The cases of COVID-19 pandemic are increasing, with thousands of people dying, suffering severe symptoms, and millions being in lockdowns. The disaster is also affecting the global economy, with a high impact on supply chains. Economists predict a prolonged recession, projecting that the economy will contract by 0.7% in the second quarter of 2020 and by 1.2% in the third.
HOW DOES COVID-19 AFFECT LOGISTICS AND TRANSPORTATION?
According to the newest ISM survey, 75% of businesses report their supply chains have been disrupted by the coronavirus impact. Mostly, these disruptions are connected to hindered manufacturing and operating processes in China, the key supplier country for most of the U.S. businesses.
China-Related Challenges in Supply Chains:
- 57% of companies report doubled lead times for tier 1-sourced components from China
- 62% of businesses are experiencing delays in receiving shipments from China
- 53% are having difficulty getting supply chain data from China
- 44% of businesses do not have a plan for dealing with COVID-19 disruption
- 50% is the capacity percentage Chinese suppliers report functioning on lately
- 52% of regular staff operate in suppliers’ businesses in China
KEY CHANGES IN TRANSPORTATION DUE TO COVID-19 IMPACT
- Travel ban for 30 days: President Trump has suspended all travel from Europe and the UK to the U.S. for 30 days
- Stock market drops: The stock market suffered a huge drop, with the Dow Jones market plunging more than 20%. This is the largest stock fall off in recent decade
- HOS rules exemption: FMSCA exempts Hours of Services rules and other regulations to speed up trucking efficiency
- ATA seeks help from White House: ATA asks White House assistance to keep trucks with essential supplies moving throughout the country
- 75% of companies say their supply chains were disrupted by COVID-19
- 60% of air cargo is carried in passenger planes, which are suspended for 30 days
WHAT IS THE IMPACT ON INTERNATIONAL AND DOMESTIC FREIGHT, LOGISTICS, AND TRUCKING
- After setting a 30-day ban for travel from Europe to the U.S., the White House ensured it is not including freight shipments. However, over 60% of air cargo is moved through passenger planes, which will cause air capacity to tighten, prices to skyrocket, and businesses’ inability to get their normal stock.
- The truck drivers are affected since they will have fewer breaks and have to drive more hours. Also, warehouses and facilities will likely be shut down or be short-staffed, with thousands of workers getting laid off.
- This is already slowing down the process of supplying businesses, homes, medical facilities, and communities with essential goods, combined with a spike in demand among anxious shoppers. The virus will likely prolong the disruption in the U.S. freight and transportation industry.
HOW COMPANIES CAN CHANGE THEIR STRATEGY TO AVOID DISRUPTION?
- Long-term inventory plan to keep stock for unpredicted situations
- Having multiple suppliers across different locations and distribution channels
- Technology-enabled transportation management and supply chain management systems
- Having an extensive network of freight carriers to ship with
- More flexibility and resilience through the supply chains
HOW TO STAY SAFE AND KEEP OPERATING
- Arrange work-from-home for everyone possible in your company
- Cancel and prohibit all travel for employees, implement self-isolation for those returned from the trips
- Increase cleaning and disinfecting in your offices, facilities, and warehouses
- Provide employees who are on duty with required protective supplies: sanitizers, masks, gloves, disinfecting wipes
- Implement a long-term strict health and safety policy within your company
SHIP SAFELY WITH PLS LOGISTICS SERVICES
PLS Logistics Services has a fully prepared plan for this disruption, so we continue to work hard and deliver freight in these conditions. We have ensured our people are safe, and we still provide the same quality service as you are used to.
We can handle your freight shipping needs in this challenging time, providing all the safety and service! Contact us: (888) 814-8486