Even during the toughest times of global crisis, supply chains must keep moving and goods must reach their destinations. During the COVID-19 pandemic, freight shipping businesses will need to move nimbly and with great care, keeping in mind their commitments to their customers, to their employees, and to global health.
Here are six key tips that will help maintain a stable and profitable shipping operation during the unfolding COVID-19 pandemic. The common threads? Accepting inevitable instability, building for resilience, and putting people first.
1. Prioritize health and safety for everyone.
During a pandemic, the health of your employees, clients, and vendors should be the number one priority in all of your operations. Follow COVID-19 guidelines and best practices issued by health and logistics industry authorities, and remember that truckers, freight handlers, sailors, and delivery drivers are on the front lines of the pandemic. From sailors trapped at sea to truckers who can’t find an open rest stop, the burden of COVID-19 falls particularly heavily on these individuals.
Good logistics health and safety practices will look a little bit different for every company but, in general, here are some best practices to employ:
- Provide employees with appropriate PPE for their position.
- Implement social distancing measures in warehouses and other logistics centers.
- Make sure your company health insurance covers COVID-19 testing and treatment.
- Sanitize containers and vehicles regularly.
- Provide adequate paid sick leave so that employees don’t come to work while sick.
2. Prepare for the long haul.
Everyone wants the world to get back to its normal and healthy state as soon as possible, but there’s simply no telling exactly what kinds of disruptions will affect supply chains in the next year. A vaccine for the novel coronavirus is likely to be a year or more away, meaning that a true re-opening of the world economy may not be possible in 2020 (although many sectors and geographic areas will almost certainly be reopened at some level as infection levels ebb and flow).
Thus, shipping businesses need to be ready for continued disruption in their markets from the novel coronavirus. The Chinese supply chain is of particular concern, as many Chinese factories, ports, and shipping lines will likely continue to operate at reduced capacity or experience availability fluctuations throughout 2020. Now is the time to concentrate on building a deeper and more resilient network of connections that will enable your freight business to better navigate a year that’s sure to be unpredictable.
3. American freight companies shouldn’t count on help from the US government.
In an ideal world, governments would be standing at the ready to provide targeted capital injections to businesses that need them most in times of crisis. Unfortunately, as we’ve seen from the uneven and often clunky rollout of the U.S. government’s stimulus package, the mechanisms often don’t function smoothly, and Washington’s perpetual partisan gridlock means that it’s hard to know when another relief bill might be coming.
Thus, freight companies based in the U.S. should realize that government intervention isn’t a solid ground to stake your business on right now. Of course, some businesses will need help from the government to survive, but it’s important to put all options on the table, including cutting expenses, taking out short-term private loans, and negotiating temporary payment plans with creditors.
4. Communicate early and often with stakeholders in your supply chains.
In times of crisis, it’s more important than ever that every element of a supply chain be coordinated. Changes in supply chain status can occur quickly as federal, state, and local agencies respond to conditions on the ground. Backed-up ports, closed warehouses, and sudden rate spikes are all facts of life in the reality of pandemic logistics, so it’s critical to keep lines of communication open as conditions change.
Fortunately, today’s logistics technologies allow a degree of communication that’s never before been possible. Using logistics software, bills of lading can be automatically generated and signed so that drivers don’t have to risk face-to-face contact with warehouse staff, cargo can be tracked in real-time for maximum transparency, and stakeholders around the world can be coordinated at key action points to foster compliance and efficiency.
5. Allocate appropriate resources for maintaining compliance.
Strict compliance during a pandemic is key, so pay close attention to guidance issued by agencies like the CDC and FMCSA. Make sure that your vessels and/or vehicles are carrying all required insurance and that your business has any required surety bonds, such as freight broker bonds if your business is a freight brokerage.
Even after the worst of the COVID-19 has passed, health and safety regulations for all industries are likely to undergo significant changes designed to prevent resurgent outbreaks and future pandemics. Be ready to devote resources to compliance in the brave new world of regulation that will emerge from COVID-19.
6. Stay agile and adjust your business to demand.
Hard times such as recessions almost always necessitate some shifting of business models. With demand at rock bottom levels in many sectors, businesses are under pressure to develop innovative solutions to meet the demand that currently exists. For instance, businesses that typically ship non-essential goods are seeking out contracts for shipping high-demand items such as medical PPE, and businesses with China-centric supply chains are building wider global networks.
Liquidity and cash flow are key for developing agility in your logistics business. A business with solid cash flow can more easily allocate resources as needed and pivot to alternative solutions, so devote some time to practices that can help improve cash flow, such as developing new inventory strategies.
Above all, unpredictable times call for strong leadership and decisive judgment. Eventually, the world will be able to put COVID-19 behind it but, until then, freight shipping businesses will have to do what they’ve always done: Evaluate the situation, make do with available resources, and take the necessary steps to keep the economy running.