of February and into March. The coronavirus has already cost our industry millions upon millions of dollars in lost productivity and administrative costs.”

Some people in the freight and trucking industry are already getting less work. If that continues, the overall decline in employment opportunities could be vast. 

(Photo credit: Jim Allen/FreightWaves)

3. It could impact future production

Outside of supply chain shortages for finished goods, the coronavirus could slow down the delivery of products not yet built. 

Jack Buffington, an assistant professor who teaches supply chain management at the University of Denver, explained, “You’re seeing electronics being impacted, you’re starting to see some pharmaceuticals being impacted. The way the world’s supply chain works, people think of manufacturing as finished products, [but] they have to understand, a lot of it is components. So, this proliferates across the entire world’s supply chain.”

Any supply chain slowdowns don’t only affect consumer goods. Defense branches of the government have requirements for their contractors’ purchases, and the coronavirus could cause unforeseen consequences as parties try to fulfill those. 

4. It may curb spending

Retailers around the world temporarily closed stores to try and halt the spread of COVID-19 among communities. However, even if many shops remain open, experts anticipate a psychological shift that will make consumer confidence plunge. 

Michelle Girard, chief U.S. economist at NatWest Markets, spoke on CNBC recently about what could happen. “It’s the psychology change here as the virus begins to spread that is most worrisome for me. People just begin to pull back on their willingness to be out there and spending, and of course, in the U.S., the consumer has been the economic bright spot.”

If that happens, the people who work in warehouses to pack orders, drive them to their destinations or otherwise deal with aspects of American transport and the preparation of goods will experience negative ramifications around the world. However, companies offering deliveries to consumers’ doorsteps may see surges in business.

(Photo credit: Jim Allen/FreightWaves)

5. It exposes supply chain vulnerabilities

COVID-19 harshly illuminated supply chain problems, but brands must evaluate what they can do. 

Richard Wilding, a professor at the Cranfield School of Management, urges businesses to assess and mitigate supply chain weaknesses immediately. “Companies need to urgently review their supply chain to find out how exposed they are. They need to ask the question as to where their suppliers and suppliers’ suppliers are located and review other sourcing locations, which, although often more expensive, can protect from disruptive events such as this,” he said.

An impact on the trucking industry and more

It’s anyone’s guess as to when COVID-19 cases might settle down and let the world get back to as much normalcy as possible. Supply chain professionals must stay educated by doing things such as watching the Cass Freight Index and working continually to positively impact the aspects within their influence. 

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Kayla Matthews

Kayla Matthews is a technology journalist and writer interested in manufacturing and the supply chain. Her work has been published on Thomas Insights, Industrial Machinery Digest, American Machinist and Manufacturing.net.

4 Comments

  1. Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU'LL PROSPER ! IMHO says:

    The latest developments on COVID-19 in Canada
    Quote:

    “Transport Minister Marc Garneau says certain kinds of workers who need to cross the Canada-U.S. border will be exempted from requirements to self-isolate. He says that includes airline, train and marine crews, truck drivers and other people whose profession requires cross-border travel. Americans are also being exempted from a ban on international travel to Canada being put in place by the federal government. Garneau says those measures will take effect on Wednesday. ”

    Now how can we take these politicians seriously when they state that they are doing all that they can to prevent the virus from spreading ???

    They are putting truckers at an increased risk which is increasing public risk ! It doesn’t take a genius to figure out that the virus will continue to spread between the USA & Canada ! What enhanced safety measure are these so called trucking associations taking now to ensure trucker “safety” during this pandemic especially since some will be continuously crossing the border in and out ???

    I’ll tell you what they’re doing , NOTHING ! The FMCSA is doing the opposite ! They’re waiving the HOS regulation which will increase driver fatigue and thus weaken their immune system in the process . This is safety negligence beyond belief !!!

    There has never been a time where being a truck driver has been riskier than currently . BE VIGILANT !

    In my humble opinion …………

  2. I completely understand your concern. I have specialized experience in the Transportation Industry. Your health is more important than ever right now. Business Owners will receive additional funds to combat this issue. The problem is…the Owners and the Executives will not tell you this. Bottom line is they are too concerned about their own profits and financial needs. They will stop at nothing to turn a profit. Please, listen to your State Government Officials. You can get around this. Health and Safety before Corporate Greed. The ball is in your court right now…stand your ground, demand higher pay and less hours, call out if you need to. If you sacrifice your life for this industry, then they win.

    1. We have a mess in Ontario Canada no protection for truck drivers from Canada while in the U S. A real good chance can get stuck in a shelter in place programs. You are taking a very high risk. The recession caused by C 19 will lead to a truck surplus unless many truck drivers get very sick or leave the industry. Do not trust the Insurance companies in Ontario Canada. I camped out at queens park from January 24 to March 15 protesting both the insurance companies caused homeless people in Ontario. The Ontario government cuts hurt medical treatment for homeless and greatly increase the risk of C 19 spread in Ontario .

  3. These are very uncertain times that we are living in right now. Coronavirus has impacted nearly every facet of our lives. Freight shipping is no different. The trucking industry has a heavy burden to bare because they are needed even more now because people are counting on them to replenish everyone’s supplies. Stay safe out there everyone!

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