Once recession-proof, US trucking is squeezed by coronavirus
Lockdowns to stem the spread of COVID-19 are reducing loads for truckers as well as the rates they are paid.
Faisal has been on the road for three weeks. A Palestinian immigrant and professional truck driver, he has driven his 16-wheeler all over the United States; from his home in North Carolina to Arizona, Pennsylvania, New Jersey, and up to the Canadian border. This has been his life ever since he became a trucker in 2002, earning enough from hauling goods to support his family. But since the coronavirus pandemic hit US shores, Faisal is barely breaking even.
“In the first week of my trip, the rates were much better than the second and third weeks; there’s been a big drop off,” he told Al Jazeera.
Faisal, who asked Al Jazeera to withhold his surname, is not the only truck driver feeling the squeeze as lockdowns around the US to stem the spread of coronavirus reduce the number of available trucking jobs and lower rates. “If it gets any worse than this, I don’t know if the brokers are going to find anyone to take their loads,” he said.
Faisal believes if this situation continues, it could financially devastate him and many of his fellow drivers, and lead to fewer trucks on the road.
“I delivered my load to Arizona at 5 in the morning, I stayed the whole day looking for a load, and I couldn’t find one,” he said. “It wasn’t until the next day that I found one; the truck stop and the side roads were full of truckers unable to get loads. It’s very unusual.”
Trucking is supposed to be a recession-proof industry. But the coronavirus pandemic, and the economic downturn that is accompanying it, is rewriting the rules. According to DAT Freight & Analytics, the largest online freight marketplace in North America, despite a brief bump in March, the number of loads available for truckers has plummeted 32.5 percent since January.
Making matters worse, the rates they are being paid have decreased an average of more than 8 percent. This means that not only is it much harder for many truckers to find loads, even if they do, it might not pay enough to make the trip worthwhile.
The American Trucking Association, the country’s largest trucking industry trade association, is now warning that trucking companies will be forced to lay off drivers, further adding to the US’s huge unemployment numbers. But the country’s army of independent owner-operators, believed to number approximately 350,000, are arguably in an even worse position.
“As far as owner-operators go, there’s a particular issue with the economic side, because their margins are so narrow, to begin with,” Norita Taylor, director of PR at the Owner-Operator Independent Drivers Association (OOIDR), told Al Jazeera. “With freight rates taking a nosedive recently, that’s particularly hard. Business has cut back, and if there are no loads to haul, there’s no money to make.”
The problems facing truckers are juxtaposed with the profession’s vital importance in ensuring that the few remaining active parts of the US economy are kept supplied, and grocery stores are well-stocked. An appreciative public has taken to thanking truckers for continuing to work, despite the risks, but at the same time, most truckers do not get paid time off or sick leave.
Truckers are often in coronavirus high-risk categories – more than twice as likely as the average American to be obese, more than twice as likely to smoke, and generally older than average. On top of that, 38 percent of truckers do not have health insurance.
“There’s no one to take care of you when you’re on your own driving,” said Faisal. “You’ll cross paths with others multiple times a day. I’m worried that if I get the coronavirus, I won’t have an income. Usually, truckers don’t have much savings. I had surgery last year, and I had to rush back to work because not working was impacting me financially.”
Those worries are shared by the OOIDR. They want more COVID-19 testing for drivers, and protective equipment at weigh stations and rest areas.
They have taken those concerns to the federal government. They have also requested that the government waive the payment of some taxes and fees this year, such as the Heavy Vehicle Use Tax, and the Unified Carrier Registration fee. On a more fundamental level, they also want to ensure that shippers and receivers allow truckers to use restroom facilities, which has stopped in some places, as a result of the outbreak.
brokers are going to find anyone to take their loads.”]
“It would have been nice if the recent stimulus would have been beneficial for truckers as far as the small business administration loans, or the payment protection program,” said Taylor. “But what we’re running into is that those funds have already run out, and navigating the system for applying leaves a lot of confusion as far as the process and how to qualify, as well as getting access to those funds.”
Those measures might provide some respite for truckers and the trucking industry but, as in much of the rest of the economy, it is clear that the difficulty will last as long as the coronavirus pandemic hangs over the country, with a pick-up hopefully occurring once the health crisis starts to clear.
“Assuming no recurrence of the pandemic once contained, we expect the second quarter to be the worst period. We might even lose some sizable motor carriers as well as numerous small carriers,” Avery Vise, FTR’s vice president of trucking, told Al Jazeera. “After that, we should see some stabilisation and the beginnings of a rebound in the third quarter … but we would not anticipate the level of freight volume in trucking to return to pre-crisis levels until early 2021.”
“Everyone understands that we are not in a typical recession that has an uncertain recovery period,” Vise added. “The restart phase might be rocky if stay-at-home orders drag through May, but everyone expects a much faster recovery than we saw in the Great Recession.”
That would be welcome news to Faisal, who will only have a brief period back home before hitting the road again. But if the economic crisis does drag on, he thinks it will become impossible to carry on.
“There are rates being offered now that pay less than what the fuel will cost,” Faisal said. “It costs me $1,100 a month just for insurance, and then there’s payments and maintenance too. You have to make enough money to sustain all of that, and with these rates, it’s not viable.”