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2020 Freight Industry Issues

The COVID-19 Pandemic has strongly impacted people’s lives, communities, and global supply chains. Alongside the health issues the virus has caused, the Covid-19 pandemic has delayed deliveries at shipping ports. Since the beginning of January 2020, the freight industry underwent issues many industries were not prepared for. Ports are overflowing with cargo as the world is still accumulating to the new restrictions on shipments and receiving. While cargo piles up at international shipping ports, prices rise on transport costs, and supply chains find new ways to ship and receive their cargo.

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Freight Industry Issues

In early 2020 the pandemic brought along many freight industry issues that disrupted several supply chains. Issues rose as many port workers or truckers became ill with the Covid -19 virus and were unable to fulfill their jobs. Many shipping companies or ports had or still have a shortage of employees due to a portion of the team being unfit to work. Low staff turnout in a shipyard or port can slow or stop productivity until there is a sufficient number of employees working.

Shipping Delays At Ports

Since the beginning of 2020, freight industry issues began when cargo boats were denied access to ports. This is because crew members on either side of the pickup or drop-off of cargo were ill with Covid-19. In this event, the cargo does not unload off the ship. Cargo will stay packed until access is granted to the shipping port.

Low Wages

Currently, a lot of truckers’ work goes unpaid. Most drivers don’t get paid for all their time worked. Many companies pay drivers by mileage driven instead of for the time they invest on the road. Often, they get nothing for the time they spend stuck in traffic jams, construction zones, bad weather, or any of the other delays they encounter when on the road. Pay based on mileage raises safety concerns. Drivers may push too hard and stay on the road even when they know they need to rest. Knowing if they don’t, it lowers their pay even more. Being compensated a driver detention rate while caught in delays can ease the driver into continuing the trip. Although, not all companies compensate for stagnant time.

Driver Detention

Driver detention is when a driver and route are delayed for more than 2 hours at the time of pick up or delivery. Over this 2-hour period, a detention charge is applied for the driver and carrier for being held up. The detention charge is usually between $35 to $75 per hour. Although most trucking companies won’t pay for driver time waiting, only if it exceeds the 2-hour limit. Even then, drivers might only be paid an extra hourly rate of $15. If detention is foreseen some carriers won’t take the shipment. While many drivers are working $100k+ truck investments, it’s not profitable for anyone to wait around for $15 per hour.

Shortage Of Drivers

Currently, there is a large number of drivers that are resigning from the shipping industry. Even though truck drivers can make a respectable amount of money each year, their job is very stressful and time-consuming. Many supply chains are already strained due to the pandemic and all the issues it brought along, as truckers continue to leave the profession. Starting in 2020, the outbreak of Covid-19 and the resulting waves of the virus encouraged many drivers to quit the industry.

At the height of the virus, many truckers became ill on the job. This was a result of stopping at hotels and local diners which increased their chances to contract the virus. Truckers returning from a job were potentially putting their family in danger of becoming ill from the virus. Being a highly contagious virus, many people became ill from it being brought home with them or a family member. Many who became sick with the virus while on the road were kept from home longer.

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Hours Of Service Decrease

Many shippers’ hours of service (HOS) experienced a decrease which led to less motion within their shipping industry. As businesses and companies dropped their hours of service, this resulted in fewer jobs for truckers and minimized time to deliver shipments.

The major changes in the 2020 hours of service reforms affected truckers:

For example, in 2020 Walmart was one of the top shipping industries, after the economical shutdown and then reopening, Walmart’s HOS in many areas of the country lessened from 24-hour service.

Ship With FreightCenter

The bottom line is that you want and need to keep your product’s shipping. When disruptions come to your supply chain it can be extra confusing to keep your products moving. That’s where partnering with a 3PL, like FreightCenter, gives you the upper hand during normal and unprecedented events.

We understand how critical it is for your business to run smoothly, and we are ready to help you develop a supply chain strategy that takes the guesswork out of shipping. Instantly compare quotes from top carriers or call one of our shipping experts at 800.716.7608

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