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From Panic-Buying to Lockdowns of Eateries & Manufacturing: Truckers, Railroads Face Supply Chain Turmoil, Spikes & Plunges

April 15, 2020

From Panic-Buying to Lockdowns of Eateries & Manufacturing: Truckers, Railroads Face Supply Chain Turmoil, Spikes & Plunges

“There has been a clear divide between winners and losers.”

Panic buying in late February and March was followed by a sudden shift in consumption in mid-March away from restaurants, schools, college campuses, office buildings, other work locations to supermarkets, warehouse clubs, and ecommerce. For weeks, brick-and-mortar retail supply chains failed to keep up, and bare shelves in some product categories became a common sight. But the supply chains at the other end of the spectrum ground to a halt, stuck with goods that had no place to go.

This divergence has shown up in the trucking business. March was busy for truckers hauling dry-van trailers and refrigerated trailers (reefers). The Van Load-to-Truck ratio in the spot market surged by 56% from February and by 84% from March last year, according to DAT Trendlines. The Reefer Load-to-Truck ratio surged by 45% from February and by 91% from March last year.

But in April so far, all this has unwound. In the week ending April 12, the Van Load-to-Truck ratio plunged 44% from a week earlier. For the past two weeks, “Van spot freight volumes lost 20%,” DAT reported, “and national average rates lost 8¢ per mile, to $1.78, reflecting declines all over the country.”

“Reefer trends weren’t much better,” DAT said. The Reefer Load-to-Truck ratio plunged 42% over the week ended April 12, compared to a week earlier. “It’s been an up-and-down kind of market for reefer equipment,” DAT said in a blog post on April 9. “We’re not talking about a gentle rise and fall – more like a giant roller coaster.”

But it’s a very dynamic market, with reefers getting switched from the shut-down food services industry (such as restaurants and schools), to haul produce for the grocery supply chain:

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