'Overnight, mine and thousands of others' lives fell apart': Coronavirus just crashed a critical survey of trucking outlooks to an all-time low, and it's a chilling sign for the economy
- The demand indicator on Bank of America's Truck Shipper Survey hit a record low last week, shortly after 80% of trucking stakeholders told Morgan Stanley that coronavirus is affecting their businesses.
- Truck drivers who work for small businesses or own their own businesses are scrambling, too.
- These struggles in the $800 billion industry point to looming problems in the macroeconomy.
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David Nobles, a truck driver in Central Texas, was getting his life in order. He had just gotten married, bought a new truck, and was working out a loan to build a new home.
Then, coronavirus hit - forcing everything from conferences to concerts to be canceled. Public health experts have deemed these cancellations necessary to squash the spread of coronavirus, but it's a major threat to service-oriented industries and the people who work for them. Nobles was one of those people, and suddenly lost his job transporting band and stage equipment.
"In an overnight frenzy, the whole touring industry came to a halt," Nobles told Business Insider. "Singers, comedians, sports, everything that involved touring. Our shows have been canceled and or postponed until at least the end of the summer."
That means the supplier he worked for had to let the entire transportation team go.
"Now, I'm left picking up the pieces - trying to keep my new wife happy and trusting in me that I'll find another job," Nobles said.
Nobles is one of many in the industry experiencing the same struggles. Across the board, trucking executives are sounding the alarm on how coronavirus will affect their business, according to the Bank of American Truck Shipper Survey released Friday.
The survey hit an all-time low for shippers' view of near-term demand, which covers the next three months, since it launched in 2012. The indicator dipped 10% from the prior survey, "highlighting the deteriorating demand environment as the COVID-19 virus spread," wrote Bank of America analyst Ken Hoexter.
Some truck drivers are putting in overtime; retailers are demanding more and more supplies as panic shoppers ransack shelves for supplies. Online orders are also set to increase, with Amazon hiring an additional 100,000 warehouse workers to keep up with "unprecedented" demand.
But others, like Nobles, have lost their jobs or are seeing demand peter out, as truck drivers move much more than just retail goods. They're involved in hauling everything from crude oil to vehicles and home-building materials - all sectors of the economy that are forecasted to falter amid coronavirus.
Do you work in the trucking industry? Email rpremack@businessinsider.com with your story on how coronavirus is changing your work.
A March 11 Morgan Stanley survey of 350 freight-transportation stakeholders shows building concern, too. About 80% of those surveyed said coronavirus is affecting their business, up from 60% two weeks prior. Still, many reported that impact to be "low" as of last week.
That leaves truck drivers like Minnesota-based Chad Childress, who hauls wheat, corn, and other agricultural products, feeling out of options. Some 300,000 to 400,000 truck drivers own and operate their trucks, meaning that they don't have much protection if rates or demand fall.
"With all the talks in the news from the president about help for working families affected by the outbreak, there hasn't been any talks about the owner-operator with one truck and a family," Childress said. "Where does that person turn to for aid during this time?"
Why the trucking industry points to where the rest of the economy is headed
Trucking is often looked at as a leading indicator of where the rest of the economy is headed. As 71% of America's freight is moved on trucks, companies foreseeing the need for fewer trucks is typically an omen of an economic downturn: If manufacturers are producing less and people are buying less, there's less of a need to move goods.
"Because trucking participates in all phases of manufacturing, it increases as manufacturing starts to ramp up, giving it leading indication on economic growth," Steve Tam, the vice president of ACT Research, previously told Business Insider.
When the rest of America is headed for a downturn, freight usually dips first, a 2019 report from Convoy's economic research division said. The industry went into a recession in April 2006, more than a year before the rest of the economy was clobbered by the Great Recession of 2008.
Freight has been in a downturn since late 2018 or early 2019, according to various experts. In the first half of 2019, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That's more than triple the amount of bankruptcies from the same period last year - 175.
Many predicted before coronavirus slammed the overall economy that trucking would not pull out of this recession until the second half of 2020. But now, instead of a recovery, analysts like Bank of America's Hoexter believe there's "a sharply rising risk of recession."
That not only affects people like Nobles, but the industry as a whole.
"This is hard," Nobles said. "Overnight, mine and thousands of others' lives fell apart."
Do you work in the trucking industry? Email rpremack@businessinsider.com with your story on how coronavirus is changing your work.