The U.S. freight and trucking industry have coped relatively well with the short-term disruptions posed by the COVID-19 pandemic. Now, most companies are pondering the long-term effects and what the future holds for them. How will the transition from this crisis to the next normal take place?
Since the 1990s, freight intensity had seen a decline until the recession of 2009, when it stabilized. So, the economy has been shifting away from heavy industry and goods to items that require lighter manufacturing and services. Let us look at the COVID-19 recovery plan for the trucking industry in this article.
Short-term Recovery Plan:
In the short term, trucking leadership needs to plan highly agile and effective operations to respond to the rapidly changing market conditions. For instance, sudden changes in freight price rates demand a thorough look at the real-time supply and demand so you can maximize the profit margins.
Trucking owner-operators should consider utilizing smaller underutilized carriers. They should also agree to new upfront volume discounts to increase their operations.
Trucking companies need to reduce their drive costs to a minimum. This means that all kinds of discretionary spending, road haulage, and off-the-shelf technology solutions that improve business processes need to be controlled.
Manufacturers should have up-to-date knowledge on the viability of their customers and carriers, as they can face financial challenges. Transportation providers need money to run their operations. They need to make effective decisions on who to work for and whom to let go. They can also decide on shortening the terms with some customers as per their requirements.
In the post-COVID-19 world, transportation providers must develop and execute new strategies. These strategies will focus on six critical measures explained below:
Grow Beyond Local Operations:
Most transporters operate as local agents but to increase their value; they need to expand their operations. They need to handle the entire process for inbound transport from departure to end customer.
Another area transportation companies need to focus on is stabilizing their market position. Companies that remain resolute and focused in their response will best survive after the pandemic.
Transporters within the trucking industries need to widen their networks within the industry. This will help them establish themselves as trusted and renowned specialists.
Identify Profitable Trade Lanes And Markets:
To get the most output from your services, you need to identify the most profitable trade lanes and markets. This will diversify and increase your operations. If you operate on these lanes, you will get the best rates and discounts from carriers.
Work With Governments:
As a transportation services provider, your goal should be to support the government in reshaping infrastructure and processes.
Strategize And Identify Opportunities:
This is the time to identify attractive trade lanes and target markets, and increase volumes and assets. Identifying the current opportunities will help you get a competitive advantage.
Heavily Invest In Technology:
Technology-based leaps are essential for transportation organizations. Companies that have already adopted innovative technologies have proven their worth in the industry. It is time to apply such technologies and strategies and learn from such examples.
Q1- What kind of challenges has the pandemic posed on the trucking industry?
- Land transport has taken a hitClosed Borders has decreased volumes
- Workforce and labor shortage is another problem.
- Lack of strategies and contingency plans has further worsened the situation.
Q2- Is there a positive impact on the trucking industry due to the pandemic?
Due to lockdown in many countries, the freight segment has experienced mixed short-term effects. There is a rise in demand for truck drivers to transport essential goods. For example, a 40% to 60% increase in products being moved into grocery stores and warehouses since COVID started.
The article explains some notable points and ideas about COVID-19 recovery plan for the trucking industry. Companies that will plan and execute strategies in both short and long terms will successfully come out of the pandemic.
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