I. Introduction As the coronavirus disease 2019 (COVID-19) pandemic swept into the United States this spring, the impact on businesses of all types was immediate and acute, whether they were deemed essential or not. The extraordinary stress COVID-19 shutdowns placed on supply chains affected all manner of transportation operations, from ocean shipping to parcel delivery. Less-than-truckload (LTL) carriers and their customers were no exception. In fact, thanks to their dependence on networks of terminals, dock workers and truck drivers, they were often more exposed to risk. Each time a shipment changed hands in transit, the potential existed — and still exists — for exposure to the virus.
“Each time a shipment changed hands in transit, the potential existed – and still exists – for exposure to the virus.”
In September, The Journal of Commerce surveyed nearly 100 LTL shippers to gain insight into their experience with LTL motor carriers as the COVID-19 pandemic first led to business shutdowns and a deep recession and then a rapid recovery in freight demand in the second and third quarter. That recovery was complicated by widespread supply chain disruption as companies reopened only to find suppliers and customers were still shut down, had changed shipping and receiving locations, or were operating at reduced productivity rates because of COVID restrictions and a reduced labor force. The ripple effect from that disruption is still with us in the fourth quarter of 2020. The 91 LTL shippers surveyed by the JOC — more than 40 of which have more than $1 billion in annual revenue and a third of which have transportation budgets in the $100 million to $500 million range, revealed serious problems that required significant action in their survey responses. Those actions include the “firing” and replacement of LTL motor carriers that were unable or unwilling to correct service problems that led to serious sales and production issues for the shipper’s customers. The results indicate where shippers and LTL carriers need to focus to succeed in this quarter and 2021 as the COVID-19 pandemic continues to affect global and domestic shipping.
The COVID-19 pandemic unearthed fault lines across shipper supply chains, including the LTL portion of their U.S. transportation networks. Because of the nature of its business, the LTL trucking sector came under greater pressure from the virus than perhaps any freight transportation sector except the parcel and air express industries. That led to service breakdowns and failures that put stress on other aspects of shipper supply chains and imperiled shippers’ service to their customers, whether retailers or manufacturers.
When shippers could not resolve problems with their LTL carriers, they replaced them. However, they also added more LTL companies to their carrier portfolios to ensure they had the truck capacity needed to get freight to their customers.