ANYA SCHULTZ, HOST: China has come to be known as “the factory of the world.” The coronavirus pandemic has widely impacted manufacturing there, and reduced trade worldwide. The American Association of Port Authorities says the volume of cargo – products like toasters, blankets, and iPods coming out of China – could be down by at least 20 percent. As Tay Glass reports, the drivers that carry these products are beginning to feel the pinch.
(SOUND: Truck engine turning off, followed by sound of the parking lot)
TAY GLASS: Richard Resek is in the parking lot of a truckstop near the New Jersey port. It’s packed with semis. It’s Saturday, a planned day off work. But Resek has already had a number of unplanned days off this week. He’s meeting up to commiserate with a couple of other truck drivers over coffee. Resek is worried about the coronavirus - not the actual illness - but what it means for his work.
RICHARD RESEK: What’s at stake is I could lose the truck. If I lose the truck, I won’t be able to produce any money, and then I’ll lose the house, my car, I’m still making payments on that. So it’s a chain reaction, when it’s slow at the pier, when China gets affected it affects us blue-collar workers - truck drivers and longshoremen and people involved with the piers.
GLASS: Factories in China take about three weeks off for the Chinese New Year. So truckers know to expect less work around this time. But this year is different.
RESEK: But it was slow previous before that too because of the Trump tariff and the trade war with China. And next month is going to be even slower.
GLASS: Resek says as a result his pay has been cut in half. Truckers usually get paid by the load. Less shipments from China means they’re getting less work. And the trucking companies they work for have reduced their shipping rates, in order to stay competitive. Reduced rates means reduced pay.
RESEK: We’re getting less work, working less days, and getting paid less for it.
GLASS: These giant shipping vessels out of China take a while to reach our shores - up to three or four weeks. And because international shipping takes so long, the effects of a disruption like coronavirus move slowly around the world. Even though we’ve known about the virus for over a month, truckers are just now seeing the effects.
DEAN CROKE: There's no real precedent for this in our data. It's a sort of, we're in uncharted territory right now. And it's changing every single minute that we talk.
GLASS: Dean Croke is with Freightwaves, a company that tracks and analyzes freight data in almost real time. He says the coronavirus is different than past disruptions like Ebola or SARS. But he says one thing is clear. This is the perfect storm for truck drivers.
CROKE: We're already seeing record levels of bankruptcies over the last 18 months.
GLASS: Croke says first there was the trade war, then the Chinese New Year, and now the coronavirus. In the first three quarters of 2019, nearly 800 trucking companies closed down. That’s double the rate of closures from the year before. As for American consumers and businesses -
WILLY SHIH: Everybody says, I see a shortage coming. So I'm going to order more.
GLASS: Willy Shih teaches business management at Harvard Business School. This panic buying by consumers will eventually be good for truckers, but it will come with challenges.
SHIH: But those orders for more masks or those orders for more shipping containers. aren’t going to show up for another four weeks, okay. And meanwhile, people will continually kind of panic and continue to order more and continue to order more and continue to order more and then they won't see anything coming in.
GLASS: Until China’s production gets back to normal. But Shih says that could take a few weeks.
SHIH: All those orders that they placed during that period of panic will come crashing onto the beaches.
GLASS: But at that point, truck companies and the people that work for them might already have moved on. As for Richard Resek, if this slowdown continues much longer, he says he might have to find other work.
RESEK: I was thinking about going, doing Uber again. I was doing Uber before I was doing truck driving, making some money off of that.
GLASS: With a job like Uber, Resek would have more control over how much he drives.
Tay Glass, Columbia Radio News.