United States shipping crate with medical mask on it

COVID-19 and the Global Supply Chain

Categories: Freight Forwarder.

It’s impossible to ignore the ongoing impact of COVID-19, the pandemic commonly known as coronavirus.

For millions of residents in the world’s largest cities, shelter-in-place orders have all but halted commerce, leading to massive layoffs, market chaos, and a full-scale, ad hoc reimagining of workforce best practices.

Stateside, it has also led to unprecedented shortages in necessary supplies, including everything from N95 masks to common groceries (and, famously, toilet paper). Thankfully, those shortages are largely the result of consumer behavior — unexpected panic buying — rather than disruptions in the supply chain.

In fact, the global supply chain remains strong even in these trying times, which is a testament to the creativity and innovation of the industry.

Every facet of the global economy is dealing with COVID-19 ripple effects in their own way. Few are more uniquely impacted than the shipping industry. After all, how does an industry defined by moving goods, both domestically and internationally, manage a rolling global lockdown?

Ports

While most companies remain shuttered indefinitely, ports are considered essential businesses. Shipping and logistics firms operating out of American ports will remain open (with some added safety precautions). Some of the new protocols cover:

  • Regular, ongoing warehouse sanitization
  • Enforced social distancing between workers
  • Restrictions on empty returns

In addition to policy changes mandating social distancing, operators at the port are investigating new ways to reduce contact between employees (including the use of drone technology).

Of course, all companies are coming to terms with new procedures for what to do if employees get sick. One positive COVID-19 case in this current environment could lead to entire docks or warehouses getting shut down for days — a disruption that could slow the movement of essential supplies needed to backstock hospitals and other vital organizations.

The stakes are extremely high. Already, coronavirus-related shortages for drayage and a truck driver shortage are leading to a container backup at Indian ports.

To face this challenge, the ports of Los Angeles and Long Beach have issued a memorandum of cooperation. In this statement, they vowed to use their collective resources to overcome new challenges, like chassis shortages at intermodal junctions, to increase cargo velocity and move more containers onto trucks safely and efficiently.

Trucking

At the end of 2019, the demand for trucking services was down. But things have changed in a few short weeks. With thousands of people trapped at home, ecommerce companies are filling the roles usually served by supermarkets and other traditional retailers.

A telling statistic: as unemployment catapults to levels not seen since the Great Depression, Amazon and Walmart are hiring more than 250,000 new warehouse associates to support the ecommerce push. All that movement is increasing demand for trucking services from port to warehouse to last mile.

Plus, all this is occurring in the shadow of a staffing shortage at many trucking companies.

How essential are truck drivers in pandemic relief?

Truckers are responsible for transporting essential goods like medical supplies, perishables, dry goods, and more. They’re considered so essential that regulators are giving them the green light to help fight the pandemic.

Last week, the Federal Motor Carrier Safety Administration issued an emergency declaration to provide hours-of-service regulatory relief to commercial drivers transporting fuel and raw materials needed to manufacture essential supplies. Drivers transporting these goods are not subject to the 60/70 hour rule, 34 hour restart requirements, or 30 minute break regulations.

Long haul crews have to adapt to new challenges while balancing safety and navigating a patchwork of changing closures and regulations. Not to mention that many rest stops and dine-in restaurants have closed — and you can’t exactly fit a big rig through the drive-thru at Wendy’s.

Conclusion

All of us are in uncharted territory right now. In our hyperconnected, globalized world, properly responding to a pandemic requires cooperation and adaptability. Few industries have risen to new challenges better in recent years than shipping and logistics.

Both shipping and trucking will be essential in fighting this pandemic. The next few months won’t be easy for any industry, but businesses on the supply chain are already adapting. This will be a work in progress, but hopefully the lessons learned will make for a stronger global supply chain for the future.

Learn more about GlobeCon’s COVID-19 preparations at the Port of Los Angeles. Contact us!