COVID-19 | Understanding the Current Situation While Planning for the Future!

COVID-19 | Understanding the Current Situation While Planning for the Future!

Despite the downturn affecting several industries across Canada, the overall transportation capacity has decreased during March 2020. What conclusions can be drawn from this situation and what elements should be considered for a return to normalcy.

According to the latest analyses of cargo volumes throughout Canada during March 2020, there has not been an increase in available drivers even though several industries were forced to suspend their operations. Until recently, this shortage had been attributed to the lack of qualified drivers.

What Are the Causes?

Obviously, the unrelenting pressure felt by the industry to ensure availability in Quebec and Canada has mainly been caused by COVID-19. As essential workers, carriers were forced to meet strong demands since the onset of the crisis, particularly to resupply various food stores. To make matters worse, the situation caused by COVID-19 in Canada was preceded by a railway crisis that put a great deal of stress on the transportation industry even before the health crisis broke out.

Crucial Elements to Understand

Although its essential service designation allowed the transportation industry to maintain its activities, it is now faced with great instability, particularly due to high demands from the medical and food industries, which carriers must prioritize. Such a demand creates significant fluctuations in transportation supply and demand across the country. Consequently, the market is constantly oscillating between “overcapacity” and “under capacity,” creating instability in the availability of drivers and prices throughout Quebec and Canada.

How to Prepare for the End of the Crisis?

Although no one can predict the state of the Canadian and Quebec transportation market in the wake of this crisis, certain hypotheses can already be examined.

Market consolidation in favour of major carriers

The problems of overcapacity and under capacity experienced before and during the crisis have reasonably weakened an important number of small road carriers, as they already had a tough time meeting demands before the arrival of COVID-19. This is illustrated by the fact that, in recent weeks, an increasing number of small carriers have been forced to put their operations on hold. This situation opens the way for major carriers to buy out businesses faced with financial difficulties or at least lay their hands on newly available market shares.

Probable exacerbation of the driver shortage in Quebec and Canada

Since the beginning of April 2020, the poor working conditions experienced by several drivers have been repeatedly denounced by the media. Closing of rest areas, confinement inside trucks, difficulty finding food and sanitary facilities: there is no indication that the new generation will enjoy better conditions once this crisis is over.

Increased selectivity on the part of carriers

It seems clear that the difficulties experienced by the industry will give way to a sustained increase in transportation demand once commercial activities resume. Faced with this growing demand, carriers risk focusing on the cost-effectiveness of each operation, even if that means refusing shipments that require complex loading operations or involve considerable wait times. In such a situation, the optimization of shipping processes will be more important than ever for businesses worried about driver availability.

Surrounding Yourself with the Right Team to Take Full Advantage of the Market, Regardless of Its State

The help of a logistics expert is often necessary to benefit from the best shipping options available, regardless of the state of the transportation market. At G.M.R., our brokers offer transportation solutions based on your needs while taking the time to answer all your questions. Want to take advantage of our 30 years of experience in transportation logistics in Canada and the United States? Contact one of our experts now!