Transportation organizations and private fleets found new ways to cope with the major challenges thrown at them in 2020, particularly by the COVID-19 pandemic.
While each has their own set of unique challenges specific to their organizations, for-hire and private carriers battle ways to deal with a difficult financial climate, rising costs from adapting to new routes and health concerns, and overall shrinking margins and bottom lines.
For transportation fleets, issues like rising insurance costs are now impacting the bottom line and are a growing concern. Increased tonnage means more miles and stress are aging trucks at an increasing pace. Case in point, the American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 6.7% in September after a handful of volatile months’ worth of activity.
Meanwhile, private fleets are facing specific challenges as well. Depending on the industry, companies with private fleets have had to rapidly adjust to changing market conditions, adapt to new routes and scale fleets quickly to align new economic realities with the changing market.
Changing utilization driving changing truck needs
According to a recent industry survey, 36% of companies had to change routes for as many as 40% of the trucks in their fleets, and 25% have had to change what their trucks are primarily hauling. Much of this shift was a result of the closing of many restaurants across the country, with fleets shifting their routes to handle increased demand for grocery items and retail/merchandise (non-food) delivery.
The survey also illustrated that roughly 50% of respondents used less than 30% of the typical miles accumulated in routes when the pandemic hit. This also meant that roughly four of every ten fleets were operating at 80% of normal utilization. As a result, along with the broader impact from the economy, 27% of organizations said they were forced to downsize their fleets.
