Hauling firms met pandemic challenge

Barren store shelves and lengthened ship times marked the arrival of the coronavirus in the U. S., yet domestic supply chains for consumer goods remained largely intact during the pandemic’s chaotic first weeks.

Haulers and third- party logistics ( 3PLs) providers big and small face a continuing challenge though, one that actually pre- dates COVID- 19. Drivers are scarce. “There’s more freight moving than the amount of trucks, for sure,” said Michelle Taylor, CEO of Taylor Logistics, a freight brokerage firm in Leesport.

And ultimately it’s consumers who pay the price.

3PLs pass coronavirus stress test

While some products — notably paper goods and disinfectants — were hard to come by for a time, and popular e- commerce companies pushed back delivery windows for non- essential items, shippers eventually caught up with the abrupt explosion in demand.

One reason was the ability of 3PLs to quickly pivot, noted Marc Althen, president of Penske Logistics, headquartered in Green Hills.

Many of Penske’s clients are in the automotive and manufacturing industries, both of which were widely shuttered when COVID initially struck. However, by diverting resources to move and warehouse much sought- after grocery or PPE, 3PLs simultaneously kept their own businesses in motion and a nation afloat.

“We’re pretty agile,” said Althen. “We were able to shift our workforce to other industries we service — food and beverage, medical supplies. We’re very proud of that.”

Penske was able to assist clients that did experience significant supply chain disruptions as well, or provide assessments for those proactively seeking to avert a breakdown.

“People asked, ‘ Can you help us do a deep dive on our supply chain,’” said Althen. “How it’s running, identifying areas of improvement, opportunities for optimization.”

Not all 3PLs possess quite the vast resources of a Penske, one of the largest transportation companies in the world with nearly 16,000 employees.

Still, the dramatically altered landscape presented some opportunities for those firms that evolved.

“We’ve been diversifying in the commodities we handle,” said Taylor. “Not only moving containers of facemasks, but also warehousing them, getting more involved in grocery, frozen foods. That’s been really helpful.”

In the 31st Annual State of Logistics Report released by the Council of Supply Chain Management Professionals in June, lead author Michael Kearney noted many 3PLs “rolledup their sleeves and served their customers who saw surges in demand.”

“3PLs will be seen as valuable assets that came through in a crisis,” said Kearney. “In many cases, it held up better than expected. The story is that both shippers and carriers learned a lot from the COVID crisis.”

Drivers needed

The story is perhaps that muchmore impressive given that the pandemic exacerbated an existing shortage of drivers.

“People are shipping more, which is great,” said Taylor. “But truck capacity has definitely tightened up a lot. It’s a big concern.”

As Althen points out, young people are not necessarily looking to enter into a career as a truck driver, with the profession’s average age being 55 years old in the U. S., according to the Bureau of Labor Statistics.

Penske is trying to court younger drivers with higher pay, an updated fleet and more regional routes so fewer of its employees are on the road for days or weeks at a time.

“It’s vital for us to ensure we provide our drivers with the latest, safest, most comfortable equipment sowe can attract new drivers,” said Althen.

“We’re more flexible with work schedules too, allowing drivers to come home on a regular basis. Most of our drivers are home daily after their shift.”

Penske employs about 5,500 of its own drivers though. A company like Taylor Logistics might contract drivers who own their own trucks — but between the rising costs in areas such as maintenance and insurance, it’s not always worthwhile for owner- operators.

“It’s getting harder for owneroperators tomake a living,” said Taylor. “They’re getting whatever their price is, but paying at least half of that in insurance and other costs.”

And while domestic shipping is becoming more regionalized, there’s still a need for the socalled over- the- road drivers who make cross- country trips, yet fewer people willing to carry those loads.

“Nobody really wants to go from California to Florida right now,” said Taylor.

The shortage has allowed some haulers to name their price, so to speak, leading to rising rates. As Taylor predicted in March, higher rates to transport goods, for any reason, will ultimately result in price increases passed on to consumers at the cash register or virtual checkout.

“We’re going to see prices of goods or services go up,” said Althen. “Ultimately, somebody has to pay for that.”

COURTESY OF PENSKE TRUCK LEASING Penske Logistics showed its adaptability during the early days of the pandemic but is continuing its efforts to try to court young truck drivers to the profession.