No washrooms, no diners, no one in warehouse receiving departments at the end of the road.
Truckers working North America’s West Coast hit a lot of speed bumps when the COVID-19 curtain fell on the North American economy in March.
Some have been removed, but many remain for drivers servicing the key last-mile supply chain link that moves products to local businesses through ports and the rest of the Asia Pacific Gateway. And the outlook for the next couple of months is not good.
“There isn’t any optimism,” said Dave Earle, president and CEO of the BC Trucking Association (BCTA), in describing the business outlook from his organization’s membership.
“There is not one person that responded to our survey that indicated that they thought it was going to get better in the short term – not one. Everybody thinks it is going to get markedly worse.”
Down south at North America’s largest container port complex, the outlook is not much brighter.
“We fear that the next six weeks are going to be very bleak, to say the least,” said Weston LaBar, CEO of the Harbour Trucking Association, which represents the 1,800 registered trucking companies that service the ports of Los Angeles and Long Beach.
Their views are not surprising.
The trucking industry is at the tail end of supply chains that bring goods from around the world to North America.
As such, it will feel the real pain of the global pandemic’s catastrophic impact on the world’s economy later than container terminals and container shipping lines.
The latter two are already facing serious slowdowns after moving the bulk of freight ordered and shipped prior to the COVID-19 outbreak and the subsequent institution of lockdowns and border closures.
Cargo shipped through the Port of Long Beach in March, for example, was down 6.4% compared with the same month in 2019.
Ocean carriers, meanwhile, are facing major financial challenges.
They have cancelled hundreds of sailings thus far in 2020 as trade between Asia and North America slows dramatically and the global economic outlook darkens.
The World Trade Organization has projected world trade to fall by between 13% and 32% in 2020.
Either prospect could be life threatening for container shipping lines.
“This might very well have an impact of the same magnitude as the financial crisis, which led to a 10% global decline in volumes in 2009,” Lars Jensen, CEO of Denmark’s Sea Intelligence Consulting, told Business in Vancouver. “Before the virus outbreak in China, followed by the pandemic spread, the outlook was for between 2% and 4% demand growth in 2020.”
For truckers in California and B.C., COVID-19’s collateral damage has thus far been focused on more ground-level issues.
In the United States, complications include a warehousing space shortage that has been worsened by warehouse closures as pandemic lockdowns cut employee ranks to skeleton staff and shippers scramble to find space to store stranded inventory. A glut of empty containers that are no longer being shipped back to Asia and need to be stored somewhere has added to the space crunch.
Truckers are consequently arriving at warehouses that are closed, have limited public access or no available storage space.
Uncertainty abounds.
In a COVID-19 logistics update in early April, Chandrakant Kanoria, head of network operations for Flexport, which helps businesses with freight movement and financing, said many third-party logistics operators (3PLs) are shutting down their operations, “and this is happening when goods are in transit. So we have heard of examples where customers’ warehouses have shut down or 3PLs have shut down, and they don’t know where to store their goods. Sometimes warehouses shut down and truckers don’t know whether they can deliver, and a lot of truckers are coming back because they can’t drop products.”
Earle said B.C. truckers face similar but lesser warehouse-access issues because the province’s market is far smaller than California’s.
However, with the widespread closure of restaurant chains, cafes and other businesses that cater to travellers, immediate challenges are more basic.
“If you had told me a year ago that my top three priorities would be bathrooms, sandwiches and [hand] sanitizer, I would have said you are crazy,” Earle said. “But really that was it. That was what we were doing to try to keep the wheels turning.”
Several major restaurant chains are helping keep those wheels turning.
Earle said McDonald’s (NYSE: MCD), Restaurants Brands International (TSX:QSR) and A&W were first out of the gate to establish protocols to serve truckers as walk-up customers or as commercial clients exclusively at outlets that are now closed to the public. Swiss Chalet and Harvey’s have since joined the initiative.
In partnership with the Meals for Truck Drivers group, the BCTA has also organized food trucks to service card-lock fuelling stations and other locations where truckers stop.
Support for the initiative is growing.
“We are having a huge uptake on sponsorship,” said Earle.
He added that food truck locations are now operating in the Lower Mainland and near Kamloops, Kelowna and Prince George.
Procedures aimed at preventing the spread of COVID-19 in North America’s West Coast trucking sector include reducing as much as possible the interaction between drivers and warehouse and port workers.
For example, most Los Angeles-Long Beach port complex container terminals now use paperless transactions, and LaBar said those that don’t have eliminated the need for drivers to hand over ID at terminal gates and have instituted other non-invasive ways to share information between drivers and terminal workers.
While B.C. truckers who regularly cross the Canada-U.S. border are not required to file self-isolation plans, Earle said all truckers must self-monitor. They must also declare any COVID-19 symptoms and self-isolate if they become ill.
Thus far truckers in California and B.C. have managed, for the most part, to avoid infection.
LaBar said his membership has reported no cases of drivers testing positive for the virus; Earle said he knew of only one case in Canada.
But COVID-19 promises to change port operations permanently.
For example, it will likely accelerate port terminal automation.
“Robots can get a computer virus, but they can’t get a coronavirus,” said LaBar.
He added that automated terminals have a significantly lower level of driver and terminal worker interaction.
Integrated information sharing between terminals and truckers, auto in-gates and automated pre-logging of data mean that drivers don’t have to stop and get a work order or stop on the way out of terminals to hand over gate passes.
“It is all automated,” LaBar said. “So social distancing is easily done when you don’t have to have workers interact with one another.” •
@timothyrenshaw
