By Eleanor O'Connor – On
We outline the impact we’ve seen so far of the novel coronavirus (COVID-19) on logistics & supply chains while outlining steps you can take now and in the future to mitigate potential risks to your company and workforce.
Note: We will continue to update this article regularly.
Table of Contents
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Working from home can be a fairly manageable transition for traditional office workers, but for those working in logistics, manufacturing, and transportation, remote work at its fullest extent isn’t always a practical (or available) solution.
It can be nearly impossible for the majority of workers in these sectors to find a way of avoiding in-person contact altogether, but there are ways of limiting it. The logistics, manufacturing, and transportation industries provide essential functions for daily life, especially during a crisis such as COVID-19 where keeping up with the high demand for food, emergency supplies, and equipment is crucial.
Often and especially during times such as the outbreak we face today, they are the world’s “unsung heroes.”
Considering that jobs in these sectors are essential for the proper functioning of society, there needs to be a balance between minimizing health-related risks to these workers while getting the job done in the most efficient way possible, considering the circumstances. After all, if workers in these industries fall ill, there won’t be anyone to handle these responsibilities.
COVID-19 Supply Chain Impacts
The latest manufacturing job data is in! The good news - manufacturing jobs in Michigan increased by 1.71% in July compared to the previous month. The not so great news - manufacturing jobs in Virginia decreased by 2.85% compared to the previous month.
Source: Blue Collar Jobs Tracker
As a result of the COVID-19 Pandemic, some inventories are too low to cover short term outages of essential and non-essential materials and components. This is bringing large scale disruptions to supply chains that impact the logistics, manufacturing and transportation industries.
China’s industrial output has experienced a significant slowdown due to the COVID-19 Pandemic. Unfortunately, many firms’ (especially those delivering or manufacturing computers, electrical equipment or machinery) have supply chains reliant on China that have been negatively impacted by the slowdown.
The slowdown in China has resulted in the inability of many US assembly plants to receive materials needed to produce the products most of us use daily.
According to MarketWatch, IHS Markit predicts that the coronavirus impact will reduce global car production by nearly one million units this year.
The greatest supply chain risks fall on firms that were previously avoiding extensive stockpiling of inventory and components to reduce costs. Firms that have supply chains reliant solely on China also face greater risks.
Due to COVID-19 related shutdowns and supply chain disruptions, the following industries relating to fleets and manufacturers have been negatively impacted:
➤ Concert equipment
➤ Trade show exhibits
➤ Food service
➤ Car & truck components
The following industries have actually experienced a huge spike in demand:
➤ Grocery food items
➤ Essential consumer products
➤ Anything relating to the health sector
COVID-19 Trucking & Logistics Impacts
For fleets & logistics companies servicing the health care, food, and household product imports sectors, business is booming. For everyone else, especially those in the retail & automotive sectors, "overall shipping volumes are declining," says Lance Malesh, chief commercial officer of logistics service provider BDP International.
Kevin McMaster, Vice President of Carrier Sales and Operations at Flock Freight, states that he "anticipates freight demand to increase in the partial truckload (PTL) and less-than truckload (LTL) sectors" due to a decrease in demand for non-essential products.
Unfortunately for those industries negatively impacted, layoffs, furloughs & salary reductions may be ahead. Those who are unable to work remotely, either due to companies not implementing the appropriate cloud-based technology or because of the physical nature of their job, will be the most severely impacted.
Hours of Service Exemption
According to a Heavy Duty Trucking article, an hours-of-service (HOS) exemption has been made that covers transportation of the following:
➤ Wood pulp that's used in or relates to the diagnosis & treatment of COVID-19, community safety, sanitation & COVID-19 community transmission prevention supplies or groceries for emergency restocking (food, paper products, etc.)
➤ Raw materials used to manufacture bleach, disinfectants, hand sanitizers & similar items
➤ Food packaging
After these items have been delivered, truck drivers must achieve the required 10 hours of rest at the nearest safe rest stop before getting back on the road.
Truck drivers carrying essential items will be allowed to cross the border between the US and Canada, but drivers operating in Canada will have to adhere to the Canadian HOS requirements.
Additionally, the Department of Homeland Security (DHS) has issued an advisory stating that "employees supporting or enabling transportation functions" are included in its list of essential industries. DHS has also encouraged state and local governments to keep this in mind as they continue to enforce COVID-19 related restrictions.
Availability of Rest Area & Food Options
With many restaurants closing and limiting their orders to take-out only, truck drivers are finding it harder to find food and a place to rest when they're on the road. In response, the U.S. DOT Federal Highway Administration has allowed food trucks to operate in designated federally funded interstate highway rest areas.
