Truckers answer the bell to keep the economy moving during pandemic
Essential freight needed delivery. Challenges and obstacles arose from all sides. Trucking operators responded with quiet determination—and the formidable dedication of selfless drivers—to keep goods flowing.
Gary Frantz is a contributing editor for DC Velocity and its sister publication CSCMP's Supply Chain Quarterly, and a veteran communications executive with more than 30 years of experience in the transportation and logistics industries. He's served as communications director and strategic media relations counselor for companies including XPO Logistics, Con-way, Menlo Logistics, GT Nexus, Circle International Group, and Consolidated Freightways. Gary is currently principal of GNF Communications LLC, a consultancy providing freelance writing, editorial and media strategy services. He's a proud graduate of the Journalism program at California State University–Chico.
Motor carriers have been whipsawed by the pandemic. Yet through perseverance, grit, and savvy, they have managed to keep the trucks running and employees safe, making essential deliveries to support millions of stay-at-home families and an economy struggling to find new footing.
Dave Bates, senior vice president of operations for Thomasville, North Carolina-based Old Dominion Freight Line (ODFL), has dealt with hurricanes, floods, tornadoes, strikes, recessions, and numerous other disruptions during his 33 years in the trucking industry. “This is by far the most challenging environment we have ever had to operate in,” he observes.
The less-than-truckload (LTL) carrier saw an immediate 20% drop in shipments when the pandemic hit in late March and raged across the country in April. May saw a nearly 17% drop, he notes. Some segments of the business fell off a cliff, while others rebounded relatively quickly. “We are heavy into food supplies and medical products as part of our normal [mix]. That picked up for us,” Bates recalls. “It was the [small business] mom-and-pop type freight where we saw it dry up because they were not able to be open.”
With the onset of the pandemic and its initial impact on volumes, ODFL, which on average handles some 120,000 LTL shipments daily, made an immediate decision to right-size its workforce. The company in April furloughed about 15% of its employees, in three phases, for 90 days—and kept their health benefits intact. “We knew at the beginning of the pandemic [the impact on the business] was not going to last long,” Bates notes. “We wanted them back, and we knew [conditions would change and] we were going to need them back at some point.”
Through it all, service levels remained consistent across ODFL’s network of 238 service centers, which, Bates says, is a testament to ODFL’s nonunion workforce. “None of this would be possible without our employees stepping up and doing what was needed. I could not be prouder of our team and what they’ve done to get us through,” he says, adding, “I hope we never have to go through this again.”
TURNING THE BUSINESS ON ITS HEAD
At Richmond, Virginia-based Estes Express Lines, a purposeful shift several years ago to increase its presence in the burgeoning e-commerce, omnichannel, and last-mile segments helped blunt the downside business impact of the pandemic, says Pat Martin, vice president of corporate sales and strategic planning.
“Delivering [e-commerce purchases] last-mile to homes and helping businesses [and fulfillment centers] restock, that’s what’s driving the market right now,” he notes. Consumers relegated to being at home have doubled down on projects, ordering “everything from basketball hoops to hot tubs, pool and yard supplies, and patio furniture—anything to fix up the house.”
Traditional business expectations and operating assumptions have been turned on their head. “Parts of the economy have never been better, and other parts have never been worse,” Martin notes. “The market is simply crazy right now; it just depends on what your mix of business is.” While Estes saw business fall off in April and May, June and July have seen a recovery, to the point where the company has begun aggressively managing capacity. “We’re not bringing on a lot of new business right now; [we’re focused on] taking care of our existing book of business,” he says.
ALL HANDS ON DECK
For Memphis, Tennessee-based FedEx Freight, at the outset of the pandemic, figuring out who was closed and who could still accept deliveries became an immediate challenge, recalls Lance Moll, senior vice president of operations. “We called 24,000 customers prior to attempting delivery to confirm whether or not they were open,” he says.
It was a critical time where essential freight still had to be delivered where it was most needed. The company responded with an “all hands on deck” approach, proactively reaching out to shippers to confirm operating hours and set specific pickup and dropoff times. Drivers were equipped with protective gear. Cleaning and disinfecting routines were implemented for offices and trucks. Protocols were adopted to limit close contact between drivers and shippers. Signature requirements were suspended to help maintain proper social distancing.
At the same time, exploding e-commerce volumes accelerated use of the company’s FedEx Freight Direct service, which provides home delivery of heavy, bulky items, such as fitness gear, outdoor furniture, and sewing cabinets. The service, which had been growing at a decent clip prior to the pandemic, really took off as homebound consumers began ordering more oversized items from online retailers. “The pandemic continues to drive unprecedented volumes, and we have managed our linehaul model to align with current demand,” Moll notes.
AGILITY TO THE FOREFRONT
With market disruption and a clouded view of the future, fleets are placing a premium on flexibility and agility. One example is St. Louis-based CPC Logistics, which provides CDL (commercial driver’s license)-qualified drivers to private fleets and other dedicated needs. It is one “leg” of a three-legged trucking operations stool: CPC manages all aspects of driver recruiting and deployment, the manufacturing or retailing business (such as a pharmacy, automotive aftermarket, or consumer products concern) does network and route planning, and a third party provides the rolling-stock equipment and maintenance.
This “unbundled dedicated” model flexed with the pandemic, such that “we were able to move drivers from one area or customer to another who saw higher demand and needed more capacity,” notes Dan Most, CPC Logistics’ vice president of safety and operations. “That met the customer’s volume need while making sure the driver had the opportunity to work and continue earning a paycheck.” CPC Logistics has about 3,000 full-time drivers assigned to its clients.
TUNING IN TO DRIVERS
On the truckload side of the business, carriers report a similar story. Freight disappeared in late March and early April, then began a slow but determined rebound. “People are refocused. There’s hardly any inventory,” notes Greg Orr, executive vice president of U.S. truckload for Canada-based trucking conglomerate TFI International. “A lot of catch-up is happening with supply chains right now.”
Orr’s management portfolio includes the operations of TFI truckload subsidiaries CFI and Transport America. He’s observed that currently, some 65% of their customers are seeing solid, steady volumes. The other 35% “are now trying to come out of [the pandemic], rebuild inventories, and win back customer confidence,” he says.
His biggest concern has been drivers and how the loss of personal interaction brought on by Covid-19–related distancing protocols is affecting them. “They’re vital to the country,” Orr stresses. And while they are professionals and, in his view, clearly committed to what they do, “protecting them and being super-attuned to their needs and concerns has never been more important. Last week, I was out in the yard [at CFI’s Joplin, Missouri, office] and had no less than a half-dozen drivers walk up to me and want to talk. They’re out on the road seven to 10 days [at a time], and they miss that personal connection, seeing a friendly face.”
At the end of the day, “the pandemic has placed focus on what our individual actions mean not only to our own safety but to the safety of others around us as well,” comments Darren Hawkins, president and chief executive officer of LTL carrier YRC Worldwide. “We have entered an era where, more than ever, personal responsibility [for safety] is front and center.”
Concludes Hawkins: “The collective power of a society that is more aware of its surroundings, more prepared to act safely, and committed to acting in the best and safest interest of everyone is the promise of a better future for us all.”
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.