Through the days leading up to the Ides of March, Tim Stout of Stout’s Transportation watched nervously as schools and college sports teams canceled bus trips. Rider College even forced its baseball team, traveling in one of Stout’s $550,000 motor coaches on I-95, to turn around en route to Florida spring training to return home.
But when Stout heard on the news that the U.S. military eliminated all nonessential troop moves because of the pandemic, he realized that he had a whale of a problem. “When the military stopped movement, you knew it was all over,” Stout said.
On March 16 around noon, Stout gathered employees in his corporate headquarters and bus depot on Irven Street in Trenton and told them that the firm would be furloughing them and shutting down, idling its 100 buses for the first time in Stout corporate history, dating to 1960 when Stout’s grandfather, Harry Stout Jr., launched the business with milk deliveries and school bus service.
“Whenever we had a downturn in one of our markets, we had something to turn to," Stout said. But "this pandemic has shut down all transportation markets completely.”
Stout and the owners of other private bus and shuttle companies fear what the future holds even as the economy reopens haltingly. Some bus and shuttle operators may not make it through the pandemic and those that do could be far smaller firms, executives say.
Tourism, a big source of revenue, could take months or years to recover. Commuters will be loath to ride on full buses, and newly empty seats will convert profitable routes to money-losers. Colleges, also a big source of revenue, are debating how and whether to open in the fall. Stout has contracts for shuttle service for Temple University students, and he transports visiting NBA teams from the airport to the Wells Fargo Center for Sixers home games.
At a time of social distancing, Stout neatly summarizes the industry’s dilemma: “We transport groups of people to group events.”
Private bus and shuttle operators, many of them second- or third-generation family businesses, say that the Trump administration overlooked them when it bailed out the airlines and mass transit systems, also pummeled by the pandemic, with tens of billions of dollars. Small businesses such as those in the shuttle and charter trade did benefit from the PPP loans. The loans allowed them to keep their employees on the payroll but also at a time when they had no business. Those loans run out next month.
And as the economy reopens, bus and shuttle operators will have to pay their employees during a time of vastly lower ridership while also paying fixed costs that include fuel contracts, insurance, vehicle loans and other charges such as bus-gate fees.
Stout noted that a loan on a $550,000 luxury bus, or motor coach, could run more than $6,000 a month. The company, in good times, generated more than $10 million a year in revenue.
Stout’s Paycheck Protection Program loan came through on April 17, which allowed Stout to bring his 120 employees back from furlough. But the PPP loan will run out on June 11. Then, Stout said, “we have no revenue coming in and we have to furlough our employees and we have all our overhead to cover to keep moving forward.”
It’s a national problem for an industry that "transports nearly 600 million passengers each year and contributes nearly $101 billion in direct economic impact to the nation. In the wake of COVID-19, nearly all of the industry’s 3,000 businesses have shut down, laying off almost 88,000 employees. They are expected to lose $8 billion through August and experience many permanent closures unless the federal government intervenes,” the Greater New Jersey Motorcoach Association said in a recent statement.
Stout is president of the organization. The trade association, one of the bigger groups in the nation, includes 52 private bus operators from New York, New Jersey, Pennsylvania and Delaware.
Hoping for relief, the industry is lobbying for another round of PPP funds, extending through Dec. 31, and $15 billion in grants or loans. Firms held a rally with 1,100 buses in Washington on May 13 to bring attention to the industry’s plight and to be considered in the next stimulus package.
Tom JeBran, president of Trans-Bridge Lines, based in Bethlehem, has idled 65 motor coaches but hopes to restart limited commuter service in June. The company runs buses to Newark and New York from Allentown, Quakertown, Doylestown, New Hope and Lambertville.
Some private commuter bus services have restarted but are running into New York with only eight to 10 passengers on a 56-passenger bus, JeBran said. “When we start up somewhere in June, expect to roll slowly, maybe 20 buses,” JeBran said. But he fears that because of fewer passengers, “everything will be below break-even.”
He added that without restaurants or Broadway shows, the tourist buses will “be running empty.” Trans-Bridge runs charters to casinos but “we barely have any charters on the books for June.”
JeBran added that “Trans-Bridge will get through this but we won’t be the same company."