Personal Protective Equipment
Good news! Truckers will be able to secure face masks more easily now. As announced on April 2nd, nearly 800,000 masks will be available for truckers on high truck volume lanes in over 30 states, and 200,000 will be delivered directly to carriers for distribution.
You can find the full list of specific distribution locations here.
Positive Long-Term Changes
One Trucking Info survey found that despite much of the chaos caused by the pandemic, several industry leaders noted positive changes for their businesses.
40% have developed new ways to serve their customers.
38% have improved their resilience and agility.
36% have increase work flexibility for their staff in regards to hours and location.
29% have adopted leaner operations.
18% have made investments in technology.
In that same study, Matt Leitz, general manager at Safeway Logistics Specialty Flatbed, shared that "we learned that it's possible to work remotely, and quite effectively."
The following are the changes that experts believe are here to stay:
➤ Higher usage of paper-less and contact-less technology ie. using electronic bills on the driver side of operations and conducting virtual meetings with customers on the sales side of operations.
➤ Greater percentages of office staff working from home. This allows companies to downsize their office and by doing so, save money. After all if employees that are working from home have been successful during the pandemic, why not save the extra money by allowing them to continue doing what they're doing?
➤ More efficient methods of on-boarding truck drivers ie. virtual orientations using videos and e-document signatures or hybrid orientations where drivers can arrive with fifty percent of orientation completed.
How to Handle the Impacts of COVID-19
Consider Temporarily Servicing High-Demand Industries
If the industry your fleet or manufacturing company serves has been negatively impacted or shutdown, you can utilize your current workforce in providing manufacturing and logistics for industries that have seen a spike in demand.
Reach out to logistics and manufacturing companies that have a customer base relating to groceries, medical supplies and other staple consumer products. Chances are these companies could use some additional assistance right now!
Delta Flight Products Flying Cargo-Only Charters
Delta Flight Products, a subsidiary of Delta Air Lines, is one of the companies that has decided to take on this strategy. In collaboration with the Global Center for Medical Innovation, they have decided to begin manufacturing face shields. This allows them to address the shortage of key personal protective equipment and medical supplies while continuing to operate during the crisis. They've also began flying cargo-only charters to help increase cargo capacity for shippers.
Carrying high demand products as part of company's new "normal" operations is becoming increasingly popular as a way for businesses to survive through the pandemic. Fleets & logistics companies can follow suit by reaching out to manufacturers experiencing high demand. The key is to offer help where it's needed.
Cummins Inc. Manufacturing N95 Masks
According to a Freight Waves article, Cummins Inc, a diesel engine manufacturer has also applied this approach in order to continue business operations through the pandemic. Using it's supply of materials that would normally be used to manufacture diesel engines, they are now manufacturing the N95 respirator masks that are in high demand. The companies primary clientele was originally truck manufacturers, but has temporarily transitioned to health care workers and medical facilities due to widespread suspensions of truck production.
If you're not quite ready to make that big of a transition, you can ask yourself the following question:
Can the low demand products I manufacture/deliver be positioned differently or slightly adjusted to provide value in relation to COVID-19?
Apply for the Paycheck Protection Program
Fleets & manufacturers with under 500 employees should apply for the program. If your business qualifies and retains all of its employees for a specified time period, you will be eligible for a forgivable government loan intended to cover employee salaries, wages, commissions, paid leave time, health insurance benefits, and state/local taxes.
You can read more about the requirements and how to apply here.
Take Virus Prevention & Containment Measures
This isn't an option. It's a must for transportation and manufacturing companies to ensure they are making every effort possible to keep drivers and plant workers as safe and healthy as possible. These are some precautionary measures your company can implement:
➤ Instruct drivers and plant workers to avoid the sharing of pens and other high touch items
➤ Utilize e-learning services to educate drivers and plant workers on sickness prevention
➤ Take drivers' and plant workers' temperatures before allowing them to start their day
➤ For drivers' that must enter healthcare facilities and hospitals during delivery, provide face masks and require that they be worn
➤ Allow drivers sufficient time to fully disinfect their truck before entering the vehicle
➤ To encourage sick employees to stay home, send out an e-mail blast ensuring that drivers or plant workers who call in sick will not be punished or negatively impacted in any way
➤ Take the temperature of any non-employees visiting before allowing them to enter your facilities
➤ Provide access and make employees aware of the telemedicine tools that are available to them
➤ Supply drivers with disposable gloves and require them to be worn during loading, unloading & fueling and then disposed immediately after each use
Provided that your company does not have enough protective equipment (face masks, disposable gloves, sanitary products, etc.), avoid shipping deliveries to highly infected areas until you're able to replenish your supplies.
Also, ensure that consequences are in place for workers who violate the virus safety and containment measures you've decided to put in place.
