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How Can Supply Chains Beat COVID-19?

By Miriam Bello | Thu, 03/26/2020 - 13:55

Supply chains of industries all over the world are being affected by the COVID-19 outbreak. Some companies are heavily reliant on China’s raw materials, which limits or stops their production. Others have had to close plants to reduce exposure to the virus. The automotive industry sadly portrays a good example of how logistics and supply chains were affected. From Europe to Mexico, production plants had to close, some due the lack of components from China.

However, there are exceptions, like in the case of the agricultural vehicle manufacturer John Deere that is expected to spend US$40 million on expedited freight to avoid disruption on its supply chain. General Motors is another company preventing disruption by paying chartered supplies for its North American truck production.

The electronics industry was also quick to react. Samsung, for example, decided to shift part of their phone production from South Korea to Vietnam as COVID-19 was quickly spreading in South Korea. The company is also chartering parts from China to Vietnam.

The food Industry had to think of a whole different strategy to survive. Restaurants like The Morris, in San Francisco, changed their market strategy to a delivery service but keeping the fine dining menu. Others, like many Mexican restaurants, closed completely or changes their menus to a simpler pick-up version to avoid massive losses or risk their existence in the market.

Changes in logistics operations have also had an effect on port operations. Two Miami port terminals scheduled temporary shutdowns because of low import container volume, while the port of Houston has just resumed vessel operations at its container terminals after a 23-hour shutdown caused by a worker who had been at the sites and tested positive for COVID-19. The truck industry has been similarly tested. A good example is the US, where the Federal Motor Carrier Safety Administration (FMCSA) issued a national emergency declaration to establish hours of service specifically allocated to vehicle drivers transporting emergency relief goods. The Cybersecurity and Infrastructure Security Agency has also drafted an initial list of “Essential Critical Infrastructure Workers” to help state and local officials as they work to protect their communities, while ensuring continuity of functions critical to public health and safety, as well as economic and national security.

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Miriam Bello Miriam Bello Journalist and Industry Analyst

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