New coronavirus cases add uncertainty to truckload markets
There are new COVID-19 hotspots emerging this week, with new data showing that the first wave of virus outbreaks may not have ever ended – it’s just been one long wave. Data from the COVID Tracking Project shows the country has been averaging around 20,000 new cases and 1,000 deaths a day since March 1, but there’s some nuance in those numbers.
The hardest-hit states of New York and New Jersey account for 27% of cases and 37% of total deaths, but they’ve noticeably flattened their curves and are well into reopening. If their data is removed from the national total, the number of U.S. coronavirus cases has been holding steady or slightly increasing since March. The more alarming numbers are hospitalizations and deaths, which are both projected to increase in coming months according to CDC modeling forecasts.
This week we’re seeing reports of some states slowing their pace of reopening as new coronavirus cases climb in 22 states, with the Sun Belt or the southern tier of the country the most affected. It’s no coincidence that this region is where produce season is in full swing, with many new cases linked to farm workers. Since agriculture is classified as an essential service, health officials are not likely to shut down crop harvesting operations, so it’s not yet clear how this affects immediate truckload volumes.
If we follow recent Midwest meat-packing plants trends though, then labor shortages, reduced production and truck wait times are almost certain to follow. It is interesting to note that, of the top five coronavirus hot spots as measured by new coronavirus cases in the last two weeks, four of the five counties (Imperial, CA, Yuma, AZ, Yakima, WA and Durham, NC) are at the heart of major farming states, which account for 68% of total U.S. produce tonnage according to USDA data.
It’s clear we’ve got a long way to go towards economic recovery, with the truckload freight market already showing signs of being restructured. Using telematics data from their install base of two million commercial vehicles, Geotab reports that even though the daily volume of truck trips in the U.S. are down 11% this week compared to pre-shutdown baseline levels in February 2020, the number of daily fuel fill-up events are up (due to trucks running shorter trips with multiple stops at a lower mpg rate). Breaking the data down by truck type, the impact of the COVID-19 pandemic on consumer buying patterns is evident by the 60% increase in light duty vehicle trips involved primarily in final mile e-commerce deliveries.
Last Update: June 17, 2020