• ITVI.USA
    11,074.870
    63.600
    0.6%
  • OTRI.USA
    5.340
    0.050
    0.9%
  • OTVI.USA
    11,048.870
    52.590
    0.5%
  • TLT.USA
    2.580
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.020
    0.120
    6.3%
  • TSTOPVRPM.CHIATL
    1.590
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    7.4%
  • TSTOPVRPM.DALLAX
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    -0.030
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    0.070
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    1.140
    0.040
    3.6%
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    2.390
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    1.3%
  • WAIT.USA
    120.000
    -19.000
    -13.7%
  • ITVI.USA
    11,074.870
    63.600
    0.6%
  • OTRI.USA
    5.340
    0.050
    0.9%
  • OTVI.USA
    11,048.870
    52.590
    0.5%
  • TLT.USA
    2.580
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.020
    0.120
    6.3%
  • TSTOPVRPM.CHIATL
    1.590
    0.110
    7.4%
  • TSTOPVRPM.DALLAX
    1.380
    -0.030
    -2.1%
  • TSTOPVRPM.LAXDAL
    1.930
    0.070
    3.8%
  • TSTOPVRPM.PHLCHI
    1.140
    0.040
    3.6%
  • TSTOPVRPM.LAXSEA
    2.390
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  • WAIT.USA
    120.000
    -19.000
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American ShipperLess than TruckloadNewsShippingSupply ChainsTruckingTruckloadWarehouse

American Trucking Associations: ‘The second quarter is going to be terrible’

Bob Costello expects many trucking companies to go out of business before the economy recovers from the recession caused by the coronavirus pandemic

American Trucking Associations Bob Costello says the U.S. economy is going to “get ugly.”

“We’re in a recession. The longest economic expansion in our nation’s history is over,” said Costello, ATA’s chief economist and senior vice president of international trade policy and cross-border operations. “The second-quarter GDP, you can expect that to decline on an annual basis up to 20% — unprecedented.

“Going back to the financial crisis for comparison purposes, the worst quarter was the fourth quarter of 2008. We saw an 8.4% reduction. So if we’re pushing a 20% reduction in GDP, you know it’s bad,” Costello said during a Council of Supply Chain Management Professionals (CSCMP) webinar Friday.

“Uncertainty is skyrocketing. Forecasting is difficult enough to begin with, let alone when we’re in unprecedented times,” he said. “One thing we do know, though, is we’re in a recession, the second quarter is going to be terrible.”

Costello said if the coronavirus crisis wanes and “we can start to get back to some normal times in June or July, I’m hoping we can have more of a V-shaped recovery.”

A V-shaped recovery would be one in which factory production, freight moves and consumer spending rebound to precoronavirus levels quickly.

In the meantime, there will be “winners and losers” during the economic crisis, Costello told webinar host Gail Rutkowski, executive director of the National Shippers Strategic Transportation Council (NASSTRAC).

“The vast majority of businesses are going to hurt and hurt badly,” he continued, singling out restaurants as big losers. “The job market is deteriorating quickly. Just over 10 million people filed for unemployment in a two-week period — just nothing even close to that in history. That all is going to have a major impact on shippers.”

Stay-at-home orders obviously impact shopping and consumer behavior. Costello said e-commerce of course is a winner and may remain so even after restaurants and brick-and-mortar stores reopen.

“I do think you’ll probably see online [businesses] grab market share and retain a lot of it,” he said. “I think supply chains are going to change from all of this.”

He noted that in an economy that was in good shape prior to the coronavirus outbreak, “inventories were bloated.” Now freight demand is shrinking — and makes trucking a loser.

“That means I would expect a lot of trucking failures. I hate going out and saying that, but I think you need to know that. Even with SBA loans, it’s federal help, but it’s not going to save the day,” he said.

“Related to that, I know as shippers some of you are looking to extend payments to your vendors, including trucking companies,” Costello continued. “I get it. Everybody’s just trying to survive. … There are going to be a lot of fleets that end up failing if they don’t get paid in time.” 

The lack of demand also will force fleets to lay off drivers, Costello said, explaining that when freight returns, capacity will become an issue again.

“When you see some of these fleets go out of business — and I’m expecting a lot of them — I think things are going to get really tight — 2014 tight or even more so. That is also something shippers need to watch for,” he said.

