The COVID-19 crisis has necessitated quick thinking and sudden change in nearly all industries, few more so than logistics. With a myriad of factors affecting both the supply and demand sides of the equation, supply chain professionals have been thrust into the spotlight and have responded in a big way. Further complicating their task are rapidly evolving regulations and HR issues. Let’s examine the unique challenges that 2020 has presented, as well as some of the ways that the industry is responding.
Demand Fluctuations
COVID-19 has both medical and societal implications and demand for certain products has surged accordingly. Some of these demand spikes are perfectly logical, such as the increased need for protective masks and other medical supplies. Other items facing shortages, such as toilet paper, are driven by more psychological factors.
“We sense there is a panic around the prospect of isolation or quarantining,” says William McKinnon, president of Canadian Alliance, a Vancouver-based third party logistics company. “Normal rational thoughts go out the window and, regretfully, rational decision making gets replaced with panic. The vast majority of our food chain customers are seeing huge spikes in demand and in turn our team is processing increasing volumes, greater than our Christmas rush.”1
Supply, Logistics and Regulatory Impacts of COVID-19
China has been dealing with the full brunt of the COVID-19 crisis for a longer period of time than other parts of the world and the impact to their massive manufacturing industry is now being felt in North America. Incoming container traffic at the Port of Vancouver plunged 14 per cent in February2, largely as a result of shutdowns in China.
Meanwhile, travel restrictions have grounded many commercial flights, removing air freight capacity from the equation. Quarantines, staff shortages and social distancing measures are disrupting business as usual throughout the supply chain.
Regulations affecting travel, trade and the supply chain are changing on a constant basis. In response to the crisis, the province of British Columbia has granted itself the power to take over elements of the supply chain through the Emergency Program Act.2 The move means that warehouses and distribution centres are subject to sudden government intervention, adding further variables to the situation.
Meeting the Challenge
Supply Chain professionals are responding to these challenges with innovation, perseverance and determination.
In order to keep staff members safe, warehouses are stepping up sanitization efforts and adjusting procedures. Steps are being taken to ensure that warehouse workers remain further apart from one another. Protective gear and hand sanitizer are being made abundant, whenever possible. New Jersey based distributor Imperial Dade has positioned a nurse on site to check employees’ temperatures, and has staggered lunch shifts to limit the number of people in the break room at any given time.3
In order to meet fluctuating demands, companies are reprioritizing the distribution of essential goods on an ongoing basis.
E-commerce fulfillment provider ShipBob has reconfigured its warehouse management system to have products like hand sanitizer ship out ahead of items deemed less essential, reports the Wall Street Journal.
“We’ve had more volume go out in the last week than any other outside of the holiday shopping surge between Black Friday and Cyber Monday,” said Chief Marketing Officer Casey Armstrong.3
Technology, of course, is being utilized throughout the industry.
“The increasing shift to online sales during this period is putting pressure on suppliers to have their full catalog online,” says Chris Cochran, CEO of FreightWise, a Nashville-based logistics and transportation cost-management technology firm that provides shipping management services through a software-as-a-service platform.4
With so many variables in play, Supply Chain software firm FuturMaster advocates the usage of simulation software to prepare for any eventualities.5
When technology falls short, people are turning to good old fashioned patience and flexibility. Freight yards and warehouses are dealing with massive demand surges, which are creating additional challenges for truck scheduling and transit times.6
“Whether you’re communicating by telephone to a small guy or via TMS to a larger carrier, you have to be willing to be all over the map,” says Justin Frees, executive VP of carrier development at Arrive Logistics. “Flexibility is the answer; unless you’re able to use the array of types and sizes and communication channels that these guys use, then you won’t be effective for the carrier or the shipper.”6
Truck drivers, meanwhile, face their own challenges. Even as some industries are in desperate need of additional truckers, others are unable to use their drivers, as scheduled overseas shipments don’t arrive.4 Those who are on the road are often finding it hard to find food, as many rest stop vendors have closed. In response, some warehouses are offering vending machines and bottled water to truckers.6
Supply Chain Efforts Applauded
If there’s a silver lining to any of this, it’s the overdue recognition being paid to oft-unsung members of the workforce, including doctors, nurses, grocery store workers and logistics professionals. In the absence of a silver bullet, it’s hard work that makes the difference.
“What happens in situations like these is that it ends up with the team putting in extra hours,” says McKinnon of Canadian Alliance. “There isn’t a pool of trained workers out there that are ready to spring into action. We have a little bit of wiggle room, but we don’t have a 30% increase of available staff ready to mobilize to walk into our building tomorrow. Nobody does.”1