[Ensure you have all the info you need in these unprecedented times. Subscribe now.]
According to panelists at the SMC³ Jump Start 2021 conference on Jan. 27, trucking has already returned to pre-pandemic norms in many ways, but there are still problems – including capacity – that are lagging behind.
Much of the industry has trailed back to where it was before the pandemic, such as freight activity, while many don’t like capacity.
“In November, we were back to a tonne-mile basis we were on in 2019,” said Jason Miller, associate professor of logistics at Michigan State University. “November is generally a lower mileage month as we enter the winter period. We also have the holiday season. “
Miller based his observations on an index his department created to estimate the mileage for truck tons. It examines various government data and examines sectors that generate cargo.
“We can see that activity was essentially down nearly 15% when the COVID-19 pandemic hit,” Miller said. “It increased a bit in May, but then we have this huge increase in June. From then until October we have ascended slowly but surely and roughly linearly. “
The activity Miller added is essentially the same as last year, with the caveat that November, December, January and February tend to be less volume months for tonne-kilometers. General activity may not have returned to normal and the real question is where will the trucking take place in the spring.
“The natural answer, then, is why spot prices are so high. Why did it feel like capacity was running out? “Said Miller. “And the answer is because employment has recovered far less aggressively.”
Miller said the index showed that activity was well above employment in the few years leading up to the pandemic, indicating that capacity is scarce. But when the pandemic hit, employment fell about 7% and demand fell even further at 15%. However, this began to be reversed as freight activities recovered faster.
“Many of you probably felt that the market was changing very quickly towards the end of June,” Miller said. “The June values were roughly the same, so the indices indicate neutrality. Then we have a sharp surge in demand as the reopening takes place. However, the capacity is not switched back online proportionally. “
The FTR freight forecast data has shown a similar trend when it comes to volume recovery, but capacity remains an issue.
Avery Vise, vice president of truck research at FTR, told the conference that his organization’s upcoming monthly data will generally be even stronger.
“The title of the session is that we forecast a return to pre-pandemic levels and basically we are there,” Vise said. “We believe the total volume will be there this quarter. If we look at capacity utilization and rates, we are more than pre-pandemic levels. “
Vise also said that if the pandemic is under control more quickly, it will likely have a positive impact on capacity, which means that the course of the pandemic itself will play a big role in the further recovery of the freight transport sector.
“We had an extraordinary upswing [third quarter] Overall, that brought us back to pre-pandemic levels, ”said Vise. “We’re basically back and if you look at the van stores, the dry van and the refrigerated van, we were back last year [fourth quarter]. ”
Vise added that the heavy haulage and industrial sectors are not quite there yet and it will likely be months before they fully recover.
Do you want more news? Listen to today’s daily briefing: