Coronavirus will create waves up and down the supply chain
Posted March 16, 2020
An analysis of the impact on trucking:
- The coronavirus will affect the availability of both imported and domestically produced goods.
- The virus appears to be spreading with ease, with a potential to create hotbed infected regions.
- Motor carriers should implement best practices when dealing with the pandemic.
If truckers deliver the nation’s (and world’s) economy, what happens when the supply chain catches more than the common cold?
It’s evident that the coronavirus, or COVID-19, has already disrupted the world’s markets, economies, and supply chain. Much of the effect on the supply chain has not hit “home” yet. Hold on to your hats, the stretch up ahead will likely be bumpy.
Decrease in imports
Much of the goods consumed in the North America are manufactured overseas – primarily in East Asia where the coronavirus originated. While the originally affected countries hold their cards close to their chest, we have an idea of the impact from production levels reported by domestic companies with manufacturing facilities in Asia and tonnage projected to be coming into the North American ports. February production in China declined at a record pace. With China’s production at record lows, assembly that is dependent on the imports and the related freight volume reductions will follow shortly.
The cold and flu season has always been a challenge for motor carriers. Now the coronavirus adds one more variable to the supply chain. Unhealthy workers mean less production, less volume shipped, and reduced capacity to carry.
What has been witnessed overseas can happen in North America. As a precaution, major enterprises are already proactively limiting travel. If major manufacturers slow production or idle lines or plants (either as a precaution or a necessity), there will not be ripples up and down the supply chain — there’ll be waves.
Nature of the disease
Much still needs to be learned about the virus, but according to the Centers for Disease Control and Prevention (CDC), the virus seems to be spreading with ease. There have been reports of the virus spreading before infected individuals even know that they are sick. While not the primary spread of the disease, an infected worker could infect coworkers before showing symptoms.
Like most contagious viruses, it’s thought to spread mainly from person to person when within six feet of each another. When an infected person coughs or sneezes, respiratory droplets are produced that land on others nearby. It’s possible to get the virus by even touching an infected surface.
Intelligent people may disagree whether the outbreak will reach pandemic levels. However, it is fairly certain that there is, and will continue to be, an outbreak.
Drivers and the spread of the virus
As the nature of their work, drivers carry people and product from location to location. As such, they may also carry:
- The virus,
- Others that have the virus, or
- Infected items from Point A to Point B.
And like everyone else, drivers do not want to be sick. If there are hotbed infected cities or regions, many drivers will be unwilling to go into them. Demand will be initially high in affected areas to meet real and perceived (hording) needs. Unwilling drivers will reduce the capacity to meet that need. In addition, keep in mind that ill drivers are prohibited by regulation from operating commercial motor vehicles.
An ounce of prevention
Understand that there will be disruptions to the supply chain. The disruption will affect you, your operation, and your associates. Your reaction can either be planned and rational or emotional and panicked. The choice is really yours to make.
Consider the following best practices:
- Know your vehicles. You don’t need a spare for every part, but plan for the high frequency replacement components by having a couple extra on hand. There should be no need to lose productivity by sidelining a critical asset over a hundred-dollar part.
- Be flexible with employee absenteeism. You should be willing to send associates home sick earlier and keep them out longer than normal. Review your policies. Now may be a good time to make an exception to hardline attendance policies. Afterall, you may have to enforce them to a greater percentage of your workforce.
- Communicate health tips and news. You could have regular newsletters and information blasts covering how the virus spreads, symptoms of infection, prevention, treatment, and what to do when infected.
- Provide driver-specific materials. You should provide educational and news aimed at a driver audience. It is a natural response for drivers to refuse to go into affected areas. But good information, support, and empathy can go a long way to combat a driver’s fear — that can be both rational and irrational. Your call-terming script should now include a “stay healthy!” message, along with your standard “drive safe” communication.
There will be light
As an economy, people, community, nation, and organization we can — and will — get through this. The SARs, ebola, H1NI (swine) to one degree or another have come and went. As they say, this too shall pass. Stay healthy and safe.
This article was written by Richard Malchow of J. J. Keller & Associates, Inc.