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As you are aware, the world as we’ve known it has changed in the last thirty days. To keep from overwhelming our healthcare system, our government officials have asked us to lay low, practice social distancing, and reduce our travel to prevent from receiving the virus or passing it along. We will be sending out more communications over the coming days and weeks to keep you abreast of what Nussbaum is doing to address any rapidly developing situations, and to protect our business and employees.
In our seventy-five year history, this is not the first time we’ve passed through a recession or severe downturn in business. In fact, we’ve weathered a few of them and learned from each one.
First, we are committed to complete transparency about our business levels and our finances. Nussbaum has a strong balance sheet with several million in cash available. Our bankers have told us that our finances are in good shape and we do have a line of credit that we can draw on. We are presently seeking to increase our credit line should business levels drop to a point to where it would place a burden on the company. We’d still have access to the cash necessary to make payroll or pay our vendors.
Our freight volumes are at the same levels as they were at the beginning of the year; however, we believe a slowdown is imminent due to a lack of consumer purchasing and we want to be prepared as conditions change. A worst-case scenario would be if government would direct a large-scale shelter-in-place order for a few weeks, there is no consumer spending, and business expenditure projects would come to a standstill. Even though we are considered an essential service, there would be little freight to haul. Unlike an insurance company which has a steady income stream, if we’re not hauling freight, there’s no revenue stream. And at the rate of approximately $700,000/week in payroll, it would be difficult to sustain that outpour of cash longer than a couple of months.
We’re not sitting still. We have been on the phone with Truckload Carriers Association leadership, as well as with Chris Spear, the President of the American Trucking Association lobbying to keep rest areas and truckstops open. They are also working to ensure truckers are considered “essential” to the economy and can keep moving during a shelter-in-place event. At this time, the news is very encouraging that we’ll be able to keep operating. A recent success of that was when Pennsylvania recently shut down and due to pressure from President Trump, reopened their rest areas.
As we approach these challenging times, we have 3 main goals:
1. Protect the health and safety of our employee-owners
2. Protect the jobs and income streams of our employee-owners, and
3. Prepare for the rebound/upturn.
We strongly recommend that you suspend all personal travel for at least the next two weeks. If you are returning from a vacation and are traveling through an airport, you will be required to work from home for at least one week until we can verify that you remain symptom-free.
We want to protect the jobs and income streams of our employee-owners. Downturns are a great time to fix things inside our company where we can’t afford the time or effort to invest time and resources in when the economy is booming. At the same time, it’s a great time to invest in our employees, review everything we are doing and improve what needs to be fixed. We’re actively working on an income plan for those who are medically affected by the Covid-19. We should have more details by early next week.
And yes, there will be an upturn – we are hopeful as early as this summer – when the Coronavirus quits growing and we find fewer cases. Is there a lot of pain right now, yes, and we’re all feeling it. Your health and safety are of the utmost importance to us right now.
We need to be ready to take advantage of the upturn. We need to be ready with a stable and productive workforce. There is no reason we can’t begin dreaming again about the future. We plan to embrace transparency, practice financial discipline, and remain focused on what we need to do to see ourselves through this crisis and prepare for the future.
As a final note, I want to thank all of you for the vital role you play in this company and this industry. Your service truly is essential, and America would not survive without you.
