Layoffs start rippling across freight industries
As the impact of COVID-19 quickly spreads through the economy, layoffs are becoming a common theme for workers. Those in the freight businesses are no exception.
According to reports, Total Quality Logistics (TQL) and Freightos are among the businesses in the industry that have conducted layoffs in recent days.
Freightos reportedly let go fewer than 50 people, the report said. TQL has more than 5,000 employees globally, and a source within the company told FreightWaves that a large number of employees were told they were “not hitting effort goals” and were let go. The source indicated the reasoning was to hide the fact that the company was conducting a large nationwide layoff.
FreightWaves emails to TQL for comment have not been returned.
A Freightos spokesperson confirmed the company conducted layoffs but did not specify how many. The layoffs took place on the Freightos.com marketplace side, he said, and did not affect the WebCargo, eBooking, or logistics sales digitization platform.
“COVID19 is hitting both the supply chain and financial ecosystem particularly hard,” the spokesperson told FreightWaves in an email. “We’re proud to have built an impactful technology company playing a vital role in supporting carriers, forwarders and importers. To ensure that we can do so for many years to come, we regretfully are forced to consider downsizing part of our team.”
The statement went on, “WebCargo and Freightos.com remain strong companies [with 200-plus employees around the world]. This is a pivotal moment for digital air cargo, as capacity and prices fluctuate rapidly. We’re also seeing heightened activity on Freightos.com as companies adjust to new supply chain patterns. That said, we anticipate financial markets seizing up and are displaying extra precaution with our financial reserves.”
Truck drivers are also likely to be affected as retailers shut down locations. Macy’s, Nordstrom, Nike and Apple are among the big retailers that have closed their stores, and entire malls in some areas are closing. The restaurant industry has been especially hard-hit so far, with many states, including most in the Northeast, shutting down dine-in experiences and allowing only carry-out and delivery orders.
Rumors that Sysco (NYSE: SYY) and US Foods (NYSE: USFD) drivers could be victims of layoffs circulated on Wednesday. The extent of those layoffs is not known, but both companies are heavily involved with servicing restaurants. Sysco is also a big supplier to colleges and universities.
When contacted by FreightWaves, a Sysco spokesperson said, “We are not conducting any interviews or commenting on COVID-19 at this time.”
Sysco is a large global distributor of food and related products to the foodservice industry. The company delivers to over 650,000 customer locations and had sales of $60.1 billion in 2019. The company’s annual report said that 62% of the company’s sales come from restaurants. It has approximately 8,500 tractors.
Requests for comment directed to US Foods on any possible layoffs have not been returned.
According to the Federal Motor Carrier Safety Administration’s SaferWeb, US Foods has over 4,100 drivers and 4,000 power units.
Sysco’s stock is off 20% in mid-day trading and US Foods has fallen more than 30% as of 1:30 p.m.
Layoffs are expected to accelerate quickly across the nation. U.S. Treasury Secretary Steve Mnunchin reportedly told GOP senators on March 17 that the nation’s unemployment rate could climb as high as 20% without government intervention. Investment firm UBS found that 24% of employers plan to downsize if the outbreak worsens. That survey was conducted March 7-13, and the outlook has worsened since then, with more than 6,000 confirmed cases of COVID-19 now and that number expected to rise dramatically in the days and weeks ahead.
Connecticut and Michigan are among the states that have seen unemployment claims spike, with more than 25,000 Connecticut residents filing since Friday, March 13. The state usually processes about 3,000 claims per week. Michigan officials said claims jumped to 5,400 on Monday, March 16, whereas a typical Monday would be between 1,300 and 1,600.
© 2019 Worldfreightrates News