Shipping & Freight Update regarding COVID-19

A lot has changed over the past week. We hope everyone is healthy and continues to stay healthy in the weeks to come. As parents, friends and members of our respective communities, we are all dealing with a tremendous amount of uncertainty. Rest assured—as the COVID-19/coronavirus situation unfolds, we are closely monitoring any changes and will continue to provide updates when appropriate.

WE’RE STAYING HOME. FREIGHT IS STILL MOVING. WE’RE HERE TO HELP!

Non-essential travel is on hold for Brew Movers, but you won’t notice any difference in service. We are preserving 100% of our uptime for our clients. The only variable right now is the carrier network, but we are hopeful that service will not be overly disrupted.

At this time, most carriers are still fully operational both for pick up, delivery and back office support. We have over 120 LTL carriers and 10s of thousands of TL carriers to move down the line should one become unavailable.

LTL

We have received no word on capacity issues or potential terminal and call centers closures that would disrupt business. We have received several updates from carriers regarding the steps being taken to limit exposure to the virus:

• Stopping all inside deliveries
• No signature on delivery receipt required
• Shipments sent to closed businesses will be held at terminals

That being said, LTL will most likely experience the biggest impact in the weeks to come. Assuming the virus continues to spread, estimated LTL shipping time frames will stretch as more drivers and dock workers are infected. This could cause freight to be frozen in a terminal for a period of time.

In terms of rates, pricing is still solid at this time and there have been no indications there could be extra tariffs or surcharges.

LTL SUGGESTIONS:

• Encourage customers to take back stock of inventory before terminal closures. Some stockpiles are better now because it is unclear what the future of freight will look like if we experience a closure. Longer lead times are probable.
• Encourage customers to anticipate and order before the “just in time” standard to provide a buffer on the estimated delivery dates. In other words, set expectations that a typical two-day transit might take four.
• Our team will continually track all shipments. If we connect with a terminal that has fallen ill, we can work with your team to notify impacted customers and determine alternate routes.

THROUGHOUT THIS CRISIS, IT IS IMPORTANT TO REMEMBER THAT DRIVERS ARE PEOPLE TOO, AND THIS VIRUS IS UNDERSTANDABLY MAKING THEM NERVOUS AS WELL.

TRUCKLOAD:

Capacity is tight and the TL market is becoming more volatile due to continued increased demand and loss of capacity. This is due to several factors, including the exit of a significant amount of capacity from the market over the past several months. When combined with the recent spike in demand driven by the replenishment of consumer goods, the result is a higher load-to-truck ratio.

Due to large volumes, we are seeing rate escalation in the Truckload sector with hourly upward movement. Due to the fragmented nature of the TL market, we don’t anticipate complete service outages with this mode. With 98% of all TL trucking companies having less than six trucks, we feel that the spread of impacted drivers will be limited.

BREWERY OWNERS ARE KICKING THE CAN DOWN THE ROAD AND PLANNING FOR A ROBUST FALL WITH EVENTS AND FESTIVALS.

TL THOUGHTS:

• TL will remain as our most dependable mode of the next several weeks, but rates will likely climb.
• Capacity will continue to tighten with fewer trucks on the road and as our communities are requesting critical commodities.
• The shutdown of restaurants and bars will place a greater strain on local food, beverage and home goods retailers. As this occurs, we expect the increased demand to restock shelves to continue.
• Short-term, we have heard from a number of brewery customers who are cutting production because of the lack of patrons to their tap rooms. We’ve also had five festivals canceled. However, brewery owners are planning for a strong fall with events and festivals.
• In our opinion, this 6-8 week shutdown will come back harder and faster putting an even bigger strain on our nation’s freight network as all sectors bounce back in catch up mode.

We hope our recap provides some color on the current LTL and TL climate. We understand nothing is definitive and it seems like the news regarding COVID-19 changes daily. Know that Brew Movers is here for you and we will keep you updated as this situation evolves.

Tagged: shipping, freight, covid-19, coronavirus, craft beer, managed logistics