The COVID-19 pandemic impacted just about every aspect of trucking. From staying in business to obtaining parts on time – no trucking company was untouched. In fact, the truck parts aftermarket took a particularly big hit, which led to fleets making big adjustments to how they obtain parts and conduct maintenance. And all this had to be done in a way that kept employees and customers safe.
Prior to the pandemic, the freight industry was expected to have flat-to-moderate growth. It was set to be a quite average year, with the employment squeeze still negatively impacting companies, but the pandemic upended all that. While the aftermarket parts market was going to be stable for 2020, after the pandemic, the new equipment forecast dropped by 36%.
It was during the beginning throes of the COVID-19 pandemic that motor carriers almost entirely paused their truck buying and instead focused on simply staying in business. Fortunately, as the year wound on, parts and service companies made major adjustments to help keep fleets stay afloat through the worst of the pandemic. Will some of these changes become permanent? Let’s find out.
Parts Flow Adjustments
Keeping parts on the shelves and trucks properly maintained became a huge problem for North American trucking companies in 2020. Consider that many manufacturing plants immediately shut down when the worst of the pandemic hit. Still, intermediaries and other companies involved in parts distribution stepped up to fill in the gap.
Some parts companies and trucking OEMs partnered up to concentrate their parts procurement on jobs that could be completed in four hours or less. Many fleets had to conduct targeted inventory, obtaining parts from OEMs that seemed like they would be faced with a shortage. Stocking up was a common tactic during the beginning of the COVID-19 pandemic.
It really took extraordinary levels of communication throughout the entire supply chain to ensure trucking companies stayed afloat. From top tier suppliers down to dealers and trucking companies, parts companies and suppliers seriously upped their cooperation and communication. In this environment, there were no adversaries, only partners.
Another example of businesses taking major steps comes from Phillips Industries shut down its entire operation in April of 2020 while they completely reconfigured their entire manufacturing and parts flow supply chain. The company would end up changing everything, from how employees interact with each other to how employees worked the production line.
From adding plexiglass dividers between workstations to stopping production at timed intervals to clean all the equipment, they were among the companies who took drastic measures. In many cases, companies would see abnormal orders as trucking companies prepared to weather the pandemic, and they adjusted to fulfill these orders. Trucking companies themselves had to get very creative and make big changes to improve shop productivity.
Technological Solutions to the Rescue
Other OEMs and parts suppliers also fell back on technology to beef up their operations and shore up the parts supply chain. From data visualization to dashboards and web-based portals, many parts suppliers beefed up their real-time information supply to their clients. Throughout the entire pandemic, OEMs made major improvements to impacted customer indicators, such as the order fill rate.
Others made big investments in online ordering. As businesses went remote and everyone went home to work, existing e-commerce parts suppliers saw big upticks in orders. For these companies, the first few months of the pandemic were record-breaking. And it wasn’t because of parts hoarding, it was because of strategic ordering on the parts of their trucking clients.
Software companies and fleet management systems vendors also made big changes to their systems and offerings. As the needs of trucking companies changed to accommodate problems brought on by the pandemic, SaaS and web-based software options changed with them.
Yet, it wasn’t just software and supply chains that were rejiggered to account for the new pandemic paradigm. Parts suppliers and other operators keeping trucking companies afloat also focused heavily on their service offerings, adjusting them to account for the changing dynamic of parts ordering in the supply chain.
Changing the Service Game
Being able to find and order the right parts was just one half of the pandemic prioritization supply game. Parts servicing also underwent a big evolution. Because it is important to note that having the right parts in stock is only part of the equation. Trucking companies must also be able to continue troubleshooting and repairing their vehicles.
Many parts suppliers moved their entire catalogs online, as one example of the service shift. Suddenly, dealers and trucking companies could access parts catalogs not just for ordering, but also for service procedures, schematics, parts plans and so much more.
Other companies also made big changes in how transparent they are within their own parts ordering process. Some companies who offered upgraded portals for trucking companies to monitor their trucks remotely, connect to catalogs, and access e-commerce systems. Whether it was better information for diagnostics or fault codes – managing repairs internally and communicating with dealers remotely became the norm for many companies and their partners.
Online training also became far more prevalent. On-demand and virtual training programs were implemented and updated. Prior to the COVID-19 pandemic, virtual training was not high on many supplier’s priority list. A lot of growth has occurred in digital, online, and service activities because of the pandemic, and for many these changes are permanent.
Preparing for the Future
With 2021 almost half over, many companies are looking ahead to how they will continue to operate as the pandemic recedes. Many will likely keep a lot of the successful policies and changes that came out of the pandemic. In the end, it will be about finding the right balance for the customer and for the supplier, and a lot of this will center around face-to-face and digital communication.
Many will be focusing on technological changes to propel future initiatives. In many ways, technology can be used not just to help fleets self-diagnose, but also properly train truck drivers, and provide necessary information and knowledge.
Both suppliers and trucking companies will also have to remain permanently flexible. Many trucking companies have become used to the new services provided by parts suppliers. Operational flexibility is key to staying successful in a dynamic transportation sector.
Companies have also put a renewed focus on management. There are a lot more eyeballs paying attention to having the right mix of parts on hand and determining the proper level of safety stock to carry. After all, you never know when there may be additional supply chain disruption. It’s important to remember that the COVID-19 pandemic is still with us. Speaking of which…
The Pandemic Drags On
The big question right now is for how long things will remain as they are. Many industry insiders say that the direct impacts of the pandemic will be felt over the course of at least three years. This means we won’t see things return to complete normality until perhaps 2023. Parts shortages and tight inventories may just very well be here to stay.
Despite all the changes OEMs, dealers, and trucking companies have made to accommodate the new pandemic situation, the trucking sector still suffers from major parts shortage problems. Fleets both large and small continue to report delay in new truck deliveries due to parts shortages. Raw materials and other commodities are also suffering from major bottlenecks.
So, as you can see, it is more than just maintenance impacted by the supply chain squeeze. In many cases, fleets are having trouble even procuring new vehicles. During a time when trucking companies are more needed than ever to transport vaccines and other medically essential goods, being unable to obtain new vehicles can be a major problem, and not just for the trucking operators themselves.
Another big problem is the chip shortage. It has been well reported on that there is a semiconductor shortage across the globe. It is so acute a problem, in fact, that the Biden administration has included $60 billion in their latest infrastructure plan to go to semiconductor research and development. This effort will focus on public/private partnerships.
The fact is we simply don’t know when the pandemic will ‘end.’ It could very well be with us for quite some time. This situation will force trucking companies, parts suppliers, and maintenance vendors to get a lot more creative in how they get the job done. If there is a filter shortage, trucking companies will have to get more aggressive in limiting miles. For tire shortages, companies may need to keep tires on trucks a bit longer than they are used to. Will some of these changes be permanent or will we go back to normal by 2023? At this point, only time will tell.