According to one survey conducted by Trucking Info, sixty-four percent of companies are providing employees with disposable wipes and cleaning materials, fifty-three percent are providing workers with face masks, and fifty percent are increasing their cleaning and sanitation regimen.
Limit In-Person Interactions
Successfully handling the COVID-19 outbreak is also dependent on your efforts to limit in-person group interactions as much as possible at your logistics, manufacturing or transportation facilities.
Think of all the in-person interactions your employees regularly engage in. Are they essential for getting the job done? Are there any alternatives? Just take a moment to think these questions over.
One fleet's co-owner, James Lamarca, shared in a Trucking Info survey that "we [System Freight] have learned that we can allow certain functions to be done out of the office, which will allow us to control overhead costs for office space going forward as we grow."
According to the Seattle Times, one manufacturer, Aviation Technical Services, has begun taking action to reduce the number of employees that are in the building at the same time by dividing its factory into zones and separating work shifts.
Your employees are critical to the successful functioning of your firm, society and can play a role in saving lives.
Provide Additional Supplies & Schedules
Take the necessary measures to reduce unnecessary health-related risks as they continue to do their job throughout this pandemic. For truck drivers especially, minimizing face to face contact can harm on-the-job mental health so try to keep this in mind when coming up with solutions.
For the first time, the Federal Motor Carrier Safety Administration (FMCSA) issued a national emergency order. The order suspended hours of service (HOS) regulations for truck drivers moving emergency supplies in response to the COVID-19 outbreak. Although this will speed up the process of receiving and delivering critical supplies, it may harm drivers’ mental & physical well-being.
To combat this, create a driving schedule that allows your drivers’ to drive for longer periods but with more frequent short breaks. Schedule these breaks ahead of time and check in with drivers’ to ensure they’re taking these.
Make sure your drivers’ are getting quality sleep during these longer hours by having them download sleep tracking apps, such as SleepScore. With no additional equipment needed, SleepScore offers the following features for more restful sleep:
➤ Detailed Sleep Analysis (breathing rate, body movement, and analysis on each sleep stage)
➤ Science-backed recommendations based on your sleep analysis
➤ Overall sleep score allows you to give a general guideline of the score drivers’ should aim to achieve for restful sleep
Also consider the availability of food and rest stop options for truck drivers. According to CNBC, at least 19 states have shut down dine-in options for restaurants or placed restrictions on capacity levels for establishments. You can read more about this here.
The Owner-Operator Independent Drivers Association is asking the Department of Transportation to issue directives to states to prevent the closing of rest areas in response to Pennsylvania’s announcement of a plan to close public rest areas/stops.
As a preventative measure, consider providing drivers with Meals Ready to Eat (MRE’s) and additional supplies they may need during long trips such as hand sanitizer, snacks, Over the Counter (OTC) medications, water, first aid kits, and caffeine.
If you're having trouble finding supplies, you can opt. for a pre-assembled care package. Lubrications Specialties Inc. has recently released free Trucker Appreciation Care Packages that will be available for a limited time while supplies last.
Maintain Open & Clear Communication
In regards to keeping your logistics, manufacturing or transportation company’s operations personnel in touch with drivers and plant workers, ensure that all staff & partners can communicate outside of the office.
Drivers should have the ability to access a VoIP phone system via mobile phone. Other staff and partners should also be able to use a VoIP phone system to communicate with drivers and keep shipments moving using their home computer or mobile phone.
Take a deeper look into your supply chain to understand where your vulnerabilities lie so you can take action to mitigate and spread out risk wherever possible.
It’s more important now than ever before to maintain open communication with your employees. This means having a reliable phone system that can be accessed by all employees whether they’re working from home, on the road, or in a plant.
In dealing with the overload of information and ever-changing regulations and guidelines, companies are relying on phone communications for stability. In one Trucking Info article, The Roadmaster Group explains that they keep drivers and employees informed by engaging in more frequent phone calls. With 85% of their office-based staff working from home, over-communicating has been key.
Voice and video conferencing platforms like our cloud-based unified communication and collaboration tool, Arbeit Connect, can help take the stress of coordinating internal and external communications off your shoulders. We provide the reliable VoIP service you need with no limits on talk time, along with easy to use video & group messaging features all in one platform at one affordable price.
Clear communication is your superpower when it comes to keeping your employees healthy and productive.
Send your employees daily emails with industry-relevant updates and guidelines from the CDC and WHO explaining how they apply to their specific role. Your company should also map out what drivers can do & how you can support them in potential scenarios such as a driver becoming ill while on the road or being exposed to the novel coronavirus. This will ensure that everyone in your company knows how and why to take the necessary precautions.
