Small fleets struggle as freight levels continue nosedive

user-gravatar
Screen Shot 2020-04-21 at 8.24.29 AM-2020-04-21-08-24

Owner-operator freight demand pie charts

Fleets with under 10 trucks reported a continuing downward spiral of freight demand last week, based on Overdrive‘s weekly survey of readers on the impact of COVID-19. Some are laying off drivers and most expect no relief any time soon.

Those who’d experienced falling freight demand totaled 82%, the highest yet recorded in the survey. Of that group, 59% rated it “decreased significantly,” also a record high.

Comments from many respondents cited absurdly low rates, which they blamed on brokers.

“Brokers are gouging and pocketing half the shipping rate and telling carriers the rates have dropped. Rates have NOT dropped, they have actually gone up. Some brokers just think it’s OK to steal from truckers,” wrote one respondent.

“Loads I got for $1850 3 weeks ago, now they only want to pay $1300. What the hell are these brokers doing?” wrote another.

What changes have you made to your business in response to the coronavirus responsesAbout one in five respondents in each of the survey’s four weeks say they’ve laid off drivers. The most severe shedding occurred in the Northeast. In New England, 31% of respondents said they’d reduced their driver workforce. In the Middle Atlantic states of New Jersey, New York, Pennsylvania, that figure was 41%.

The recent survey received responses from readers of Overdrive and Commercial Carrier Journal over April 15-19. Nine out of 10 of the 369 respondents were owner-operators with their own authority, most with one to five trucks. The other 10% were leased operators.

Those expecting freight levels to decrease in the next 30 days totaled 58%. A potential bright spot, however dim, is the trend on this question, which shows those pessimistic expectations falling twice from the 69% recorded two weeks ago.

Comments regarding the near future of freight ranged from bleak to guarded optimism:

  • “It will decrease until stay in place is lifted.”
  • “I don’t believe it can get much worse.”
  • “Warehouses are full of stock, demand will be down due to many closed businesses.”
  • “Freight is finally coming in to distribution centers.”
  • “I think the pandemic is gonna get worse and shut most of trucks down also.”
  • “No one knows until they open the gates, and then it’s going to take time to rebound!”
Many respondents to Overdrive’s poll believe brokers are making matters worse by taking advantage of falling freight rates.Many respondents to Overdrive’s poll believe brokers are making matters worse by taking advantage of falling freight rates.

A month after the coronavirus threat threw much of the economy into lockdown, the survey shows some corners of trucking continue to prosper. Freight “increased” or “increased significantly” in the past week, said 6% of respondents. Another 12% said freight had remained stable. Over the next month, freight will increase or stay the same, 42% believe.

Only 2% of respondents said they had added drivers. However, responding to a list of survival tactics related to the COVID-19 impact, such as laying off employees or canceling equipment orders, almost one in three said they had taken none of those measures.

The Business Manual for Owner-Operators
Overdrive editors and ATBS present the industry’s best manual for prospective and committed owner-operators. You’ll find exceptional depth on many issues in the 2021 edition of Partners in Business.
Download
Partners in Business Issue Cover