The convulsions that COVID-19 has sent through the economy and supply chain have made it imperative for carriers to diversify their customer base, shed weak areas of their business and adapt to changing retailer behavior.

Norm Thomas, Senior Executive of Industry Relations at Powerfleet

Norm Thomas, Senior Executive of Industry Relations at Powerfleet

“What COVID-19 is doing is stress testing by default every country’s supply chain and every company supply chain,’’ said Norm Thomas, senior executive of industry relations at Powerfleet. “And some of them are failing because of that stress test. Out of the many companies hauling during this time, even in refrigeration, some have survived and some have not.”

So how do carriers pivot? According to Thomas, coming out of COVID-19, fleets need to take a look at their freight mix and whether they’re hauling the right, essential portfolio of product should another coronavirus shutdown occur. For example, certain fleets are idle because their last-mile delivery for food service to restaurants has stopped.

Peter Rentschler, Chief Executive of CarrierDirect

Peter Rentschler, Chief Executive of CarrierDirect

“COVID-19 has put a spotlight on the businesses that are architected to move quickly and make fast decisions,” said Peter Rentschler, chief executive of CarrierDirect, a consulting and technology delivery firm for the transportation industry that serves carriers, freight brokers, shippers, distributors and technology companies..

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E-Commerce Boom

Looking back to before the e-commerce boom, fleets focused their services singularly on long-haul, intermodal or short-haul. As online shopping created greater consumer demand for same-day or next-day delivery, the carriers had to pivot toward that last-mile need, Rentschler said.

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Just as e-commerce forced trucking fleets to diversify their fleet types, COVID-19 will force them to diversify their customer base, making sure a good proportion of their freight is deemed essential. If a sector or industry goes down due to COVID-19 and a carrier hasn’t diversified, that carrier might be following it, analysts say.

A telematics company like Powerfleet can benefit a carrier as an external consultant, helping them get equipment moving by servicing customers who need additional truck capacity and don’t currently have it. Some carriers with high demand don’t have the assets to pick product up. And some customers have assets that don’t have a way to connect with the product.

“For one of PowerFleet’s ELD in-cab system customers, 99 percent of their business was in the restaurant industry,’’ Thomas said. “All of that stopped when the state started shutting down the restaurants. We were able to identify two or three customers who were essential goods customers who needed additional capacity, and were able to connect these two customers. For owner-operators who have data actively feeding into this in-cab ELD system, they are able to go from customer to customer and utilize this middle ground to exchange data.”

Shift in Retailer behavior

Carriers may have to prepare for yet another shift in retailer behavior, analysts say. While large retailers have grown accustomed to dedicated fleet relationships with one hauler, these same retailers now see that with COVID-19 there comes a lack of command and control over drivers and fleets.

“You are starting to see some of those companies seriously consider creating their own fleet and buying trailers and tractors so they can have control over their supply chain,” Thomas said. “In the retail and big box space, you start to realize that you’re as much or more in the logistics business than you are in retail.”

Since the e-commerce boom, trucking companies have had to take a closer look at consumer behavior. With COVID-19, they can see an unprecedented increase in online shopping and grocery delivery. No longer is this consumer choice only about convenience; it’s about health and safety. Carriers must diversify their services by depending on third-party visibility, whether through technology or industry expertise.

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