[030420.EN.BIZ] US Cargo Expected To Take Big Hit With Widespread Layoffs

COMPANIES engaged in the cargo industry are starting to lay off staff as the economic downturn in the United States starts to bite.

According to reports, Total Quality Logistics (TQL) and Hong Kong's Freightos are among the businesses in the industry that have laid off employees this month, reported New York's FreightWaves.

Freightos is believed to have let go less than 50 people, the report said. TQL has 5,000 staff globally, and a source within the company revealed 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.

Freightos 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 hard. We regretfully are forced to consider downsizing part of our team, said the company.

Truck drivers are also likely to be affected as retailers close down locations. Macy's, Nordstrom, Nike and Apple are among the big retailers that have shut 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.

Layoffs are expected to accelerate quickly across the nation. US Treasury Secretary Steve Mnunchin reportedly told senators on March 17 that the nation's unemployment rate could climb as high as 20 per cent without government intervention.

Investment firm UBS found that 24 per cent of employers plan to downsize if the outbreak worsens in a survey conducted between March 7 and 13.

Connecticut and Michigan are among the states that have seen unemployment claims spike, with 25,000 Connecticut residents filing since March 13. The state usually processes 3,000 claims per week. Michigan officials said claims jumped to 5,400 on March 16, up from between 1,300 and 1,600.

Source : HKSG.