Curbed by Coronavirus, China’s Truckers Can’t Wait to Get on the Road Again

Date: Thursday, March 5, 2020
Source: The Wall Street Journal

Millions of truck drivers are being kept off the road, hampering efforts to get the world’s factory moving again

HONG KONG—China has long relied on its 30 million-strong army of truck drivers to keep its economy moving. Now, the coronavirus is keeping half of them off the road.

Some can’t leave home because of city lockdowns, while others have been quarantined after delivering supplies to areas hit by the epidemic, freight company workers say. Many cities have also banned trucks licensed elsewhere in the country from entering their territory for fear of spreading the virus.

That is slowing deliveries of everything from farm produce to auto parts—hitting both Chinese and global consumers—and hampering efforts to reignite an economy already hit hard by the outbreak.

Liao Shiqing is one of the millions of truck drivers waiting to get on the road again. He was among the hundreds who volunteered to deliver supplies to Hubei province, the epidemic’s epicenter. However, when Mr. Liao returned last month from Xiaogan—a locked-down city of 5 million in central China, about 40 miles northwest of Wuhan—he faced two weeks of quarantine in a government-mandated hotel.

It is a necessary precaution, Mr. Liao said by phone from his hotel room, but it is frustrating efforts to get China’s logistics back to normal.

“So many drivers are still at home,” said Robin Zheng, the owner of Circle Logistics, the Chongqing-based haulier that employs Mr. Liao. Mr. Zheng estimated that national trucking capacity was at a third of normal levels at the end of February. “They can’t leave; they’re just waiting for their local government to give them the green light.”

Travel restrictions introduced in January to help curb the spread of the virus—which has 

infected more than 80,000 in mainland China, leaving 2,981 dead as of Tuesday—have crippled Chinese companies, with millions of workers unable to return to offices or factories.

They have also hobbled a trucking system that moved about 73% of all goods in China in 2019, according to the National Bureau of Statistics, eclipsing air, rail and waterborne freight combined. In the U.S., about 70% of goods are moved by road.

The breakdown’s knock-on effects are vast: seaports have become clogged with containers that can’t be moved; factories lack parts for production and can’t ship out finished goods; even attempts to shift cargo onto river barges or railroads have largely been thwarted because trucks are still needed for last-mile transit.

There is also been a global ripple effect, given the world’s reliance on goods that are made in China.

Logistics costs have also soared. Transporting a shipping container 1,000 miles by road from Chongqing to Shanghai normally costs around $1,500; now, if you can find a truck, it will cost you $3,000, said Mr. Zheng.

There are some signs of improvement. Trucking capacity in southern China has rebounded to 60%, according to shipping company A.P. Møller-Mærsk A/S. A new online system enabling truckers to apply for permits to clear checkpoints in some regions has removed one significant blockage. Even so, things won’t be back to normal for weeks, Mr. Zheng said. About half of China’s truckers have yet to return to work, according to people at local and international freight companies.

Mr. Liao and his colleagues usually deliver supplies to factories run by Apple Inc. supplier Foxconn Technology Group and U.S. glass-display maker Corning Inc. in the western Chongqing-Chengdu region. They then transport finished products to Shanghai and other major seaports for shipping abroad.

As an army veteran, Mr. Liao felt duty-bound to join the “people’s war” against the virus, as Beijing has framed it. He agreed to undertake emergency delivery jobs linked to fighting the epidemic, with his first a 2,200-mile round trip to collect materials for face masks and deliver them to a repurposed textile factory.

With most service stations closed, he ate instant noodles and self-heating rice and sang to himself to alleviate boredom. The trip took five days.

He then volunteered for the Hubei job, telling his wife—but not his parents—where he was headed. When he got to Xiaogan, it was a ghost town.

“It felt like this really was an empty city,” Mr. Liao said, recalling his shock at the near total silence he encountered beyond the ring of security that cut off the city.

The 31-year-old is often away from his wife and daughter, but the coronavirus has tested his resilience.

“I haven’t seen my family for almost a month now,” he said.

His quarantine is due to end later this week and he hasn’t shown signs of infection. Still, he doesn’t plan to go home immediately for fear of endangering his family.

As a company employee, Mr. Liao earns a regular salary of roughly $800 a month. But he is a rarity: Most Chinese truckers are independent contractors, according to Mr. Zheng of Circle Logistics. They earn cash-in-hand for each job, and most work notoriously long—and dangerous—hours to pay down loans taken out to buy or rent their rig.

That fragmentation has left China’s logistics system especially vulnerable to disruption, said George Sun, managing director at Shanghai-based Qianming Consulting.

Where companies like Circle Logistics, which employs 100 truckers, can organize their workers and draw on government contacts to secure permits, many individual drivers have been swept up in the lockdowns that are affecting much of China.

Mr. Sun thinks more trucking companies will be established after the crisis, and that rail—mainly used to shift bulk commodities rather than factory supplies—could also be used more widely.

Mr. Liao—suffering from a weak stomach and bad back after a long time on the road—thinks the epidemic has highlighted truckers as a critical cog in China’s economic machine.

“I hope the interests of truck drivers can be given more consideration,” he said. “Frankly, it’s not like we’re earning too much money.”

 

Read from the original source.

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