Technology, Pandemic Reshape Industry’s Business Models, Panel Says

One major trend over the past year has been a spike in e-commerce. (Ergin Yalcin/Getty Images)

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Advancements in technology and the impact of the coronavirus pandemic have driven major changes in trucking, a panel of experts said Jan. 19.

The discussion, part of the 2021 GlobalTranz Agent Conference, addressed trends in the multimodal trucking space. Topics included e-commerce volumes, shifting consumer behavior, market volatility and the pandemic.

“It’s very exciting,” said Dave Black, vice president of corporate sales for Roadrunner Transportation Systems. “We’re back to talking about technology. We’re talking about advancement. We know some of the enormous challenges that all of us on this panel are fighting right now in terms of capacity and in terms of driver resources.

“I think we all know that as we move forward, we’re going to have to do something different to make sure that we keep pace and accommodate the demand.”

Roadrunner ranks No. 20 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

The coronavirus was a major part of the conversation as it contributed to many of the trends carriers and shippers have faced over the past year. A primary issue was market volatility that the industry had to adapt to.

“We saw freight all over the board,” said Steve Clagg, corporate account executive at Ward Transport and Logistics. “Pre-COVID, I would say was flat compared to 2019 and 2020. Then you get into the first COVID month, which was in the latter part of March, we saw the immediate drop-off of business and then April continued suit.”

Clagg added that in the early stages the industry had to adapt to new rules and regulations, such as determining what was deemed essential and nonessential work. He noted his business during that time dropped close to 30%.

But the situation improved.

“I think the thing that caught us by surprise — I think it probably did all of us on the panel — was the fact that the industry recovered very quickly,” he said. “We got into May and June, and that drop-off really began to lessen dramatically. Then we got into the second half of 2021. Our numbers started increasing precipitously.”

Phil Atwell, director of enterprise sales at ABF Freight System, echoed a similar experience. ABF is a subsidiary of ArcBest, which ranks No. 14 on the for-hire TT100.

“Since that time and through the third quarter we’ve experienced sequential increases in monthly revenue and tonnage almost every month, which is certainly encouraging,” Atwell said. “Through the third quarter, we saw our average weight per shipment increase over that same period versus 2019. We’re starting to see some positives there.”

Atwell

XPO Logistics Inc. conducted a survey of consumers that found 94% of people are more likely to buy online and 51% prefer to shop online. The survey covered consumers in the United States, United Kingdom, France and Spain. It also found 91% of retailers believe they are prepared to manage the surge in online orders.

“So our thought on e-commerce is that it’s here to stay,” said Marissa Christensen, XPO vice president of national 3PL sales. “Overall, consumers want speed and they want availability, and retailers are turning to experts for more support to get it done.”

XPO Logistics ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America and No. 3 on the for-hire TT100.

Businesses across the economy also had to adapt to remote working early on in the pandemic.

“Fortunately, we adapted rather quickly to our virtual interactions and social selling,” ABF Freight’s Atwell said. “Earlier this year, we successfully transitioned nearly 90% of our employees to work from home. The productivity levels of our employees have remained high through this transition, which is certainly encouraging.”

Roadrunner’s Black also found that the economic unpredictability brought on by the pandemic has affected contract negotiations and that many customers are requesting shorter deals.

“We tend to have one-year agreements in place with most of our accounts base,” Black said. “Now when you take a look at just the unprecedented changes within the industry, what a variety of the different vertical markets are going through right now, we’re finding that there’s just too much uncertainty.”

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