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The State of Freight Today (Coronavirus Effects)?

ATeam

Senior Member
Retired Expediter
Offline
As former expediters, now retail business owners (gym), Diane and I are looking to EO to get a better sense of the true state of things. We realize we're in the midst of rapidly developing and rapidly changing pandemic situation. Still, the state of freight has always been a good economic indicator. Are expediters busy? Slow? Some busy, some slow depending on the kind of freight you haul?

In our gym business, about half of the Anytime Fitness gyms in the U.S. have been closed by government mandate. Our gym is still open but we would not be surprised to be closed by the state. That's quite something; being legally prohibited from operating a gym, but legally required to pay your ongoing bills. And we have staff to think about too. All the big-box gyms in our area have closed. They all laid off their staff. Diane and I are disinclined to do that. We want to keep our great people close and employed for as long as possible. While we remain open, sales have slowed. People are scared and are purchasing less than before. Gym use continues at about 80% of normal levels. Because we're a small gym, we can practice social distancing and virus mitigation in ways the larger gyms cannot. Understandably, certain people in high-risk categories are staying home. We have a way to work with members online, so even if the gym is closed, we still have one profit center to focus on.

At present, the general public conversation seems to include an underlying assumption that things will get back to normal at some point, after the virus moves through. I'm thinking different. I'm thinking the impacts are already so profound that fundamental assumptions about our economy, our way of life, the role of government, the way we do business, etc. will change.

Logistics-wise, we saw the shortages coming and stocked up early on toilet paper, hand soap and hand sanitizer, so we're in good shape. We've been able to order all other goods and all have been promptly delivered by UPS, FedEx, Amazon Prime and the occasional "off-brand" truck. We have a heavy load of carpeting on order (club remodeling coming soon). Unsure how current conditions will affect that delivery. We had plans to order in new, heavy-freight fitness equipment as part of our expansion but that's on hold for the moment.

With many thousands of gyms of all brands closing or being forced to close, that's going to have an impact on freight. So too with restaurants, trade shows, schools and everything else that is closing. Expediters are closer to the front lines of the economy than anyone we know. What are you experiencing? What is your response? What is your economic outlook (not political outlook please)? Do you expect to be in business in 30 days? 90 days, 365 days? Do you expect to be flush with cash as you meet the nation's expedited freight needs? Are you staying home to avoid becoming sick and alone out on the road?
 
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piper1

Veteran Expediter
Owner/Operator
Offline
I can say this Phil, I have gone into a cash protection mode. I have always believed in having a substantial cash buffer and good credit availability so you can ride out any sudden things. This however while sudden to appear is likely going to affect things for a while so I am preserving cash as much as I can.

Things seem to change day by day and everything is VERY dependent on rates. I will not burn through my cash just to stay running.

I was kind of surprised Anytime didn't tell all thier gyms to shut.....with a press release using the phrase "out of an abundance of caution". If that was the phrase for a drinking came the whole world would be completely drunk by now.
 

Worn Out Manager

Veteran Expediter
Owner/Operator
US Air Force
Offline
Let me correct the "I don't know" portion of my reply. being that I am sitting in Boise Idaho looking for freight and seeing one state after another such as California restrict businesses from even opening their doors, I wonder if I don't find something to deliver that is considered a health emergency delivery I may have to rent an apartment here.

Sent from my moto z3 using EO Forums mobile app
 

coalminer

Veteran Expediter
Retired Expediter
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Well now the state of Florida has said all restaurants must close dining rooms(take out and delivery only) and all gyms to close.
 

ATeam

Senior Member
Retired Expediter
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Well now the state of Florida has said all restaurants must close dining rooms(take out and delivery only) and all gyms to close.
That is correct. By order of the governor, our gym was closed Friday afternoon. On Saturday, normally a busy shopping day, our strip mall parking lot was empty. While many of our neighboring businesses were not required to close, most did, because nobody was coming.
 

piper1

Veteran Expediter
Owner/Operator
Offline
Bright side, at least you can put the carpet down now without disturbing your membership (if it shows up).
 

davekc

Senior Moderator
Staff member
Fleet Owner
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Freight is steady with relief freight but waiting for the show to drop. Did some entertainment stuff and that came to a stop. Will resume, but no.idea when. We are in good shape but have concerns for others if it is stretched out over a good stretch of time.
 
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Bruno

Veteran Expediter
Fleet Owner
US Marines
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Things was just starting to pick up for us until the shutdowns came. We lost two teams from it. New drivers for us can't even go to class at our carrier until April 13th. I pray that no expedite driver gets sick from this nasty stuff.
 
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ATeam

Senior Member
Retired Expediter
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The FL governor closed all gyms on 3/20. On 4/1, he issued his "Safer At Home" order which restricts everyone to staying at home for 30 days. There are exceptions for essential activities and services. The list is quite broad (healthcare workers, first res ponders, financial services people, realtors, truckers/delivery, construction workers, IT people and many more. But many other people (including Diane, me and our gym staff) are "safer" at home -- restricted there -- for 30 days.

