Arkansas Trucking Firms Adjust to Pandemic
The great pandemic of 2020 has done many things: Strained the capacity of the health-care delivery system; forced a re-evaluation of the means through which higher education is delivered; richly rewarded investment in food-delivery and streaming services. And, perhaps above all, it has emphasized a reliance on the modern supply-chain system.
In short, all those tractor-trailers dotting the Interstate 40 landscape between Little Rock and Memphis — the ones delivering bread and toilet paper to Kroger — might not be viewed as such a headache, post-pandemic. Even still, as with all business, the transportation industry has been forced to adapt.
Over-the-road carriers, in particular, have been impacted as the world rides out COVID-19 with shuttered economies. Rochelle Bartholomew, CEO of Little Rock-based CalArk, told Arkansas Money & Politics the challenges evolve daily and have revealed just how intricate supply-chain mechanics can be.
“We experienced a huge spike in demand in the beginning of the COVID-19 outbreak. And now we have seen demand completely drop off in some other markets due to customers shutting down for a period of time and consumer spending becoming weaker,” she said. “The supply chain is very complex, and when one function of it is compromised, the entire network is unbalanced causing much struggle.”
The trucking industry benefited from an initial coronavirus surge as manufacturers raced to fill grocery stores with, well, toilet paper and other essentials. But as various aspects of the economy began shutting down throughout April, there were less goods to haul.
“Keeping our freight network balanced is essential to our success,” Bartholomew said. “We haul some essential products and are just now seeing production catching up with the demand for necessities such as toiletries, food and medical PPE. But understand that the game of ‘catch-up’ in these sectors will be ongoing until the virus passes its peak.”
P.A.M. Transport of Tontitown, a leading dry-van truckload carrier that serves the auto industry, laid off 75 employees in March after the shutdown of U.S. automotive plants. In 2019, 40 percent of its revenue was derived from the auto industry, according to company filings with the U.S. Securities and Exchange Commission.
March represented the storm before the calm, said American Trucking Association Chief Economist Bob Costello in an April 21 statement. That day, ATA released data showing the national tonnage index up 4.3 percent in March 2020 over the previous year. But the report also forecast an April slowdown.
“While freight to grocery stores and big-box retailers was strong in March, especially late March, due to surge-buying by households, freight was anemic in other supply chains like that for gasoline, restaurants and auto factories,” Costello said. “Because of this, and the continued shuttering of many parts of the economy, I would expect April tonnage to be very soft.”
Shannon Newton, president and CEO of the Arkansas Trucking Association, said the “fragmented” industry is pulling together to weather the virus.
“Delivering to certain places ceased almost overnight,” she said. “We had some members who lost 60 percent of their revenue in 72 hours. But it’s very interesting. There’s been a lot of camaraderie, and shared experiences have brought individual companies closer together.”
P.A.M. chief Dan Cushman told FreightWaves.com that companies are sharing load boards and collaborating in other ways to help each other.
“We have reached out to our entire customer base, and I have reached out to my friends in the industry, and the response has been great,” he said.
On an average day, roughly 179,000 tons of manufactured goods are transported across Arkansas roadways, according to the Arkansas Trucking Association. Interstates 40 and 30 are major east-west arteries through middle America, and Arkansans are more than used to sharing the road with 18-wheelers. But average days now are few and far between.
As companies explore creative ways to replace lost revenue, the Arkansas Trucking Association is helping its 300-plus members survive the downturn.
“We’ve had to really ask ourselves what being an advocate looks like,” Newton said.
Truck drivers in particular have been impacted as over-the-road options for food and other services are limited. Newton’s group worked with the state’s congressional delegation and national franchises to get a fast-food app developed specifically for truck drivers.
And the state organization set up food-trucks at rest stops near Russellville and Malvern. It handles all the permitting and other logistics, and at certain times a day, these rest stops are filled with food trucks (mostly from Little Rock) catering to truckers. Arkansas was the first state to set up food trucks as options for truck drivers.
In addition, the state ATA is helping distribute PPE and bottles of hand sanitizer to truck drivers across the state.
“Driving is a difficult way to make a living,” Newton said. “They can drive 400 to 600 miles a day. When you start adding restrictions, like closed restaurants and places where they can get out and take shower — all those things that give them some normalcy — it makes it harder on them.”
Industry leaders say it’s important to take care of drivers, who they believe are among the most underappreciated of all American workers.
“The pandemic has brought about more awareness of how important our drivers and the industry are to the economy,” Bartholomew said. “What some don’t realize is our drivers deliver consumers’ necessities to the stores daily, no matter what is going on in the world. We believe that truck drivers should be appreciated every day, and because of the pandemic, much more focus has been put on drivers and their importance in the supply chain by the general public.
“The truck drivers are on the front lines and experience many risks throughout their day-to-day job functions and they are much appreciated and should be recognized for their heroism.”
Bartholomew said CalArk began implementing a contingency plan that focused on keeping drivers safe as soon as COVID became an issue. The company partnered with numerous vendors to get hand sanitizer, masks and gloves to drivers.
“Our customers have been great partners at establishing protocol at their facilities that limits unnecessary exposure to our drivers and their staff,” she said. “We continue to bring about awareness of the federal COVID-19 safety guidelines to our drivers and staff to ensure they practice all of the encouraged protocols on a daily basis.”
Locally, CalArk worked with the Church at Rock Creek, whose members sewed and donated masks for drivers and also wrote notes of encouragement; the nonprofit Healing Waters, which donated individual care packages with snacks for drivers; Tropical Smoothie Café, which treated office staff to smoothies, and of course, the state ATA.
“Our CalArk team is grateful to those who have shown exceptional kindness and generosity during this crisis. These gestures have lifted our spirits and encouraged us to stay the course,” Bartholomew said.
Post-peak must precede post-pandemic, of course. As the coronavirus national tour entered its third month in May, businesses began anticipating what the “new normal” might look like.
“This pandemic was not something this industry was able to prepare for at all,” Bartholomew said. “Each day is a time of uncertainty, and we have to be agile and prepared to shift according to the rapidly changing environment. Our management team established the mentality to take it ‘one day at a time’ and continue to stay positive to overcome this pandemic.
“We also have to continue to develop a more long-term strategy of what the economy is going to look like when the pandemic subsides. With all of the unknowns in the world today, there is so much uncertainty of what the true impact will be overall. CalArk, among many, is trying to figure out what the new normal is going to be.”
Newton believes the state of Arkansas has been “fantastic” in its handling of the virus. “There’s been no real threats of closing down the state; no adverse action toward our industry or interstate commerce in Arkansas. But we have to consider other states.”
It’s possible some industries, and certainly many individual businesses, won’t survive the pandemic of 2020. But it’s hard to imagine American commerce existing without trucking.
“My members are hurting right now,” Newton said. “They’re looking for a light at the end of the tunnel. They just need something concrete. They need to be able to tell themselves, ‘OK, I can endure this for X number of weeks.’ But the unknown makes the anxiety greater. They’re looking for those markers so they can tell themselves, ‘We can endure until then, and we’ll be a little better.’”
Gov. Asa Hutchinson set May 4 as a target date to begin easing back on restrictions in Arkansas, so perhaps that light is visible. The trucking industry, like all others, is ready for the new normal to commence, whatever it looks like.