COVID-19 - Logistics Lessons Learned 

June 1, 2021

COVID-19 - Logistics Lessons Learned 

It has been one year since the COVID-19 pandemic emerged, highlighting vulnerabilities in supply chains and creating a new challenging landscape for international trade for many organizations around the world.  

The foundation of an efficient supply chain process had always been dependent upon predictable supply and demand forecasting. It all changed as the pandemic struck around the world, and the most tremendous turbulence in the supply chain, ever experienced in this lifetime, began to unfold.  

The Impact of One Year on Supply Chains

The 'aftermath' of the pandemic (although still prevalent in many countries) has emptied shelves and diminished safety stocks as manufacturers reduced production at the outset of the Coronavirus crisis.

The impact of the bullwhip effect has never been more prevalent than at present. Demand is now outstripping supply in many parts of the world, and transporting cargo is still challenging. 

Consumers in the United States are in purchase mode. Having been faced with lockdowns and closed stores, consumers have reawakened from the pandemic. According to a recent report by JP Morgan, consumer spending in the U.S. is increasing:  

  • Retail sales rose 5.3% in January, above expectations. 
  • During 2020, U.S. household savings nearly doubled. 
  • Last year's federal stimulus packages helped real household income grow 3.7% in 2020. 

It would appear that the U.S. is returning to regular lifestyle activities post-pandemic, and consumer demand has kick-started in 2021. 

The COVID-19 pandemic in the past year has indeed been 'a perfect storm' for supply chain professionals. The culmination of reduced manufacturing output, empty shelves due to panic buying, limited air freight capacity in the belly hold of passenger planes, closed borders, and increased capacity demand required for COVID-19 vaccines and supplies led to a multitude of disruptions. Additionally, Brexit added to the turbulence.  

One year later, supply chain disruption is still ongoing with container shortages, limited passenger flights, and most recently unpredictable circumstances such as the most recent blockage of the Suez Canal. Costs are rising due to the challenges and are impacting companies around the world. 

Logistics Lessons from the COVID-19 Pandemic Disruption 

Keith Winters CEO Crane Worldwide LogisticsSupply Chain resilience will depend on an organization's capability to resume efficient operations in the 'new normal.' Many will also face the challenge of recovering from the impact of the past year during the pandemic.  

In a recent interview with Air Cargo World, Keith Winters, CEO of Crane Worldwide Logistics, explained that the pandemic brought unforeseen challenges for our clients.

"As our client's needs changed, air freight rates increased exponentially and disruption began to impact supply chains, the most important factor for us to be a successful client advocate was to adapt our modelling according to the situation." 

"Throughout the pandemic, being agile and nimble to respond to the challenging market was key to being a successful logistics partner to our clients," he added. True resilience is adapting to change quickly and effectively and providing logistics solutions regardless of the turbulent environment.  

An essential lesson for potential future disruption is to ensure all supply chain partners have contingency planning to support global operations. When the unexpected occurs, supply chain partner relations add the most benefit to a successful supply chain operation. 

Going the extra mile and seamless communication play a huge role in a supply chain partnership, and that’s when true teamwork comes into play.  

Visibility of supply chain operations is also a valuable source of information to understand the current environment when turbulence arises. Supply chain technology allows partners to have complete visibility of shipments down to purchase order level, inventory in stock, and freight in transit.  

The accuracy of supply chain data allows for better decision-making when a company needs to pivot away from its forecasted or contingency plans. Forecasting is a challenge; however, the more information provided for space requirements for air and ocean freight allows service partners to book capacity in advance. 

Trust, collaboration, and teamwork are fundamentals of the Crane Way culture and the way of doing business worldwide. Our frontline workers, operations teams, and management adhered to our Technology, Service, and People value proposition during the COVID pandemic.  

During times of crisis and rapidly evolving circumstances, partnerships throughout the supply chain are imperative to maintain an agile and visible approach to fluctuating supply and demand. Supply Chain disruption has almost become the 'new normal,' and it is questionable that we will soon see stable and predictable operations.  

Crane Worldwide Logistics is making investments such as expanding our global footprint of warehouses and adding capacity through charter operations where needed.

