Summer 2020 Transport Trends

Here are top trends shippers should be keep an eye on this summer

A year filled with uncertainty and anticipation about what “could happen,” 2020 has so far proven to be pretty unpredictable. With some organizations emerging from the impacts of COVID and others entering new lockdowns due to a renewed threat, Odyssey Logistics & Technology found some of the top trends shippers should be thinking about this summer.

Here’s what we learned:

1. The economy could remain in flux until next year

The US economy might not return to pre-COVID pandemic levels until mid-2021, signaling the slow recovery ahead for US surface freight volume, according to JOC, highlighting a recent American Trucking Associations (ATA) report. “The worst is likely behind us,” according to ATA, “but even stronger numbers in the last six months will be unable to make up for what the Congressional Budget Office, Federal Reserve, and several investment banks project to be at least a 30 percent annualized decline in economic output in the second quarter.

2. The truck driver shortage is dormant, at least for now 

A 20-year scarcity in drivers, which ATA says topped 60,000 in 2019, has disappeared. That’s due to shipper shutdowns and the fact that not as much freight has moved in the last three months. JOC says that the underlying causes of the shortage, however, such as the aging driver, gender imbalance, and stringent drug and alcohol standards, have not gone away. “The reason why it’s gone away temporarily is because freight demand really fell out like we saw during the Great Recession. But it could come back even worse with so many drivers leaving the industry during the current recession,” the ATA reports.

3. Logistics automation is taking off

Whether it’s being driven by the need for social distancing in the workplace, the fact that some workers remain reluctant to go back to work, or simply an overall push to automate (which was underway pre-COVID), demand for automated warehousing and fulfillment solutions is on the rise. “Technology is changing the nature of many warehouse jobs. It often reduces physical demands,” InboundLogistics points out.  Going a step further, some automation vendors are blending the dexterity and flexibility of humans with the speed and ability of machines—a trend that could help companies better fuse their human labor with the many different automated options on the market today.

4. FMCSA cancels HOS exemption for food, fuel, raw materials

The Federal Motor Carrier Safety Administration (FMCSA) has extended its national emergency exemption for hours of service (HOS) to July 14, but has excluded grocery restocking, fuel, and precursor raw materials from the extension. FreightWaves reports that the latest extension, effective beginning June 15, is limited to just three categories of freight moved in support of emergency relief efforts related to COVID-19. They are:

  1. Livestock and livestock feed
  2. Medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19
  3. Supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap, and disinfectants.

5. The USMCA is now in full force, and with no transition period

The United States-Mexico-Canada Agreement (USMCA) went into effect July 1[BM1] , effectively replacing the 26-year-old North American Free Trade Agreement (NAFTA). Under discussion for several years, these new trade agreements introduce new import and export rules, new frustrations, and a few new acronyms for shippers to learn. There’s no transition period between NAFTA and these three new agreements, so shippers involved with cross-border trade in the U.S., Canada, and Mexico will need to get up to speed quickly on the new rules.   

6. Truck tonnage is trending downward, but spot rates are slowly rebounding

The ATA’s advanced SA For-Hire Truck Tonnage Index for May—at 106.1 (2015=100)—was down 1% in May, following a 10.3% (downwardly revised from -12.2%) April decrease, which came in at 107.2, according to Logistics Management. By June, DAT was tracking truckload spot market rates gains for the week of June 22, and reported that posted loads headed up 15.6%, following a slower trajectory the previous week, with spot van and refrigerated rates regaining momentum that had been building up in previous weeks. “It’s good to see things recover on the reefer and dry van side to pre-COVID-19 levels, where we were sitting before,” a DAT spokesperson told Logistics Management. “What will be interesting to see is how bullish retailers and wholesalers are heading into the fall season. I think that will play a lot into what the rate picture looks like over the third and fourth quarter.”

7.  Shippers are leveraging tech to assess COVID risks

To help its customers manage the volatility of this global crisis, Odyssey Logistics & Technology has developed and released an interactive technology platform for its North America Managed Logistics (MLS) customers. The platform provides visibility into shipments that overlay with geography profiles that present risk; including: COVID-19 hotspots and transportation embargoes. Odyssey customers get actionable data to assess their supply chain risks created by embargoed transportation hotspots—allowing them to act quickly and minimize the operational, economic, and safety impacts of these service disruptions.

Odyssey is continuing to monitor the current events closely in order to make the best possible supply chain and transportation decisions during this difficult time. We will continue to monitor the impacts and provide you with updates as they are available.

For additional insight connect with one of our experts today.