Experts Stress Partnerships as COVID-19 Disrupts Supply Chain
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Transportation agencies and planners should rely on communication and partnerships as they respond to immediate needs and assess long-term effects associated with the coronavirus. That was the assessment by Anne Strauss-Wieder, director of freight planning for the North Jersey Transportation Planning Authority.
Strauss-Wieder discussed COVID-19’s impact on the supply chain during a webinar hosted by the Transportation Research Board on April 8. NJTPA is a metropolitan planning organization representing 6.7 million people in the 13 counties that make up northern New Jersey.
A part-time lecturer at Rutgers University, Strauss-Wieder emphasized the importance of building on existing coalitions and relationships. She said planning organizations and state agencies should think in terms of which partners they can get together with on conference calls to address immediate issues — and noted that these partners can represent industries other than logistics.
“This situation is rapidly evolving, and everything needs to be thought about immediately,” Strauss-Wieder said. “We all recognize that we’re in this together. Supply chains don’t stop at the border. It’s not just transportation professionals and economic professionals trying to noodle out the situation.”
Industrial work and distribution activity has long been important to New Jersey. Strauss-Wieder said the state employs more than 500,000 workers in transportation, logistics and distribution jobs. New Jersey contains more than 1 billion square feet of industrial space.
The coronavirus has affected countries, states and communities, according to Strauss-Wieder. Panel moderator Michael Meyer, senior advisor at WSP USA, referenced a study from the Institute for Supply Management that was published March 11 and indicates nearly 75% of companies have experienced supply chain disruptions due to coronavirus-related transportation restrictions.
“Clearly, the whole impact of COVID-19 on all supply chains is really significant and serious, and deserves some important consideration,” Meyer said.
Changes in retail and manufacturing demand because of COVID-19 have split shipment velocity needs. Paul Bingham, director of transportation consulting at global analytics firm IHS Markit, explained that most shippers of retail or manufacturing plant goods want their deliveries slowed down, while shippers of personal protective equipment want shipments sped up.
Bingham described the coronavirus pandemic as the “biggest supply chain shock since World War II” and warned that its impact will be worse than the Great Recession. He said ocean container trade is down 44% since March 2019.
Additionally, Bingham emphasized the importance of supply chain geography, pointing to the decline in auto sales as an example. Because of the coronavirus, there has been a 41% drop in national weekly vehicle registrations. Two states that have been hit hardest by the virus — New York and California — have experienced the greatest decline.
“Map out your supplier geography and their supplier networks,” Bingham said. “Monitor governments' trade and freight operations restrictions.”
Strauss-Wieder also advised that the coronavirus could have long-term implications for the stores and businesses that people were accustomed to shopping at before the outbreak.
“In a situation where there’s been a major disruptive event in a specific region, up to 60% of local businesses fail within the next few years after that disruptive event has occurred,” Strauss-Wieder said. “When we start looking at longer-term community and business continuity, we have to keep that in the back of our mind right now.”
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