According to Moody’s Investors Service, the freight transport industry will suffer supply chain disruptions due to the Coronavirus, ultimately affecting the intermodal business of railroads and truck carriers.
In a March 16 report, Moody’s says auto suppliers and the transportation industry lands in the “high exposure” category of Moody’s Coronavirus heat map, indicating potential near-term implications for credit quality, and possibly ratings.
“The Port of Los Angeles (Aa2 stable) announced a 23% reduction in cargo volume in February and a major container shipping company said that its guidance is now subject to significant uncertainties. Lower shipments will impact the intermodal business of railroads and truck carriers,” the report says. Parcel delivery companies, like United Parcel Service (A2 negative) and FedEx Corporation (Baa2 negative), have not seen a significant impact at this point and have some offsets, including less competition from cargo carried in the belly of passenger aircraft that reduced service and supply chain disruption that could result in shippers, such as automotive manufacturers, using more expeditious airfreight to keep production moving along.”
To read the full report, click here.