Note: this article was originally published in March 2020 by TopMark Funding. Some information may be outdated as society learned more about the coronavirus pandemic.
There is no denying that coronavirus (COVID-19) hysteria has swept the nation. We at Topmark Funding even wrote an article about how to keep yourself from catching and spreading coronavirus. There was a lot of uncertainty regarding how the coronavirus would impact the trucking industry in the United States of America. As time goes on, truckers are finding more work and opportunities to generate revenue, not less.
Supply and Demand of Toilet Paper
With people reacting (or overreacting) to the news about coronavirus, customers are making runs of big box stores and internet retailers alike for emergency supplies such as toilet paper, dry foods, and hand sanitizer/wipes. With demand outpacing supply as hoarders try to prepare for the worst-case scenario, truckers are needed more than ever to deliver supplies by the truckload to retailers.
The Outbound Tender Volume Index (OTVI), which measures the amount of goods being shipped via truck at any given time and has a base value of ten thousand, is currently hovering around 10,800. This is easily the highest March since the Index started tracking in 2018. It is reaching peaks normally found during the holiday season and busy summers.
Truckers had reasonable suspicion to think, with the coronavirus starting in China, that there would be less freight than normal, but it appears the opposite has happened instead. Normally, China accounts for 22% of US imports, but the increased demand for other products not commonly made in China, such as toilet paper, have been more than able to offset any current decreases in imports from Asia.
Conclusion
The longer that the coronavirus lingers in the news, the more its effects will be seen.
Will an increase in coronavirus infections in China reduce the number of shipments across the Pacific Ocean? What about shipments from other countries as they start tracking infection rates? Will people stop buying toilet paper once they have hoarded their share, meaning the trucking industry is simply “loaning” demand for such products from the future?
Only time will tell, but for the time being it appears that the demand for common household supplies is benefitting all truckers, not just those with established contracted routes with large companies such as Costco.
It will be interesting to eventually see what the DAT finds for the national average rates per mile for March in regards to dry van, flatbed, and reefer trailers. The increase in demand, combined with the lack of supply for which retailers need to keep up, implies that trucking rates should be extremely high by March standards, or about average for the year as a whole.
For the time being, it pays to keep on trucking. Just remember that it is imperative to always wear gloves when using the diesel pump.