Being flexible and agile to address our clients needs will continue as a focal point for Crane Worldwide as it has been since the company began in 2008. 

24th April, 2020

Global supply chain disruption – The Coronavirus Impact

The vulnerability of supply chains is never more apparent than in times of crisis. With the outbreak of the COVID-19 coronavirus pandemic, industries are navigating a new supply chain landscape with limited, and in some cases, zero predictability.

Pre-COVID-19, supply chains functioned efficiently based on relatively predictable supply and demand forecasting. Still, since the outbreak of the virus, industries are facing a new environment of instability to manage and maintain.

Empty shelvesFor example, the supply of essential items experienced an exceptional influx of demand. Quarantine, lockdown, and self-isolation periods instigated panic buying as COVID-19 spread from China into Europe, the United States of America, and, subsequently, all regions of the world. The increase in demand puts pressure on retailers to keep shelves stocked in stores and supermarkets.

Furthermore, the fashion industry, with its new spring season apparel ready to hit high street stores, experienced closures of outlets in addition to restrictions of movement of their consumers. Subsequently, apparel manufacturers and retailers became fervently more reliant on e-commerce; however, disruption to final mile distribution also became apparent as trucking and drivers became increasingly difficult to source.

However, it is not just the initial supply shock that has caused disruption and supply chain risk. Regular modes of transportation, such as air freight, are another example of how unpredictable circumstances have impacted supply chains due to the COVID-19 coronavirus pandemic.

Air Freight capacity reduction has caused immense challenges for the regular transportation of goods around the world. With grounded passenger planes and limited ‘belly-hold’ capacity, alternative transportation such as Rail Freight from China to Europe, as well as Intermodal Services and Cargo Charters, have seen an influx in demand.

Multiple supply chain disruptions are occurring in the space of a month, even the most resilient of supply chains, could not have forecasted such unprecedented circumstances.

What are the next challenges ahead for Supply Chains?

Air freight cargoAs supply chains adjust to the initial disruptions created by the outbreak of the COVID-19 coronavirus, additional challenges are beginning to emerge as the global crisis continues to develop around the world.

Consumer demand is now the question that troubles supply chain experts. In addition to business and store closures for indefinite periods, industries may also experience a reduction in consumer demand. Many homes face challenging times ahead due to labor uncertainty and reduction in household income.

Forecasting will inevitably be a challenge as unpredictable demand will dominate supply chain operations as will optimizing production and distribution capacity.
Scenario planning and analysis will undoubtedly be a valuable tool to understand both the financial and operational implications of any further disruption.

How to successfully prepare for future Supply Chain challenges?

During times of crisis and rapidly evolving circumstances, partnerships throughout the supply chain are imperative to maintain an agile and visible approach to fluctuating supply and demand. Are you prepared if another pandemic or a second wave of COVID-19 strikes? As your logistics partner, Crane Worldwide Logistics can support you with diversifying your solutions through warehouse capacity and flexible transportation measures.

As you begin to assess your future consumer demand, determine your current and future inventory requirements as well as forecast any influx in your supply, we can provide a flexible logistics approach to ensure your business continues to run effectively. Mitigating risks, we can provide support to you in the long term both now and in the future. How will you build supply chain resilience into your operations should a similar pandemic reoccur?

Supply Chain top priorities during and after the COVID-19 pandemic

Hau Lee, a professor of operations, information, and technology at Stanford Graduate School of Business, broke down the top priorities to overcome Supply Chain challenges. For most large manufacturers, globalized sourcing is here to stay; therefore, the big priority for companies is to increase their awareness about what’s happening throughout the supply chain.

  • What are the trends in trade agreements?
  • What kinds of risks — physical, political, financial — do suppliers at each level face?
  • What will be the repercussions for the rest of the chain if a key factory shuts down?
  • And what are the backup options?

A second priority is to build more flexibility into the production process (operational hedging). The best way to navigate these challenges is by having alternative sources.

The third priority, according to Lee, is to increase logistical flexibility. Investing in logistics can significantly expand a company’s options.

Moving forward, as stated by Professor Lee, companies and manufacturers looking o overcome global Supply Chain challenges should:

  • Look for options in advance.
  • Invest in flexibility.
  • Hedge like a bank does.

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