Impact of the COVID-19 Pandemic on the Shipping and Trucking Industry

The COVID-19 pandemic has affected every economic sector and the shipping and trucking industries are no exception. Like a domino effect, the decline in manufacturing in other countries has reduced international trade leading to a loss of work at American ports and roads.  

Cargo volumes were stored at major ports but not transported; bans on international imports and exports have led to lack of productivity at these ports, leading to a loss of jobs for truck drivers, and most retailers had cancelled orders before the start of the summer. No industry around the world–automotive,  pharmaceuticals, domestic goods or consumer goods–was spared. 

Impact on American Ports:

The coronavirus hit the country’s shipping ports hard, with many facing steep reductions in cargo trade compared to last year. According to the American Society of Civil Engineers’ COVID-19 Infrastructure Report, the economic downturn stands to cause significant damage to ports’ overall volumes, to the tune of an estimated decline of 20% to 30% in total annual receipts. 

The Port of Los Angeles, the nation’s largest port, moved 856,389 Twenty-Foot Equivalent Units (TEUs) in July, a 6.11% decrease. As of the end of July, overall cargo volumes had decreased 15.3%. 

The Port of Long Beach actually saw an increase in cargo shipments, bucking the declining trend faced by other ports in the country. The nation’s second-busiest port moved 21.1% more cargo in July 2020 compared with July 2019. Two potential causes come to mind: a lag in orders placed in 2018 may have filled inventories and shifted additional orders from 2019 to 2020, resulting in a year-over-year increase in cargo volume numbers, independent of the pandemic. Also, the Executive Director of Los Angeles Port shared in a statement that there had been a shift of some services from the Port of LA to Long Beach in June, which could have caused an additional gain for the latter and loss for the former during these months.

The Port of New York and New Jersey saw a 16.3% year-over-year decrease in total Twenty-Foot Equivalent Units (TEUs) in June. Imports decreased by 12.5% and exports decreased by 20.3%, while the total number of empty containers decreased by 16.3%. 

Why Were the Numbers Down?

This decline can be attributed to several factors: manufacturing in countries in Asia and Europe affected by the COVID-19 pandemic; reduced demand, especially consumer demand, in the U.S. during the ongoing crisis; and the virtual standstill of manufacturing in the US  for the first few months of 2020 leading to retailers delaying, postponing or in many cases, even canceling shipping orders.

Lastly, most of these ports experienced record-high volume trends last year, so some of the 2020 decrease reflects reversion to the mean. 

Impact on the Trucking Industry:

As usual, when any mobility mode is affected, the effect reverberates throughout all modes of transportation. Trucking companies are the most used ‘way-of-means’ to move freight from port, and gate movement is seen as a reliable way of tracking truck movement in ports. Increases in gate movement show that a port is running ‘healthy’ since more trucks are required to move a surge in cargo volume (the reverse also holds true). Gate Movement Analysis data from the Port of Los Angeles show that the port activity had almost been restored to pre-pandemic levels in the months of July and August. 

Total container moves in 2020 fell 6% year-over-year each month until April 2020. This deficit was reduced to 2.75% by July, demonstrating a definite uptick in summer shipping orders. 

Trucking Industry Status in the Tristate Area:

When providing data sources, Lisa Yakomin, the President of the Association of Bi-State Motor Carriers (based in the Tristate area), told me that the cargo trade at PA-NY&NJ is more diversified (as compared with the ports on the West Coast like the Port of Los Angeles) with regards to the container origin, which muted the initial impact of the slowdown. “The pandemic started exploding here in NY/NJ right on the heels of the Chinese New Year, a time when things are typically slow anyway, so that’s another reason we didn’t feel the effects right away.”

Weigh-in-motion (WIM) data from the C2SMART’s testbed on the Brooklyn-Queens Expressway (BQE) supports Ms. Yakomin’s statement. In the Center’s first edition of the COVID-19 and Transportation White Paper series, C2SMART researchers showed that truck traffic had appeared to have dropped 15% on the Queens-bound route and 19% on the Staten Island-bound (SIB) route compared to pre-pandemic numbers. With fewer cars on the road and little to no traffic in March and April, the average speed range on this section of the BQE increased by approximately 5mph for both QB and SIB, a point reiterated by Ms. Yakomin as well.