Across the state, trucking companies are currently reporting between a 10% to 15% drop in the number of loads being hauled across the state for April. That’s significant when the state’s trucking sector typically hauls about 80% of the freight that moves throughout Georgia in a year.
“Literally if it’s moved from point A to point B, it’s freight,” said Ed Crowell, president and CEO of the Georgia Motor Trucking Association.
“And if it’s freight, 80% of it came on trucks coming out of the ports in Savannah and in Brunswick, out of the kaolin mines, from carpet country, and from the produce suppliers in South Georgia,” he said.
Georgia, with its ports, highways and railroads, is a regional transportation and logistics hub. Shippers in every industry sector rely on the trucking industry to deliver $620 billion in cargo each year on 20,000 miles of highways and 1,200 miles of interstate highways including I-75, I-85, I-95 and I-20, according to the state Centers of Innovation. In 2018, the state’s trucking industry accounted for a whopping economic impact of $14.9 billion in combined direct and indirect sales.
Trucking employs nearly 266,000 people, or one out of every 14 jobs in the state, according to the GMTA. There are roughly 32,000 trucking companies in the state, primarily small, locally-owned businesses. But the state also is the headquarters for industry giants UPS Supply Chain Solutions and Saia Inc.
But those kinds of numbers can be tossed out the window for now, Crowell said. Although he had no specific figures or forecasts on how severely Georgia’s industry is wounded, he said it would be like most other states where 10% to 15% drops in business seems to be the current average.
Crowell said the truckers “who took it on the chin” were likely those who hauled finished goods like automobiles from the factory to the dealerships. Those jobs “almost disappeared overnight,” he said.
Fear of the uncertainty due to the pandemic led to what is called “panic buying” in mid-March when people dashed to grocery stores and stood in long lines to stock up on food, sanitizers and toilet paper. Shelves were picked clean of many staples and there was a brief bump in trucking business as carriers worked to fill orders from Kroger, Costco, Walmart and other retailers.
“After that initial [bump], things have calmed down and I think most people have seen their grocery stores being more steadily supplied,” he said.
In metro Atlanta, about 70% of all processed food shipments were going to restaurants, Crowell said. After the pandemic hit and restaurants were forced to close or only offer take out or delivery, about 70% of all processed foods were shipped to grocery stores. Most people were staying home and only making trips to the grocery store to buy enough food to cook for themselves. The need for industrial-sized soups or mixes vanished and the need for chickens cut into small thighs, breasts and legs replaced larger, restaurant-sized cuts.
“Almost overnight it became, ‘no, I don’t need a 50-pound bag of flour … I just need the 5-pound bag of flour to take home,’ ” Crowell said.
Many truckers were forced to grind to a halt in March when the Georgia Ports Authority closed its gates to trucks on Saturdays at the ports of Savannah and Brunswick after experiencing “a precipitous drop in imports” due to the coronavirus pandemic. The truck gate closures were extended through April for the Savannah port.
On April 2, Gov. Brian Kemp issued a month-long statewide shelter-in-place order that included the closing of non-essential businesses to try to slow the spread of Covid-19, the disease caused by the coronavirus. Unemployment claims in Georgia rocketed to more than 1.3 million. Social distancing mandates kept many people in their homes.
These events severely cut into consumer spending and created volatility in the marketplace. The unpredictability led Johns Creek-based Saia Inc. (Nasdaq: SAIA), one of the nation’s largest trucking companies, to cut pay for officers and directors by 5%, to defer annual pay raises and to suspend its 401(k) employer match indefinitely.
Fritz Holzgrefe, president and CEO of Saia Inc., said in an April 29 financial report that despite a strong start in March, first quarter results “were marked by shipment volatility” and the company “experienced a quick and meaningful downturn in business volumes across our network, as a result of the Covid-19 pandemic.”
Robert Pierson is vice president of recruiting for Brown Integrated Logistics, a trucking company in Lithonia. He said the trucking industry is in “unchartered territory.” During the 2008 recession there were trends that could be studied to determine next steps, but the coronavirus pandemic is too unpredictable to know what to do.
“The uncertainty in this industry is really the hardest challenge,” he said.
“When you talk to any business leader — and as much as some people like to get political, it doesn’t matter if it’s a Democrat or Republican in office — a lot of times for most businesses they kind of want to have an idea of, OK, well, what’s coming next?” Pierson said.
“A business can adjust and adapt to whatever’s coming next even if they may not like it,” he said. “The challenge right now is how do you adapt to something that you don’t quite know what’s coming next.”
There are a few bright spots, though. Fleets and drivers are being celebrated in communities and by local and national media for their work to get critical medical supplies to hospitals and pharmacies.
“One thing I’d want people to remember is what the industry has been doing for them during this time,” said Crowell of the GMTA.
“Truckers honestly don’t get much appreciation because normally they do their job so well and so seamlessly, nobody notices,” he said.
Until now, for example, people have not gone into a grocery store and worried they were not going to be able to buy an item they needed, he said.
“There’s a tendency for people to forget as soon as an emergency is over, to forget who took care of them,” he said. “I hope people remember [truck drivers] had their backs and are still out there working every day.”
Georgia’s top 10 transportation companies by estimated sales:
- Americold Logistics LLC, 10 Glenlake Pkwy., Sandy Springs
- Capstone Logistics LLC, 30 Technology Pkwy., Norcross
- National DCP LLC, 3805 Crestwood Pkwy. NW, Duluth
- Saia LTL Freight, 11465 Johns Creek Pkwy., Duluth
- UPS Supply Chain Solutions, 12380 Morris Road, Alpharetta
- Brown Trucking Co. Inc., 6908 Chapman Road, Lithonia
- GLOVIS Georgia LLC, 6101 Sorento Road, West Point
- JAS Forwarding USA Inc., 6165 Barfield Road, Sandy Springs
- Nolan Transportation Group Inc., 365 Northridge Road, Atlanta
- XPO Last Mile, 1851 W Oak Pkwy., Marietta