Earlier today, through our industry involvement, we received several updates as it relates to the movement of freight during the COVID-19 crisis. Below are a few items we think may be of most interest to you.

Grounded Flights are Impacting Air Cargo Capacity

Due to the reduction in international flights, the volume of trans-Atlantic air freight is expected to be down by approximately 25 fully-loaded Boeing 777’s per day.

The Transportation Security Administration (TSA) reported, as of this week, the number of passenger screenings are 83% lower than the same time last year. Domestic air carriers are preparing for a shutdown, or near-shutdown, due to demand and difficulty filling crews. Case in point: a large airline reported that 95% of their international flights are grounded. This will impact the movement of freight, as about 60% of Atlantic air cargo is transported by passenger planes.

Updated on 3/26/20: Airlines have begun shifting their efforts to meet air cargo demand. For the most up-to-date information, visit the International Air Transport Association's website.

Concerns Rise Around U.S. Driver Capacity as China’s Production Ramps Up

China is at about 85% production capacity, and ramping up. Crossing the Pacific by ship is approximately a 14-day journey, so drivers who are looking to move freight in Southern California will need to wait another two weeks (plus the typical 30-day turnaround time for receivables to be collected). With over 80% of drivers serving the ports being owner-operators, concern is mounting that they are not capitalized enough to last the 45 days, which could cause a significant shortage at the ports. We expect that when freight begins flooding in from China, freight and pricing will have a “peak season” feel. Those of us who pay carriers and need capacity should ensure we don’t stretch out payment terms for truckers in this hour of need. In fact, speeding up payment now — at least temporarily — will ensure they’re there when we need them to be, and may save us blown transportation budgets when freight begins moving again. Otherwise, we risk a return to the 2018 freight rate environment.

A Few Quick Facts on Trucking Today

• Current truck pricing is above 2019 rates recently, primarily due to the grocery replenishment push.
• U.S./Canada and U.S./Mexico cross-border trucking is moving at faster-than-normal speeds due to the shutdown of passenger traffic.
• A large truckload carrier has indicated that its drivers interact with 1.8 people per day, placing themselves at risk. Drivers continue to drive and support the nation’s efforts.