Provide Financial Security
In whichever way is feasible for your company, provide some form of financial security for your workers. One way of doing this is to incentivize taking sick time off. Often times employees avoid taking time off when sick because they will face financial consequences if they stay home. If you haven't already, implement an emergency paid time off policy that compensates workers when they take up to a certain amount of time off due to sickness.
The last thing you want is an employee who is sick or was potentially exposed to COVID-19 showing up to work and infecting the rest of your warehousing or plant staff. That will cost you and your employees more in the long run. In a time where there is so much uncertainty, it helps to provide your staff with some certainty about their finances & ability to put their health first in this way.
The Roadmaster Group, a family of specialized transportation companies, has taken this strategy a step further by implementing a new pay structure that rewards owner-operators & drivers for each mile driven.
Show Appreciation for Your Truck Drivers & Plant Workers
Whether it's a free lunch, gift card to their favorite store, temporary pay increase or bonus, your company must explicitly show appreciation for its truck drivers and plant workers.
If your company has seen a spike in demand as a result of COVID-19, consider providing hazardous duty pay for employees that are unable to work from home due to the nature of their job.
Doing this might actually help you cut costs in the long run, because it costs more to hire new employees than to give your current team a raise.
This will also help boost employee morale during these trying times.
Risk Management for The Future
For the future, recognize that decreasing costs may significantly increase the risks your business is exposed to during times of crisis, such as COVID-19. If increasing spending isn’t feasible for your firm, there are other steps you can take that don’t involve spending more.
Prepare Your Supply Chain & Workforce for Potential Crises
Although it’s nearly impossible to be fully prepared for the unknown, these are the preparations that logistics, manufacturing and transportation companies can make to reduce risks to their supply chains and workforce for potential crises in the future.
Map Out Upstream Suppliers
Are you aware of all the working pieces in your upstream supply chain? This can be especially difficult if you rely on suppliers that are far from the markets you serve. Reach out to suppliers to get the full picture of what your upstream supply chain looks like. Try to trace back to the origin of raw materials and understand the flow of those to your immediate suppliers.
An article by Harvard Business Review recommends mapping out and developing relationships with your entire upstream supply chain so you’ll know who to reach out to when there are potential shortages in times of crisis. You’ll also be better able to assess the overall quality of your upstream supply chain and determine if any changes need to be made to better prepare for potential crises.
Revisit or Develop a Business Continuity Plan
You can find peace of mind and ensure the continuation of your logistics, manufacturing or transportation company's operations by revisiting or creating a business continuity plan. It may take some additional time and resources to do this, but you’ll protect your business against additional risk-related costs in the long run.
Considerations for Developing a Plan
➤ Outline which & how essential processes can be automated
➤ Have a plan for implementing remote work options if necessary
➤ Find alternate workforces you can turn to if your primary workforce is compromised
➤ Ensure that you & your team have the technology in place to facilitate remote work for essential activities (such as moving & tracking shipments) and other communications internally and externally
➤ Have an IT professional ensure that you and your team have a strong cyber-security plan in place for remote work
➤ Determine the changes that will need to be made to your sick leave and paid leave policies in the event of a crisis
➤ Define clear non-discriminatory guidelines for remote work based on employees’ positions
➤ Have a specific plan for each type of crisis (natural disaster, pandemics, bad publicity, etc.)
➤ Operate in the cloud for more flexibility in regards to remote work, transferability of information, and overall reliability for the continuation of business operations
➤ Take note of the concerns you and your team have right now and address these in your business continuity plan for the future
Re-Evaluate Your Supply Chain
In the logistics industry and manufacturing sector diversified, local and backup suppliers are essential for ensuring the continuation of business operations in the event of a crisis. According to Harvard Business Review, ensure that your supply chain has these qualities and perform a cost-benefit analysis that allows you to make accurate decisions on the following:
➤ Diversify supplier locations
➤ Choose suppliers that are close/local to the major markets you serve
➤ Have a supply chain backup plan that allows you to react quickly to various disruptors
➤ Have a second source for each of your suppliers
➤ Choose second sources in different locations than your primary sources
Next Steps: How Can We Help You?
Whether your logistics or manufacturing company uses our products or not, please don’t hesitate to reach out if you have any questions about transitioning team members out of your building or using/setting up a VoIP phone system to facilitate that.
The team at Arbeit is very familiar with the idea of working remotely and we’d love to provide advice on how you can make a smooth transition and continue business operations throughout the COVID-19 pandemic. Our thoughts are with you and your business during this difficult time. Stay safe and healthy!
How You Can Reach Us
Send an email to email@example.com
Give us a call at (844) 444-4401
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Additional COVID-19 Resources
Disclaimer: This article is not intended to be medical or legal advice.