Despite being considered an essential service throughout lockdowns, commercial trucking still felt the economic ramifications the COVID-19 pandemic had caused.
The Impact Of COVID On The Commercial Trucking Industry
From limited movement to loss of jobs, these effects will more likely remain even as the world economy gradually reopens in the following years. It’s anyone’s guess whether or not the industry can return to pre-pandemic levels.
Long story short, it’s not a good time to be a trucker, especially in Canada.
But to understand how bad the pandemic hit the industry, it’s worth expounding first how big it is and how it performed pre-COVID. As this detailed analysis explains, commercial trucking was hit hard when the industries it served were, too.
A Statista report indicates that Canadian commercial trucking had made close to CAD$ 40 billion from making 63.7 million shipments in 2018. That same year, the industry employed over 300,000 truck drivers and made an average revenue of CAD$ 621.15 per shipment.
Sharing the world’s longest border between two countries, the U.S. is a significant market.
In 2019, the U.S. Department of Transportation logged over 1.4 million empty and 4.3 million loaded trucks crossing the U.S.-Canada border across all 77 land-based ports of entry.
Granted, some of these trucks aren’t necessarily bound for the U.S., but it still generates revenue somehow.
Trucking isn’t as easy as driving, as one might think. Truckers must maintain situational awareness throughout the long journey while sticking to their timeline.
Given the trade commodities that they have to haul and their value, it makes sense for trucking companies to protect their trades from any unforeseen circumstances.
Hence, a commercial trucking insurance policy is no less essential.
Lack of Young Blood
In March 2020, the two countries closed their borders to non-essential, optional, and discretionary travel. However, in the best interest of keeping a steady supply line of essential goods (e.g., food, fuel, and medicine), they allowed anyone ‘engaging in lawful cross-border trade’ fluid movement across the border. Truckers are well within the criteria.
Yet despite their growing importance, there are fewer truckers today than before. A month before the border closure, commercial trucking was already facing a shortage of at least 20,000 truckers in the for-hire sector.
If COVID-19 and other current trends continue, the Canadian Trucking Alliance (CTA) estimates that the deficit might reach 50,000 by 2024.
It’s only now that the industry is feeling the effects of issues that are years in the making, namely attracting new blood. The CTA admits that it’s experiencing a so-called ‘demographic cliff,’ where the average age of truckers continues to increase, many in their 50s and 60s.
These people are more susceptible to infection than younger ones, which can aggravate the shortage.
Traveling vast distances also means they have to be away from their families and the relative safety of their homes. Even though the job pays well, a trucker’s hard-earned salary can end up going to costly treatment if they get the disease along the way.
A Dip in Demand
Quarantine measures stifled economic activity in 2020, with non-essential businesses such as malls and restaurants prohibited from operating.
Statistics Canada reported an all-time low in Canada’s GDP at nearly 40% throughout the first half of 2020 before rebounding strongly in the second half.
As impressive as the recovery appears, the country felt the effects of the slump.
With many businesses unable to operate, the industry found itself making far fewer shipments than before. Most of these are foodstuffs and medicine, crucial for the facilities that process or use them.
But they face far more difficult working environments, with far fewer open pitstops and subjected to additional quarantine measures upon their return.
Despite the situation, those tasked with essential shipments are still fortunate to have a job. Those making non-essential shipments, however, can’t bring goods to businesses that can’t open.
They’re left with barely anything to do, much less a source of desperately-needed income.
Truckers operating out of warehouses that had to cease operations due to COVID infections were also left without a job.
A confined space where thousands of people take inventory and pack goods is nothing short of a recipe for a severe localized outbreak.
Quick to Adapt
The pandemic has been nothing short of a rude awakening, not just for Canada but also the world.
After more than a year in quarantine, economic activity is slowly returning to pre-pandemic levels. Nevertheless, the experience has taught everyone not to leave crucial decisions to chance.
Current business doctrine can be summarized this way: ‘Yesterday’s solutions won’t necessarily solve today’s problems.’ So, in this case, what can commercial trucking do?
Priority should be to address the mounting shortage. As online shopping had dominated commerce during quarantine and continues to do so, demand for truckers to facilitate timely delivery of goods will become more necessary. The good news is employment in the trucking industry has been on an upward trend since June 2020, albeit slowly.
But the issue isn’t as simple as that, as Trucking HR Canada spokesperson Angela Splinter attests. Employing more truckers is one thing, but training them is a different matter.
She explains that newcomers still require months of specialized training by their senior peers before they can begin making long and short hauls alone.
Unless the industry is quick on its feet, experts estimate that it’ll be unlikely to satisfy the shortage within the next three years, despite the recovery.
An aging workforce means more truckers will be retiring than the industry can replace them.
Some groups are already addressing these issues. One example is the Future Skills Centre’s virtual reality trucking simulator, which also features advanced eye-tracking systems for trainers to see if the trainee’s eyes are really on the road.
Nevertheless, solving the trucking crisis will take a two-pronged effort by both the public and private sectors.
Trucks remain the primary mode of logistics in Canada. As such, this vital economic artery has to be preserved if the country’s growth will be sustained post-COVID.
As mentioned before, a return to pre-pandemic levels is still up in the air. But with a concerted effort, that time may come sooner than expected.