Safeguard your logistics operations during a crisis

Cases of COVID-19 are on the rise, so it’s more important now than ever to protect your business, your employees, and yourself.

Mothership
Jul 10, 2020 · 5 min read

Delivering help during crisis

Whenever a crisis strikes, logistics operations are pivotal to relief efforts and the delivery of emergency supplies. This relief is especially challenging given the strain on logistics networks caused by added regulation, general fear of the pandemic, and limited capacity and unpredictable costs due to the prioritization of essential goods.

Logistics organizations like ALAN, the American Logistics Aid Network non-profit, provides supply chain assistance to disaster relief organizations when crises strike. In 2014, ALAN sent more than 60,000 tons of goods to Liberia and Sierra Leone to help stop the spread of the Ebola virus.

In contrast, ALAN and similar organizations are struggling with their COVID-19 response. Grocery partners that normally provide food for distribution to those impacted by natural disasters have seen significant decreases in donations as demand for groceries has increased dramatically due to quarantine. Equipment providers, drivers, and other logistics professionals are similarly constrained. So organizations in need are looking to the government for emergency aid.

Federal response focuses on keeping freight moving

The Department of Transportation has worked largely within its regulatory framework to provide relief and support both for truckers and the industries that rely on them. The federal government’s goal has focused largely on making it easier for drivers to move emergency freight.

On March 13th, it issued a national emergency declaration to provide hours-of-service regulatory relief to commercial vehicle drivers. Hours-of-service and other rules were relaxed specifically for the delivering of emergency supplies. We’ve also seen DOT waive some CDL testing requirements, now extended through September 30, allowing trainee truckers to operate without a CDL for three months. And it has relaxed some requirements for companies that have suspended their operations.

The efforts the federal government has taken to protect small businesses also impact truckers significantly. About 90% of motor carriers are small businesses, according to the ATA which has put out public support for COVID-19 legislation including the Paycheck Protection Program (PPP) in late March.

Many in the industry have pointed to the good news that 80% of Chinese truckers are now back on the road, but U.S. drivers are still at high risk of infection and many are opting to stay home.

How COVID-19 is affecting the freight economy

According to DAT data, spot market truckload rates hit a four-year low in April, but activity significantly increased as different states began to reopen, especially Florida, California, and Texas. Van lanes have been generally lower than last year and tha continued even through early harvest months. Dry van volume, which represents some 70% of truckload shipments, have seen prices rise overall but that has started to plateau.

Even as Texas hit a record-high COVID-19 case count on June 16, lanes including Houston to Atlanta and Houston to New Orleans and Dallas to New Orleans all saw dramatic price increases. Backhaul markets, such as Seattle and Denver, saw declines more significant than their traditional drop offs.

Overall, the U.S. logistics industry has seen a decline in commercial transport activity, with activity at 85% the normal rate. New York appears to be one of the most impacted locations, down to 70%, and some decline is directly COVID-19 related. Heavy-duty industries are less impacted and closer to pre-pandemic volumes compared to light-duty, though there have been greater gains in the light-duty space since mid-April.

Despite this, trucking jobs rose by 8,100 in June — below 2019 levels but proving to be more resilient than many other industries. It’s estimated that some employment levels are being maintained due to the PPP program.

The danger to freight professionals

Logistics professionals live and work in every county in the U.S., and though deaths related to COVID-19 are falling, many regions are seeing growing hospitalization rates. The CDC’s recent outlook states that we may see a spike of infections, hospitalizations, and deaths in the Fall. Dr. Fauci suggests that new infections could surpass 100,000 per day if outbreaks aren’t contained in areas such as Florida, Texas, and seven states reporting record single-day cases at the end of June.

If these outbreaks continue, logistics professionals will continue to be at risk. Warehouses are often tight spaces, drivers interact with multiple people each day, and the sheer volume of activity at ports makes them a potential vector for infection. According to FreightWaves, truckers are at a high risk of contracting COVID-19 due to their lifestyle on and off the road. Adapting operations to protect everyone’s health and safety must continue to be a top priority.

Resilience through reliability

Not only is COVID-19 likely to continue making freight prices volatile, but the health risk to drivers could potentially create gaps in your company’s ability to move freight. Mothership can help you mitigate this risk by guaranteeing access to unlimited capacity at fixed rates.

If demand continues its upward trajectory but capacity decreases due to infection or economic hardships that are causing some truck companies to declare bankruptcy, the market will strain with the potential for rising costs for your business. These factors could also limit your company’s ability to move goods as you need, risking relationships with your customers. Automated freight forwarding and dispatch technology should be your first line of defense against this.

How freight tech protects physical health

The threats and protection measures identified by health professionals and logistics leaders highlight the need to minimize interactions, ensure cleaning and sanitation, and tracing the movement of people alongside freight.

Contactless digital forms managed by platforms like Mothership can be a tremendous help in minimizing risk of exposure to disease. Details in these freight agreements indicate important information to dock managers and allow for successful pickups and deliveries while still maintaining six feet of distance from others, even when collecting digital signatures.

Older systems can make it easy to understand where cargo is and how it moves, but often struggle to trace the people who are right there interacting with the freight and each other. We can track every truck in real-time with accurate location data, including the full route traveled. While usually this is used to help drivers conserve fuel and reach destinations faster, fleet owners can access these dashboards to understand risk and help keep their teams safe.

Smart tracking, information sharing, and clear communication about how your freight moves are direct ways you can protect the entire supply chain. By powering this and making it easy for fleet owners and companies moving freight to adjust requirements or staff on-the-fly, you can be sure that partnering with Mothership will help keep your business resilient during a health crisis.

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