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Buyers were already slowing their ordering in March 2019, a response to the excess capacity in
the market due to overbuying in 2018.
Spot rates peak, then plummet as
COVID-19 impacts trucking industry
Cliff Abbott
cliffa@thetrucker.com
The impact of the COVID-19 pandemic has
reached trucking rates, too. What the total impact
will be is anyone’s guess, but it’s improbable
that so many businesses could shut down
without a disruption in the supply-and-demand
chain that guides the trucking industry.
At first the impact was good for trucking.
“Recent rate increases have been driven by
aberrant consumer behavior,” explained Ken
Adamo, chief of analytics at DAT. “Water, toilet
paper and other supplies have caused a huge
influx of demand,” he told The Trucker. “It’s
primarily due to social distancing.”
Products were flying off the shelves and
Business
retailers couldn’t restock them fast enough.
Hoarding is a part of it, as consumers worry
about potential shortages of food and household
items such as toilet paper. Another fact,
often overlooked, is that consumer spending
changes when people are stuck at home. More
meals — and more visits to the bathroom —
are now taken at home.
DAT reported posting increases of 39.1%
in March compared to February, besting March
2019 rates by 44.6%. Most of those increases
came in the dry van and refrigerated segments.
As the number of loads increased, rates followed.
After falling to $1.79 per mile in February,
van rates rebounded to $1.87 in March.
See Plummet on p21 m
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During 2020’s first quarter, the American Trucking Associations seasonally adjusted For-Hire
Truck Tonnage Index rose 1.5% compared with the fourth quarter of last year and 2.4% from
a year earlier.
Cliff Abbott
cliffa@thetrucker.com
In a year when sales of new Class 8 trucks
were expected to be on the decline, March
wasn’t a bad month. Mostly that’s because the
effects of a nationwide shutdown caused by
the COVID-19 pandemic had not yet been felt,
even though speculation was rampant.
In March, U.S. sales of new Class 8 trucks
totaled 16,892 according to data received from
ACT Research (actresearch.net). While that
number represents an improvement of 6.9%
over February’s sales of 15,804, “it’s a bit of a
head fake. February tends to be a weaker month,
while March tends to be a strong month, so
we’d expect higher sales,” said Kenny Vieth,
ACT president and senior analyst. Adjusting
the numbers for seasonal conditions would
THE TRUCKER NEWS SERVICES
ARLINGTON, Va. — American Trucking
Associations’ advanced seasonally adjusted
(SA) For-Hire Truck Tonnage Index rose 1.2%
in March after increasing 1.8% in February. In
March, the index equaled 120.4 (2015=100)
compared to 119 in February.
“March was the storm before the calm, especially
for carriers hauling consumer staples,
which experienced strong freight levels,” said
Bob Costello, ATA chief economist.
“But there was a huge divergence among
freight types. While freight to grocery stores and
big-box retailers was strong in March, especially
May 1-14, 2020 • 17
March Class 8 sales down year over year;
pandemic expected to accelerate decline
show a decline of about 9%, according to Vieth.
One reason March is expected to be stronger
is that it’s the last month of a calendar
quarter, when businesses tend to make adjustments
that impact quarterly financial results.
Another possible reason is simple: There were
two more business days in March than in February,
22 versus 20.
Compared to March 2019, when 23,340
new Class 8 trucks were sold, truck sales this
March declined by 27.6%.
Of the 16,892 trucks sold in March 2020,
11,673 (or 69.1%) were fifth-wheel-equipped
road tractors, up 7.7% from February but down
a whopping 33.3% from March 2019.
Vocational tractors — those equipped
with dump, refuse or other bodies — made up
See Sales on p19 m
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As more people were told to stay home in late March, their spending habits changed. Products
have been flying off the shelves and retailers can’t restock them fast enough. At first, this was
good for the trucking industry.
ATA’s truck tonnage index rises 1.2% in
March, a gain of 4.3% over March 2019
late March, due to surge buying by households,
freight was anemic in other supply chains, like
that for gasoline, restaurants, and auto factories,”
he continued. “Because of this, and the continued
shuttering of many parts of the economy, I would
expect April tonnage to be very soft.”
Compared with March 2019, the SA index
increased 4.3%, which was preceded by a 2.6%
year-over-year gain in February. During 2020’s
first quarter, the index rose 1.5% compared with
the fourth quarter of last year and 2.4% from a
year earlier.
The not-seasonally adjusted index, which
See Tonnage on p19 m