The COVID-19 pandemic and resulting economic slowdown have created unprecedented disruptions within supply chains. As a result, companies with the flexibility to quickly adjust their transportation carriers based on changes in capacity or service needs, market demands, or new regulations find themselves in advantageous positions. Now more than ever, companies need the benefits that come with working with strategic logistics providers.
- Carrier Flexibility
The pandemic severely reduced cargo capacity across all transportation modes. Air carriers reduced domestic and international departures and many aircraft have been sitting idle. Ocean carriers are adjusting capacity by blanking sailings, with cancellations extending through July 2020. These contractions have resulted in substantial reductions in overall transportation capacity.
Since certain companies have direct relationships with airlines, ocean carriers, or truckers, this volatility can mean some of those companies are unable to find the capacity to meet their transportation needs. If flights, sailings, or truck capacity is suddenly cut from your supply chain and you solely rely upon that direct relationship, adjustments will likely be costly and slow. Logistics providers, such as Expeditors, have partnerships with most major carriers and can seamlessly transition supply chains to meet rate and service requirements.
- Mode, Speed, and Coverage Options
A sudden increase in demand for certain goods, including medical devices, personal protective equipment (PPE), and laptops, paired with a decrease demand for other industries, such as retail or hospitality, has upended many companies’ existing supply chain requirements.
For instance, before the pandemic, PPE procurement was generally focused on minimizing impacts on healthcare budgets. For many goods, including surgical masks and face shields, procurement had long lead times. These products were generally manufactured in Asia and exported via ocean to minimize costs. Seemingly overnight, movement of PPE became critical. Companies who procured transportation directly with ocean carriers scrambled to find expedited air or trucking solutions. Similarly, as airports in China began to experience backlogs due to reduced airline capacity, businesses needed to pivot to express ocean solutions to keep their cargo moving.
Companies that utilize logistics providers, by contrast, often have more flexibility to quickly adjust speed, mode, or coverage, in large part because companies like Expeditors have relationships with carriers that cover multiple modes of transportation and have networks in place to reach more markets.
- Navigating Evolving Regulations
Inconsistent and complex local, regional, and national regulations put in place to mitigate the spread of COVID-19 impact the manufacturing, transportation, and warehousing sectors in various ways. Certain countries introduced regulations that prohibit or greatly restrict inbound and outbound flights. In many regions, restrictions have now eased for trucking, importing, and exporting activities in order to allow essential goods to circulate more freely.
Keeping up with regulatory requirements will become increasingly difficult as the situation continues to evolve around the world. Logistics providers can help companies navigate these compliance and regulatory challenges effectively and in a timely fashion in order to keep business moving.
If you think your business could benefit from partnering with a logistics provider, contact your local Expeditors representative to learn more.