Costello said shippers and consumers should thank the truck drivers who are out on the road delivering freight rather than hunkering down with their families at home during the coronavirus crisis.

“Truck drivers are heroes on the highway right now. They are on the front line. I get it. A lot of places are nervous about coming into close contact with people, but we need to make sure that we treat drivers the way they need to be treated for doing this,” he said. “We wouldn’t have goods if it wasn’t for them. As shippers we wouldn’t have products to sell. Your supply chains would break down without the drivers. … We need to make sure that they have a place to use the bathroom.”

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Kim Link-Wills

Kim Link-Wills has written about everything from agriculture as a reporter for Illinois Agri-News to zoology as editor of the Georgia Tech Alumni Magazine. Her work has garnered awards from the Council for the Advancement and Support of Education, the Georgia Institute of Technology and the Magazine Association of the Southeast. Prior to serving as managing editor of American Shipper, Kim spent more than four years with XPO Logistics.

13 Comments

  1. I agreed. And – I bet half the businesses in logistics and trucking will collapse if this goes on for 3 or 4 months…faster if their customers fail as well and don’t pay them all the money owed. MASSIVE DEBT EVERYWHERE will be the cause of these failures. Everyone has too much debt and owes everyone else money. As more companies con’t pay their vendors…. the dominos will fall and the entire house of cards implodes.

    We will have to then restart and rise from the ashes. This is not a joke. Think about it. If all YOUR customers don’t pay you next month….COULD YOU SURVIVE???????????

    1. Crazy times! My husband and I team for Reefer Company out of GA. Thankfully we are on salary and have been assured the company can weather the storm. Company will pay salary of anyone quarantined etc. Sitting for a day in CA due to cancelled loads. Very unusual for us!

      1. Kathryn.
        Your tax money is paying your salary via the small business loan.
        Ultimately you will be paying for it with higher taxes and inflation.

        No difference between unemployed getting EI or on your company payroll not working…
        Still costs the taxpayers.

    2. I am waiting for this so the pay rate must get higher than it was in 1994 26cent a mile and now it it’s going to be over a dollar per mile hip hop hooray.

      1. Rates suck due to illegal aliens willing to work for peanuts.

        Thank democrats and republicans for allowing illegals to take jobs at lower pay.

        The border wall is a publicity stunt. It will do nothing about the millions of illegals already in the USA depressing wages.
        It would be best if everyone was automatically citizen as everyone would want maximum pay.
        But that would not be good for the special interests of politicians.

        Anyone 2020! Doesn’t matter!

        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:

          Quote:

          “Rates suck due to illegal aliens willing to work for peanuts.”

          Careful concerning what you allow yourself to be lead to believe .

          Demand and supply will dictate rates in a competitive industry .
          Granted people who “cheat” may obtain an unfair advantage , however , those who cheat didn’t supress rates when demand was higher than capacity available to cater to it as near and during the recent peak . Despite “cheaters” rates were increasing and so was driver wages .

          Now that the peak in demand has passed , all of a sudden we blame the “cheaters” for lower rates ? One could argue that a carrier who has thousands of trucks can offer a lower rate based on volume , gain an edge , and cut out the little guy unfairly as well .

          But what if a certain amount of truck drivers were to unite and organize and eventually become a majority ? Would they monopolize the industry ? Would they be in a position to prevent unfair competition or prevent competition altogether ? If truck drivers united , behaved ethically ,and had a monopoly on the industry , that monopoly couldn’t be broken nor would it be “illegal” .

          Quote:
          ” Holding a dominant position or a monopoly in a market is often not illegal in itself, however certain categories of behavior can be considered abusive and therefore incur legal sanctions when business is dominant.”

          There you have it . A “monopoly” is not illegal in itself , it’s the behavior exercised within it that can render it so or not .

          If truck drivers would wake up and unite they would graduate from kindergarten straight to university .

          In my humble opinion …………

  2. Quote:

    “We wouldn’t have goods if it wasn’t for them. As shippers we wouldn’t have products to sell. Your supply chains would break down without the drivers”

    Sure we would have goods . We’re very creative . We would simply figure out and create a different way . In a worse case scenario we would go back to the horse and buggy and be limited to shop local goods .

    We’ve survived through much harder and primitive times compared to what we’re going through now as a species .

