How Will COVID-19 Impact Freight Budgets? And a Stress Test Quiz

May 6, 2020

Over the past couple of weeks I've received a bunch of calls and emails asking for our insights on how the COVID-19 crisis will impact transportation budgets for the remainder of the year. In responding, we recommend that shippers do three things that will help answer this question for your company.

First, it is important to understand how the COVID-19 crisis is impacting carriers across the different modes. To help make this as convenient as possible, download our Transportation Industry Overview. We’ve received very positive feedback because the overview has information about the various cost drivers that will affect carrier rate structures, and your freight budgets for the remainder of 2020.

The second thing you need to do is to get your team together and decide which post COVID–19 recovery scenario is appropriate for your company. To help you address this issue, check out this article  "Three Scenarios to Guide Your Global Supply Chain Recovery." that was recently published in The Harvard Business Review by our friend, David Simchi-Levi.

This article addresses the possible scenarios coming out of the post COVID-19 crisis and the impact that different scenarios will have a direct impact on your freight budgets. For example, a “V” shaped recovery scenario will likely mean a capacity crunch, and sharply higher rates, similar to 2018. Conversely an elongated “U” or recessionary scenario could result in stable or even lower rates.

Finally, we encourage shippers to also follow David’s advice from another recently published article, and stress test your supply chain. Practically speaking, this may help you identify the “what if something goes wrong” vulnerabilities in your supply chain. Since these vulnerabilities could directly impact your freight costs, it is important to identify them and be aware of how they could potentially impact your operations and bottom-line profitability.

We've also recommended that you go to our COVID-19 Update Center for Shippers where we have aggregated a wealth of information that address the pandemic’s current impact on shippers, and transportation providers for the remainder of 2020. 

Not sure where to start? We can help. Take our Supply Chain Spectrum Survey. This survey will help you determine how your company values its supply chain and stacks up compared to over supply chains. Or contact us for a Rapid Assessment. Our process has proven invaluable in helping companies design strategies for success that can help them not only during crises like we are experiencing now, but at all times.

To get started, just give us a call at 630-833-0890 or send us an email at