We are adapting by developing a new profit center with which we provide personal training online. We were pleasantly surprised to find our in-gym training clients willing to move online. Our staff are all equipped with iPads and other technology to provide this service from their homes. We'll be having virtual staff meetings instead of face-to-face. It's different, but at least we have something positive and potentially profitable to do while we're shut down.

The governor's order is effective for the full month of April, which means we will be ordering NO supplies for the closed gym. Our strip mall includes a number of businesses now required to close for a full month. They also will order no supplies or inventory. Restaurant take-out is still allowed but none of them are doing well with that. In good times, take-out is 5-10% of a sit-down restaurant's business. Our chamber of commerce tells me that number has increased to 10-15% but that's nowhere near enough to keep a restaurant afloat. Our mall includes two department stores that have been closed for some time.

These increasingly common state-wide shutdown orders are literally shutting the economy down. No one has seen anything like this before. It's hard to determine what comes next. Still, we have to do exactly that if we are to develop a plan to survive. Hope is not a strategy. Life rewards action.

With that in mind, and to that end, we are using the IHME COVID-19 projections. The accuracy of their charts can be debated but we know of nothing else out there more useful for planning purposes.

The Florida chart tells us our COVID-19 peak will come around May 3 and the zero-new-cases count will appear around July 1. We expect the governor's order will be extended beyond it's present expiration date and lifted sometime between those two dates. The exact date is anyone's guess. Our worst-case scenario is the economy will remain shut down through July 1. The better-case scenario is the order will be lifted soon after the peak. But either way, it's bad. And when the economy is permitted to function again, we'll likely be in a deep recession. It's not like you can turn things back on by flipping a switch. When the surviving businesses reopen, it's going to be slow for a while, maybe a long while.

Optimists are already talking about pent-up demand and a rapid economic recovery. That assumes consumers will have money AND will be willing to spend it. With the shock therapy now being administered and more to come, I'm thinking the consumers who have money will be disinclined to spend it. And those who do not have money will be inclined to build their savings. Veterans of the Great Depression remained frugal for the rest of their lives. Veterans of the 2020 pandemic will be inclined to do the same, I believe. They will never again want to be caught without financial reserves.

As Diane and I navigate our way through this, I am mindful of the 2008 crash, during which we were expediters. Major companies were going broke and closing down at breakneck speed. But as those freight sources dried up, and as numerous expediters got out of the game, we were able to prosper. That's because enough freight remained for the smaller number of drivers and carriers still available to haul it.

We're telling our staff, "as with freight, so too with gyms." While the shutdowns and recession will greatly reduce the number of people who are ready, willing and able to pay for personal training (online now and in-person later), enough remain to keep us busy and afloat. Some of our competitors will not make it, leaving us to pick up the training clients they no longer serve. We're also excited for the future because our new virtual-training profit center will continue to add new revenue to the business, after in-person training resumes when the gym reopens. When we re-open, we will have more training clients than we had when the governor shut us down.

If Diane and I were still truckers, we'd likely have the same attitude and outlook. We'd expect to succeed and look for ways to make that happen while other drivers and carriers prove to be less resilient. It has been coached many time on this fourm and other EO resources to keep your rigs well maintained and your financial reserves adequate. In small businesses of all kinds, it has always been a best practice to maintain reserves. Those who did will be among those still standing after the virus burns out.

Having now been in the health and fitness business for a while, Diane and I have learned a thing or two about that. If we got back on the road again (not the plan), we would work very, very hard to maintain our health. That includes getting good sleep, eating healthy and getting good exercise. All of this keeps you safe and healthy. It's even more important these days as sleep, nutrition and exercise boost your immune system. It helps you resist the virus in the first place and helps you fight it if you get infected. Knowing what we know now, Diane and I would likely decline more loads than we did before, so we could invest more time and energy into our health.

With all this said, I must confess Diane and I are missing our truck these days. You expediters remain free to move about because you provide an essential service. We loved living in the truck, which can serve as a self-contained survival pod in addition to providing a revenue stream. And you still get to see new sights every day and drive on the open road; experiences we fondly remember and dearly miss. It's a simpler life too. You can take time off whenever you want. And when things slow down, you don't have to worry about employees whose jobs you want to save, or a commercial-space landlord who still wants rent, even while the governor prevents you from opening your doors.
 
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Tennesseahawk

Veteran Expediter
Offline
Not to make this political, but I'd like to see in his Safer at Home order the part where Congress and the President suspended the 14th Amendment's right to travel. I suspect the governors are pushing their "rule of man," and worrying about the "rule of law" later.
 

davekc

Senior Moderator
Staff member
Fleet Owner
Offline
Having a gym right now is a tough gig but doing online training is the best option if you have to stay closed. No easy answers. I know zip about the gym business but my entrepreneur spirit would be to hire trainers from Molly Browns. Lol Hang in there, it will be like expediting past. Stronger ones will be here next year.
 
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