Struggling Trucking Companies May Not Survive Once PPP Runs Out, Says Analyst

[Mike]

Industry analysts say that struggling carriers may not survive once the government’s Paycheck Protection Program funds end.

On Tuesday, Freightwaves released its June Market Update Webinar. Hosts FreightWaves’ Director of Freight Market Intelligence, Zach Strickland, and Economist, Anthony Smith discussed the state of the industry.

During the Q&A session, Strickland was asked, “When PPP loans run out, do you expect an uptick in trucking company failures?”

Strickland said that PPP loans essentially sustained struggling companies. He said that if the trucking companies were struggling before PPP, they likely didn’t fix the issues and once the money runs out, they’ll be facing the same issues.

Struggling Trucking Companies May Not Survive Once PPP Runs Out, Says Analyst

Industry analysts say that struggling carriers may not survive once the government's Paycheck Protection Program funds end.

cdllife.com

 

[Mike]

Lots of truth here.

If a company was relying on the PPP funds to survive, this means they had no freight to keep their drivers moving.

If they weren't using these funds to compensate their drivers, they likely have less drivers as the freight comes back.

In all honesty, most of the freight never really left. Some did, much was still there, but shippers/receivers had the ability to hold off on it unless it was cheap enough to get at a great deal.

That said, outside of a couple weeks of nonsense, the freight was out there to be hauled. Might not have been at the premium rates, but it was there, and carriers could have chosen to roll with the markets and earn as much revenue as possible.

For those that didn't, particularly in the dry van world, I thank you. I had about two weeks of crap rates, managed to make the best of a bad situation, and fought through it. profits might not have been desirable, but expenses were still covered because they never go away. You sitting, helped me get better rates. I never operated at a loss.

I got PPP, but not like those companies that have employees and were able to get a huge forgivable loan.

I needed the PPP because I was blessed with an engine failure right in the middle of this nonsense. That said, without it, I still would have survived. Having it took much stress off of me, though.

From there, I recouped, regathered, improvised, adapted, and overcame.....

I worked through the low rates, and now into the high rates, knowing that the high rates are likely temporary as the economy still has a long way to go to recover from coronavirus.

Now, I am very much blessed, and humbled, to get an EIDL loan. This one has to be 100% paid back, but it allows me to go 100% out of debt other than the loan itself. Truck and trailer will be paid off, I will continue to work as though those payments are still there, as I anticipate more hard times to come because of this virus.

This virus has killed many businesses. I was at the point where I thought it might get mine as well, but for now, it looks like I will be OK. I will keep praying, though, because I know it wasn't me that got my family through this.

 

[mndriver]

You’ve still been operating at a loss. As have many companies.

alll there is to it.

I know the loads we’ve been getting are crap rates. Most are break even but not by much.

 

[Mike]

You’ve still been operating at a loss. As have many companies.

alll there is to it.

I know the loads we’ve been getting are crap rates. Most are break even but not by much.

There was about a two week stretch where I operated at break even, and a couple loads where I was at a loss. Other than that, I covered expenses and put a little in my pocket during the worst stretch.