Pandemic Effects On Supply Chain And It’s 3 Massive Challenges
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Impact of Pandemic and Making a Positive Mark in Challenging Times.
COVID-19 Pandemic has impacted and thrown everything into turbulent waters. It continues to bear down on carriers, shippers, and retailers, and constantly brings about repercussions that create challenges.
Private lenders and individuals, businesses, small and big, across the supply chain, are struggling under the chaos of the pandemic, irrespective of relief efforts by the government. As the next phase of the COVID-19 Pandemic unfolds, businesses have begun to re-open.
However, the results, and how the picture will play out, still remains a major question. For the time-being, shippers, carriers, and individuals can only focus on making a difference and a positive mark by taking steps to help businesses stay afloat.
1. Pandemic Impact and Carrier Challenges
Reeling under the Pandemic, the entire logistics sector, across the country, fleet managers, dispatchers, and drivers, all are working longer hours to keep the supply chain moving. Truck drivers are pandemic heroes, going above and beyond their call of duty, putting themselves at risk moving in and out of “hot spots” with high rates of COVID-19 infection, to keep food and critical medical supplies moving throughout the supply chain.
According to CNBC News, a few of the owner-operators have limited or no access to personal protective equipment (PPE) and testing. Hence, these drivers are understandably concerned about risks to their health.
Since markets are shut down, small carriers that transport goods, such as restaurant supplies, are hit bad and are struggling to find work. Overall, the freight volumes are down, putting a downward pressure on rates. Forbes findings state that since early April, available loads have decreased by nearly 38 percent. However, trucks seeking loads have risen by 12.7 percent.
Another challenging impact is that drivers who do have work, are encountering a dent in their profits due to the long dwell times. Drivers face long waiting hours, both, on the pickup and on delivery sides. Most of the waiting is due to COVID-19 requirements, which include temperature checks and completing of forms. Adding to the woes is a labor shortfall due to COVID-19 Pandemic.
Lack of efficiency and lack of collaboration efforts from some shippers, who are less motivated to work with carriers, when tender rejection rates drop, is at the root of all problems, indicate studies by FreightWaves.
These are challenging issues and these are challenging times for all. To address these issues, shippers and brokers can make a difference in the following ways, to keep the balance:
- Pay a fair market price, to help small carriers stay afloat in the
- Ensure that the drivers keep moving to reduce dwell time and subsequent carrier expenses. “When truckers are not moving, they are not earning”, is the ground rule.
- Ensure and offer drivers safe places to park, specially during dwell time, and build rapport with drivers who struggle to find available spots.
- Donate and distribute PPE and hand sanitizer to protect drivers on the
- Ensure payments are done promptly, on time, to help carriers maintain a healthy cash flow. Adopt one-day carrier payment program, like QuickPay+, “LoadDelivered”, which enables carriers to receive payments within just 24 hours, and without fees, solely based on invoiced
It is important to be responsible. Working to become a more desirable and responsible shipper today, in these challenging Pandemic times, ensures that reliable carriers in your corner stay with you when the capacity market shifts.
2. Foodservice Challenges
Expected, consistent demand for products from restaurants, schools, hospitals, and other large institutions, is at the core base of Foodservice distribution. COVID-19 Pandemic has dramatically decreased this demand, dropping it by 23 percent, in the week ending May 10.
It has been further predicted by The International Foodservice Distributors Association (IFDA), that the foodservice industry is estimated to suffer $24 billion in losses, during the second quarter of 2020. Many companies will go out of business. If restaurants shut-down, the effects will swiftly ripple through the supply chain, affecting distributors and shippers too.
In order to tackle this pandemic challenge, and make a positive difference, shippers, drivers, and consumers alike, can support local restaurants by ordering food delivery and takeout meals. .
3. Retailer Challenges
During these COVID-19 Pandemic times, demand for essential goods remains at an all- time high, all across board. However, demand for niche retailers is at a considerable low. There has been an overall decline in the demand for general merchandise by 2 percent year-over-year.
Soaring unemployment, continued political, economic and social uncertainty has led to people making fewer luxury purchases. Several retailers are likely to shut-down the coming months. The surviving retailers are headed to face grim challenges due to already thin profit margins, and operating models that do not easily translate to e-commerce structures or to social distancing requirements.
A good development is that the online shopping continues to grow. Here consumers can play a key role in keeping the brick-and-mortar retailers in business. As brick-and- mortar stores begin to re-open, post lockdown, consumers must respect the in-store COVID-19 policies and regulations, such as wearing masks, physical distancing, and exclusive hours for seniors and other high-risk individuals.
Shopping at local stores, and supporting small businesses, even those that sell non-essential goods, whenever possible, is bound to make a huge difference in these pandemic times.
Looking to the Future
COVID-19 Pandemic unfolded a stupendous change in the world. A new normal has been established. And Coronavirus pandemic continues to force a change upon the entire supply chain. Shippers, carriers, and individuals can smartly adjust to the new normal and help improve the situation. Taking responsible, necessary and progressive steps today will continue to make a long lasting difference, long after the pandemic is over.
Apps, Software and advanced technology like LoadDelivered, designed and uniquely positioned to help shippers shorten dwell times, improve supply chain efficiency, and reduce costs are a