Ruan Deftly Navigates COVID-19 Supply Chain Challenges

May 1, 2020 By:

Just one month into the second quarter of 2020, economists are already predicting dismal gross domestic product (GDP) numbers following steady growth in 2019 and a significant decline of 4.8 percent in the first quarter of 2020—which included only a couple of weeks of COVID-19 disruption—according to early numbers from the Bureau of Economic Analysis.

Bob Costello, chief economist and senior vice president for the American Trucking Associations, anticipates that GDP could decline by nearly 30 percent on an annualized basis in the second quarter as a result of the Coronavirus and the economic shutdown. The first quarter decline and second quarter estimates are particularly hard to swallow as a tremendous end to a decade-long economic expansion that saw record low unemployment and the Dow Jones approaching 30,000 points.

While the transportation industry is certainly essential during this time—getting critical products to stores and hospitals—it is not immune to the effects of largely shutting down the country. While several sectors including food, beverage, medical suppliers, and retail are performing steadily or even above normal, others have seen rapid declines in freight demand. These include metals, food service, manufacturing, and automotive. In the last week of April, the Morgan Stanley Truckload Freight Index, which broadly measures incremental truckload demand versus incremental truckload supply, turned downward following a rapid peak caused by Americans stocking up as they prepared for the early stages of stay-at-home orders. The index is now experiencing the lowest levels since 2016, with the flatbed segment seeing an all-time low on the index.

Especially at the beginning of the pandemic and the ensuing run on stores, Ruan’s business experienced a significant surge in the grocery, beverage, medical supplies, and retail verticals. At the same time, there has been some decline in those industries that were forced to shut down.

At all times, and especially now, many shippers seek creativity, innovation, and flexibility in their supply chains. They look to partner with suppliers that share that thinking and can execute against tailored solutions. Ruan’s broad and integrated portfolio is well matched for the growing expectations of shippers and their customers. Our asset-based 3PL service offerings can accommodate changes in inventory flow and broad swings in demand. Leveraging technology and 88 years of experience, Ruan solves problems, creates visibility, adds value, and delivers on our promises. With our Dedicated Contract Transportation, Managed Transportation, Brokerage Services, and Value-Added Warehousing solutions, we are creating value when our customers need it most.

“So far, we have moved more than 150 drivers to operations where we can help sustain essential services,” said President and COO Dan Van Alstine. “Some Ruan drivers and other team members have been temporarily re-assigned to different locations, operations, and work—which we and our customers and consumers are truly grateful for. We don’t know how long it will take for things to get back to normal, but we will do everything we can to enable our people, trucks, and resources to move from customer operations where demand has declined to those where more work is available.”

Beyond June, Costello expects the third quarter to see slower declines. But by the fourth quarter, the country could begin to see some recovery if the nation’s efforts to slow the spread and cautiously reopen the economy are effective. Considering a medical solution can be found for COVID-19, like a vaccine, Costello predicts that the U.S. economy could operate at pre-pandemic levels by the third quarter of 2021.

“The future is uncertain for all of us right now. Since our humble beginning in 1932, we have lived through numerous economic crises. Through this pandemic, we will emerge stronger than before,” Van Alstine said. “We are proud of our team members’ resiliency, strength, and commitment to each other, our customers, and safety during this time. Truly, our professional truck drivers and skilled technicians are moving the economy forward and ensuring our nation has the essentials they need.”