As GDP drops, capacity tightens.
What does this mean for shippers?
There is no doubt that COVID-19 has had a very real impact on our economy and shippers. The U.S. gross domestic product (GDP) fell an annualized rate of 32.9% in the second quarter of 2020. This is the largest decline on record, surpassing the financial crisis of 2008 which was 8.4%.
Some industries, such as saw revenue evaporate instantly, while other verticals like retail goods, fitness, and home improvement, saw revenue spike. This sudden shift in the economy had a major impact on carriers, as they saw some guaranteed volume come to an immediate halt. Carriers had to park their trucks or close doors to adapt to this shift and, as a result, shippers have experienced a tightening of truck capacity and an increase in rates on the spot markets.
What’s next for shippers?
While the ripple effects will not go away overnight, there are clear signs of an economic rebound. The largest movie theater chain, AMC, reopened its theaters in late August and in May homebuilders saw the strongest sales month in over a decade. So, we identified the Top 4 actions you can take today in preparation for the V-Shaped economic rebound that many are expecting to take place by the 4th Quarter.
While COVID-19 has had a major impact on every business, one thing is clear, you must focus on what you can control. You need to continue solving problems and creating new opportunities to increase efficiencies and reduce costs where you can. While the freight industry can seem chaotic, now is the perfect time to identify areas you can improve on and act. These improvements will not only provide short term gains, but it will also help you thrive when the economy fully recovers.
At Dynamic Logistix we are boldly changing logistics management, one client at a time. Our Tier 1 TMS program includes a leading Cloud-Based TMS that streamlines freight logistics from order entry, load building, route optimization, and carrier selection. We offer our clients 24/7 visibility, ERP integration, freight audit and pay, business intelligence reporting, and dedicated account managers Dynamic Logistix is eager to help your company save money and time. Click here to schedule a complimentary process review with our logistics team.