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Dec 30

Rise in Freight Carrier Charges during Pandemic

Pandemic is a difficult time for logistics and transportation. Many economic activities have been reduced during COVID-19 pandemic. The GDP of USA has been declined by 1.2 percent during this span of time in first quarter of 2020 that has risen up the unemployment by 14.7 percent in April not only this, the GDP has not been increased in successive quarters as well. Freight companies are responding are preserving cash, adjusting the size, creating workspace and providing humanitarian to meet the continuous demand and expectation of their customers.

All carriers have not been affected equally by this pandemic. The demand of freight carriers has been varied as compared to last year. The volume of trucks has been increased by 30 percent in 2020 and a panic buying was noticed for the trucks. This truck buying then suddenly dropped and is now rising up again. The volume of railroad has been declined by 20 percent and not recovered so far and the ocean shipping has been decreased by 25 percent.

Several Cargo Modes

During pandemic and hammered economy the consumer demand has been weakened. Here we are going to discuss the freight rates of airplanes, rail, trucks and ocean.

Air Cargo Rates

Air cargo has been most volatile shipping mode in 2020 as most of the flights remained cancelled. The government and private sector organizations shipped the personal protective equipments via air. Rate of air freight carrier increased during these days as there was no option for shipping and all passengers were not taking the flights and bookings were also cancelled.

Ocean Carrier

Ocean transport has also been affected during pandemic. They have tried to match the increasing demand of service. The carriers are increasing capacity and in peak season the capacity will grow expectedly. As per experts the ocean shipping will surely rise.

Truck and Rail Carrier

Truck rates have risen due to low employment. The shippers are choosing intermodal rather than the trucks based on the market conditions. The price of diesel is low and trucks are competing with intermodal due to decreased fuel price. Lots of freight was moved and less truck drivers were present.

The two different measures of rail carmodal and intermodal had to be noticed to know the real rate change of rail freight. Throughout the pandemic the rate of carmodal has been flat as carload is mostly tied to the industrial economy. However, the carload rate will go up but not too much.

Final Words

For wholesalers, manufacturer and retailers the freight charges are quite important to perform their business operations smoothly. Many times the merchant does not know the freight carrier until he receives the bill from his transporter. This freight cost is quite uncertain and depends on several factors. The cost of fright carrier depend on fuel cost, commercial rate or changes of labor, vehicle capacity, customer loyalty and many more.

These factors can cause rise in carrier charges as well and during pandemic many of these factors including government regulation has contributed rise in charges of carrier.

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