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Issue 4 2020 - FBJNA


///PERISHABLES


COVID-19 Impacts All Transportation Providers


By Peter Buxbaum


The COVID-19 pandemic and the precautions that were taken in its wake have caused logistics disruptions for shippers and carriers alike. As China’s factories shut down and global consumer demand tanked, ocean carriers canceled hundreds of port calls, leading Drewry to predict a contraction in the shipping container fleet this year. Lower container volumes


at United States ports weighed on the intermodal business of North American railroads, as well as on truckers. Data from the International Air Transport Association show airfreight is on track to fall 15% to 20% this year. Many factories in China have


reportedly reopened, potentially providing goods for transport. But it remains to be seen whether demand will be restored and how fast. It’s already clear, however, that e-commerce has benefitted from the pandemic. That has implications for logistics and could represent a signal of a new normal emerging.


Priorities


Besides implementing pandemic-related precautions,


logistics providers have prioritized delivery of COVID cargoes and have supported local responses. Hawaiian Airlines, for example, set up a new service to Molokai aſter the main grocery store in rural Kaunakakai closed. United Airlines transformed one of its cargo facilities in Houston into a food distribution center to aid the Houston Food Bank. COSCO SHIPPING donated cash and medical supplies to various authorities and institutions around the world, including the Secaucus city government and the Hackensack University Medical Center in New Jersey. There have also been


logistics health scares. The CMA CGM Marco Polo carried a sick crew member who later tested negative for COVID while the container ship was off the coast of Spain. Several crew members from the


Gjertrud Maersk


were hospitalized in Ningbo, China, and one tested positive for COVID-19. Nearly 160 employees at a YRC Worldwide call center in Sioux Falls, South Dakota, fretted that their facility could become infected, aſter a neighboring Smithfield Foods


plant recorded hundreds of COVID-19 cases and at least one of their own reportedly tested positive.


Reverberations


COVID may have started in China, but shipment delays and cancellations soon reverberated through U.S. ports and throughout the supply chain. Logistics providers have innovated to get medical equipment and pharmaceuticals to where they are needed and to accelerate deliveries of other products, such as food and household goods, that are experiencing higher demand. COSCO Shipping was called


upon to transport goods in and out of Wuhan, China, the original COVID hot spot. COSCO opened new routes for


trains operating along


the land-sea trade channel in West


China, shortening


haul distance and improving efficiency. On the US West Coast, an imbalance of empty containers resulted from fewer containers moving from ports inland and less freight being shipped back to ports.


Freight Line noticed its business had also changed. The trucker experienced a 3.9% decrease in LTL tons per day and a 5.1% decrease in LTL shipments per day but a 1.3% increase in LTL weight per shipment. “As the domestic economy


changed, so did our mix of business,” said Greg C. Gantt, Old Dominion’s president and CEO. “We experienced a significant increase in our


“The acquisition [of Performance


Team] will strengthen our ability to deliver products and solutions that meet our customers’ end-to-end supply chain needs.”


-- Vincent Clerc, A.P. Moller – Maersk.


“To combat this bottleneck,” said Tom Williams, group vice president for consumer products at BNSF, “we worked with our carrier partners to reposition equipment and empty containers and increase capacity to continue distributing essential goods without delay.” Demand for trucking


services have declined during the pandemic, as might be expected, but Old Dominion


average weight per shipment.” BNSF customers like


Walmart and Target have seen large increases in grocery and paper product demand as well as a surge in online and store pick-up orders. Kimberly- Clark, which manufactures toilet paper, diapers,


personal hygiene products, saw a huge increase in demand as consumers started stockpiling these supplies. “As they’ve worked to


match supply with this newfound demand, we’ve adjusted our operations accordingly [by stationing an intermodal solutions team around the US and Mexico],” Williams said. “As shipments arrive on our network, we work


with customers to


prioritize delivery of essential goods and stay in constant communication with them about their needs.” The increasing demand


for items like canned goods and rice has its mirror image in sluggish conditions for refrigerated loads, resulting in a rail transportation casualty. Union Pacific announced in May that it was ceasing Cold Connect operations, a multimodal service that connected UP cold storage and distribution facilities in Delano, California, Wallula, Washington, and Rotterdam, New York. On the air cargo front,


and


Wen-Parker Logistics began chartering Ohio’s first direct flights from Vietnam through Rickenbacker International Airport in Columbus, Ohio, in mid-May, carrying personal p ro t e c t ive equipment for


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