Motor carriers have been whipsawed by the pandemic. Yet through perseverance, grit, and savvy, they have managed to keep the trucks running and employees safe, making essential deliveries to support millions of stay-at-home families and an economy struggling to find new footing.
Dave Bates, senior vice president of operations for Thomasville, North Carolina-based Old Dominion Freight Line (ODFL), has dealt with hurricanes, floods, tornadoes, strikes, recessions, and numerous other disruptions during his 33 years in the trucking industry. “This is by far the most challenging environment we have ever had to operate in,” he observes.
The less-than-truckload (LTL) carrier saw an immediate 20% drop in shipments when the pandemic hit in late March and raged across the country in April. May saw a nearly 17% drop, he notes. Some segments of the business fell off a cliff, while others rebounded relatively quickly. “We are heavy into food supplies and medical products as part of our normal [mix]. That picked up for us,” Bates recalls. “It was the [small business] mom-and-pop type freight where we saw it dry up because they were not able to be open.”
With the onset of the pandemic and its initial impact on volumes, ODFL, which on average handles some 120,000 LTL shipments daily, made an immediate decision to right-size its workforce. The company in April furloughed about 15% of its employees, in three phases, for 90 days—and kept their health benefits intact. “We knew at the beginning of the pandemic [the impact on the business] was not going to last long,” Bates notes. “We wanted them back, and we knew [conditions would change and] we were going to need them back at some point.”
Through it all, service levels remained consistent across ODFL’s network of 238 service centers, which, Bates says, is a testament to ODFL’s nonunion workforce. “None of this would be possible without our employees stepping up and doing what was needed. I could not be prouder of our team and what they’ve done to get us through,” he says, adding, “I hope we never have to go through this again.”
TURNING THE BUSINESS ON ITS HEAD
At Richmond, Virginia-based Estes Express Lines, a purposeful shift several years ago to increase its presence in the burgeoning e-commerce, omnichannel, and last-mile segments helped blunt the downside business impact of the pandemic, says Pat Martin, vice president of corporate sales and strategic planning.
“Delivering [e-commerce purchases] last-mile to homes and helping businesses [and fulfillment centers] restock, that’s what’s driving the market right now,” he notes. Consumers relegated to being at home have doubled down on projects, ordering “everything from basketball hoops to hot tubs, pool and yard supplies, and patio furniture—anything to fix up the house.”
Traditional business expectations and operating assumptions have been turned on their head. “Parts of the economy have never been better, and other parts have never been worse,” Martin notes. “The market is simply crazy right now; it just depends on what your mix of business is.” While Estes saw business fall off in April and May, June and July have seen a recovery, to the point where the company has begun aggressively managing capacity. “We’re not bringing on a lot of new business right now; [we’re focused on] taking care of our existing book of business,” he says.
ALL HANDS ON DECK
For Memphis, Tennessee-based FedEx Freight, at the outset of the pandemic, figuring out who was closed and who could still accept deliveries became an immediate challenge, recalls Lance Moll, senior vice president of operations. “We called 24,000 customers prior to attempting delivery to confirm whether or not they were open,” he says.
It was a critical time where essential freight still had to be delivered where it was most needed. The company responded with an “all hands on deck” approach, proactively reaching out to shippers to confirm operating hours and set specific pickup and dropoff times. Drivers were equipped with protective gear. Cleaning and disinfecting routines were implemented for offices and trucks. Protocols were adopted to limit close contact between drivers and shippers. Signature requirements were suspended to help maintain proper social distancing.
At the same time, exploding e-commerce volumes accelerated use of the company’s FedEx Freight Direct service, which provides home delivery of heavy, bulky items, such as fitness gear, outdoor furniture, and sewing cabinets. The service, which had been growing at a decent clip prior to the pandemic, really took off as homebound consumers began ordering more oversized items from online retailers. “The pandemic continues to drive unprecedented volumes, and we have managed our linehaul model to align with current demand,” Moll notes.
AGILITY TO THE FOREFRONT
With market disruption and a clouded view of the future, fleets are placing a premium on flexibility and agility. One example is St. Louis-based CPC Logistics, which provides CDL (commercial driver’s license)-qualified drivers to private fleets and other dedicated needs. It is one “leg” of a three-legged trucking operations stool: CPC manages all aspects of driver recruiting and deployment, the manufacturing or retailing business (such as a pharmacy, automotive aftermarket, or consumer products concern) does network and route planning, and a third party provides the rolling-stock equipment and maintenance.
This “unbundled dedicated” model flexed with the pandemic, such that “we were able to move drivers from one area or customer to another who saw higher demand and needed more capacity,” notes Dan Most, CPC Logistics’ vice president of safety and operations. “That met the customer’s volume need while making sure the driver had the opportunity to work and continue earning a paycheck.” CPC Logistics has about 3,000 full-time drivers assigned to its clients.
TUNING IN TO DRIVERS
On the truckload side of the business, carriers report a similar story. Freight disappeared in late March and early April, then began a slow but determined rebound. “People are refocused. There’s hardly any inventory,” notes Greg Orr, executive vice president of U.S. truckload for Canada-based trucking conglomerate TFI International. “A lot of catch-up is happening with supply chains right now.”
Orr’s management portfolio includes the operations of TFI truckload subsidiaries CFI and Transport America. He’s observed that currently, some 65% of their customers are seeing solid, steady volumes. The other 35% “are now trying to come out of [the pandemic], rebuild inventories, and win back customer confidence,” he says.
His biggest concern has been drivers and how the loss of personal interaction brought on by Covid-19–related distancing protocols is affecting them. “They’re vital to the country,” Orr stresses. And while they are professionals and, in his view, clearly committed to what they do, “protecting them and being super-attuned to their needs and concerns has never been more important. Last week, I was out in the yard [at CFI’s Joplin, Missouri, office] and had no less than a half-dozen drivers walk up to me and want to talk. They’re out on the road seven to 10 days [at a time], and they miss that personal connection, seeing a friendly face.”
At the end of the day, “the pandemic has placed focus on what our individual actions mean not only to our own safety but to the safety of others around us as well,” comments Darren Hawkins, president and chief executive officer of LTL carrier YRC Worldwide. “We have entered an era where, more than ever, personal responsibility [for safety] is front and center.”
Concludes Hawkins: “The collective power of a society that is more aware of its surroundings, more prepared to act safely, and committed to acting in the best and safest interest of everyone is the promise of a better future for us all.”
Gartner, Inc.