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COVID-19 Effects on LTL Transportation

The effects of COVID-19 have been felt across the board in transportation and the changes it brings to customers and shippers is having a widespread impact. There have been some recent and significant changes within the domestic LTL sector, a few we cover below.

Suspending reimbursement payments for failed guaranteed or time critical shipments

Several LTL carriers have suspended reimbursement if a shipment fails to deliver by the due date on guaranteed, time critical or priority type shipments. These carriers will still make every attempt to deliver by the guaranteed date and they will still get priority over non-guaranteed and non-essential goods type shipments. During this time, please be aware this is a carrier by carrier basis, some still honor guaranteed reimbursement failures. This should return to normal after we emerge successful from this virus, however, there is no ETA on when this will occur. Please reach out to your Agforce contact if you have a time-sensitive shipment and would like a solution for how we can get this delivered on the due date.

No-touch proof of delivery receipts

Many LTL carriers have implemented a “no-touch” proof of delivery (POD) or deliver receipt (DR) due to COVID-19. If a driver or receiver is uncomfortable with touching someone’s paperwork or device, LTL carriers are having their drivers sign the POD for the receiver with the receiver’s permission. They then transmit this completed delivery to their dispatchers with the time, date and name of the receiver. With these new implementations, we encourage shippers and receivers to take pictures of the shipment at pickup and delivery to help support a claim if required for damage. Ideally, we would like the receiver to notate with the driver “damage” upon delivery but know that is not always the case as some receivers may not be checking for damage ASAP with the driver onsite with the pandemic.

Undeliverable freight procedures due to business being closed or limited hours due to COVID-19

Our partners are seeing a huge increase in undeliverable freight with receivers being closed or limited hours. This increase is causing multiple issues such as storage, delivery delays, backlogging their supply chains and altering the way their operations can process an increased volume. Prior to this, carriers would call the billing party if a shipment were not able to be delivered and request a disposition. Normally we were given a couple of days to provide a resolution before storage charges were applied and flexibility in working with the customer. Currently, procedures are adjusting to returning the freight back to the shipper automatically with no prior authorization, and a limited timeframe for the customer to resolve the issue or storage charges can occur. In some cases, these charges are automatically applied to the customers’ invoice resulting in large adjustments from the initial quote. Driven largely from nationally based LTL carries, we expect the regional carrier to follow suit. It is highly crucial, now more than ever, for customers to communicate closures or limited hours with carriers to prevent this from occurring.

Delays in invoicing and back office functionality

Back-office functionality has largely been an offshore product for many LTL carriers with the pandemic causing a worldwide shutdown. As they work through the process of it, we have seen a rippled effect of delays in documents and invoices. Communication is paramount, if you need anything from us please let us know, we are doing our best to stay ahead of this.

One positive COVID-19 case can shut down an entire terminal

Increased sanitation measures have been put in place at terminals. If someone tests positive, they will shut down the terminal to sanitize everything. This can cause missed pickups, deliveries, and delays in transit. There is not a great way to predict this, so wherever possible please allow flexibility. We will do our best to communicate any closures that may impact your shipments.

Conclusion

This is an unprecedented time and the need to adapt is paramount. At Agforce, we embrace change and our agility allows us to thrive in any environment. Please reach out to your Agforce partner if you would like to discuss anything around these events or if we can provide more information. We will get through this together and be stronger from it.

“The only constant is change” – Heraclitus

-Ryan Chancey, LTL Carrier Relations Manager

Ryan Chancey

Monitoring the Effects of Coronavirus on Transportation and Logistics

To be honest, we’ve been meaning to write and publish this article for more than a week now. But with every passing day, we thought maybe the time wasn’t yet right. There was so much information still flowing in, so much news to analyze. How COVID-19 is affecting individuals, society and the economy changes hour by hour as new cases are confirmed, governments mandate safety measures, scientists work to develop vaccines and people across the world scramble to hoard a years’ supply of toilet paper. 

Within just a few days, the U.S went from business as usual, essentially, to cancelling international corporate conferences, NCAA March Madness, suspending the NBA season, restricting travel from Europe, shutting down college campuses and k-12 school districts. 

Finally we realized … this is just the nature of this global crisis. There will not come a point, until we can look back and agree in hindsight that the worst of COVID-19 is behind us, that anyone – not government officials, not healthcare authorities, and especially not transportation and logistics experts – will really feel like they have a handle on what’s next. It all depends on how society reacts, and how quickly, to this yet-unpredictable virus. 

But for today, we want to give customers and carriers our perspective on how COVID-19 will affect the logistics industry, and how Agforce is here to support you through the uncertainty. 

What we know now, and what we predict next

COVID-19 originated in China, a primary importer to the US, and specifically in Wuhan, a major manufacturing hub. Initially, this outbreak and its subsequent effect on production were expected to significantly affect the volume of product coming into US ports, thus affecting domestic shipping levels, first on the west coast, then on the east coast. 

A synopsis from the Journal of Commerce says “The coronavirus disease 2019 (COVID-19) is delivering some early year disruption to the container shipping market. Chinese factories may be slowly getting back to work but the damage is already done, and there’s no guarantee factories will be up to full power anytime soon. China travel restrictions are crimping domestic truck delivery and challenging factories’ ability to get crucial components from their suppliers. Unsurprisingly, the backlog of factory orders is frustrating container lines and importers alike.”

The slow-down didn’t happen immediately, however. Due to the fact that most people carry high inventories because of the Chinese New Year, supply was able to match demand. As the lack of imports begin to be felt across the ports, those markets dipped quickly and caused ripple effects in other markets. Then, as those supplies dwindled and imports halted, the industry began to slow. The Wall Street Journal Logistics Reporter Jennifer Smith wrote that the Port of Los Angeles is projecting a 25% decline in container volumes this month. But even in Wuhan, which has been hit hardest by the virus, containment measures are proving to have worked and production is slowly coming back online. This effect will be slow, and it will likely be late April or May before supply chains begin to churn again. But then what? 

Don’t expect rates to go back to where they were at the end of 2019. As China ramps their industrial production back up, the freight will begin to hit our ports in late April or May. We expect rates to be very elastic during this time with pockets of tight capacity arising. Rates could jump quickly depending on demand and timing. Another factor will be how the US handles containment of the virus and the effects on the economy domestically. It is still too early to predict the effects of the virus in the US to our freight markets, but we will continue to monitor it closely and update our customers. If you want to give your Agforce rep a call to talk about strategy for when this happens, we would love to talk to you. 

Customers and carriers, remember we’re here for you 

We’ve always treated our customers and carriers like partners, and that treatment goes double when times are tough. We urge you to wash your hands well and often, follow guidelines from the CDC, and try not to panic. We’re here to help you develop a business strategy that will guide you through the pendulum-like swings of the coming days, weeks and months. 

If you have concerns or want to talk strategy, give us a call at 877.367.2324 or email inquiry@agforcets.com.