Of little surprise, the number of failures by trucking companies in 2020 jumped compared to years prior as the economic effects of the COVID-19 pandemic and associated shutdown orders converged on fleets’ operations and per-mile spot market rates plunged, according to transportation-focused economic analysis firm Broughton Capital, which tracks annual motor carrier failures using debt and default data.
“What happened is simple — in late March and early April, we had rates plunge to levels below what the variable costs to operate a trucking company are,” said Donald Broughton, principal and managing partner of Broughton Capital. “Rates fell below the cash costs of operation across all modes. Secondly, there weren’t any miles to run. It was like being stuck on a desert island, and saying, ‘Well, we only have celery to eat, and not much of it.’”