    Second point : In regards to trucks driver treatment . They should be respected and treated well all year round 24/7 as should everyone else on this planet , not only due to a pandemic .

    Third. In regards to the economy . Yes sir ! As stated before this Covid-19 outbreak , the next economic blow(correction) would be a heck of a lot worse than the one in 2008 . Now we’re in the midst of its revelation and soon to be confirmed officially . Add the COVID-19 pandemic to that prediction and we can get an idea based on what occurred 100 years ago .

    Quote from the NBER website : “The 1918 Flu Pandemic Hit GDP Hard: Economists”

    On a brighter note , keep in mind what followed : The roaring 1920’s thereafter . But then again , what did that lead to in 1929 ?

    Coming out of this one , inflation is going to be insane in the next bull cycle , and quite an insane bull cycle should ensue . Then the next bust will be even worse than this one .

    Whoever said history doesn’t repeat , well it sure as hell rhymes !
    Around every 100 years a pandemic occurs !

    -1817 first Asiatic cholera pandemic.
    -1918/19 Influenza pandemic .
    -2019/20 coronavirus pandemic .

    In my humble opinion …………..

    1. An interesting report was written and released in 2007 titled :

      Economic Effects of the 1918 Influenza Pandemic
      Implications for a Modern-day Pandemic
      Thomas A. Garrett Assistant Vice President and Economist Federal Reserve Bank of St. Louis

      Quote:
      Economic Effects of the 1918 Influenza Pandemic

      “These general effects in 1918 can be used to extrapolate to the potential economic effects of a modern-day pandemic.”

      It’s very short . However, as I’ve stated in prior comments , one must learn from the past otherwise will be doomed to repeat it . No country in the world had prepared for this “Modern-day Pandemic” possibility ! Some even did worse , they didn’t take it seriously ! One country that didn’t take it seriously is so embedded with infected citizens and the count rising , it’s now preventing a company in its country that manufactures the N95 masks from selling them to other countries due to that country’s mask shortage and desperate need for them .

      That country is the most powerful country in the world and wants to police every other country and dictate how they should behave ! Though they themselves have turned a blind eye and didn’t prepare nor take a modern day pandemic seriously ! In other words that country doesn’t walk their talk and nor is its current leader(s) ! No wonder this current COVID-19 became a pandemic ! Everyone is sleeping at the helm while attempting to dictate how others should behave .

      All these highly educated and experienced “experts” have FAILED miserably ! Now we have a worldwide crisis on our hands causing absolute chaos and loss of life which could have been prevented if properly managed !

      2020 as I’ve indicated many times previously will be a huge eye opener/wake up call . Observe & learn !

      In my humble opinion ………….

  3. This was as bad as 2008 last fall. Many trucking companies with insurance issues and increased insurance costs were already borderline. We need to look at trucking airfreight and shipping by boat and have a complete review. Truck drivers are now risking their health. We need to have all truck drivers on payroll including part of a owner-ops pay. Minimum wage rates and insurance reform so that small fleets and new truck drivers can get affordable insurance coverage ( this may include government insurance) for trucking busses and wheelchair vans and taxis. Uber needs to have all their drivers with payroll deductions. Some of the same companies who said reductions in payments to the disabilities and homeless people now wants the taxpayers to bail them out. Any trucking company or airline wanting over $100,000 needs to show fair treatment of their workers and explain all court cases launched by workers in the last 7 years.

  4. Kathryn.
    Your tax money is paying your salary via the small business loan.
    Ultimately you will be paying for it with higher taxes and inflation.

    No difference between unemployed getting EI or on your company payroll not working…
    Still costs the taxpayers.

    1. Speaking of taxpayer cost , wait when we get through this COVID-19 pandemic . The toll on tax payers will also be unprecedented ! Inflation would be an understatement . Hyperinflation is more like it .

      In my humble opinion ……..

  5. Lots of experienced drivers are going to lose their jobs, but you want to push the false driver shortage to fill the schools of the mega companies. You want inexperienced people driving so you can pay them next to nothing, and try screwing them on leases. The ata is only a rep for the megas, and an enemy of the rest.

  6. Merci pour le commentaire.
    Bien vu comme sujet. Je pense que vos analyses sont bien constructives en matière de référencement, je prend note!
    Merci en tout cas pour l’intervention constructive.
    Bonne journée!

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