Above the Fold: Supply Chain Logistics News (April 17, 2020)

It was more of the same bad news this week with regards to the impact COVID-19 is having on supply chain and logistics operations. But there are some bright spots, like the news that Convoy is teaming up with shippers and truck drivers nationwide to address urgent food bank needs. Here are some details from the press release:

Convoy…announced that the company will pay the trucking costs for any business in the U.S. wanting to donate a truckload of product to their local food bank. In an effort to address the growing food shortages facing millions of Americans impacted by COVID-19, companies like Land O’Lakes Inc. are partnering with Convoy to donate critical items to food banks across the nation. All businesses are eligible to participate in the program.

Convoy’s new sustainability program taps into Feeding America’s network of 200 centralized food banks and 60,000 localized soup kitchens and pantries. Participating shippers reach out to Convoy with a full truckload donation and are matched with a food bank or soup kitchen, usually within 40 miles or less of their facility. Convoy’s Digital Freight Network then finds, books, and pays a truck driver to deliver the goods to that local food bank. In addition to helping shippers support their local communities, this program also provides truck drivers with work to deliver the much-needed donations.

Earlier this month I wrote that “in these difficult times when so many in our communities are being affected by COVID-19, cancer, hunger, diabetes, and other challenges, let’s make a difference together.” This effort led by Convoy is a great example.

Another bright spot is the American Logistics Aid Network. The organization launched “the ALAN Supply Chain Intelligence Center (http://alanaid.org/map), which provides a cloud-based, real-time view of the latest COVID-19 impacts via an easy-to-use map. The map includes the status of roads, ports and airports as well as the latest policy changes at national, state, local and county levels.” According to the press release:

The ALAN Supply Chain Intelligence Center is provided by ALAN as a free-access layer on the Riskpulse platform, a tool used by many global companies and government entities to visualize and analyze supply chain risk. ALAN has mobilized a team of volunteers who update the dashboard daily from the many disparate government sources that share closure or waiver information.

Feeding America and ALAN are two of the charities our Indago members support via their participation in our supply chain research community (along with JDRF, American Cancer Society, and Make A Wish Foundation). If you’re interested in making a difference too and supporting these charities, I invite you to join Indago. There is no cost to join, the time commitment is minimal (less than 4 minutes per week), and your participation is completely confidential. It’s a win-win value proposition: you receive valuable market research that helps you make smarter business decisions, while our charity partners receive valuable donations that help them make an extraordinary difference in lives every day.

Moving on to the rest of this week’s supply chain and logistics news:

Transportation Takes A Hit (Like Everyone Else)

“Shipment volumes dropped 9.2% vs March 2019 levels, but the index improved sequentially for the second straight month off the January bottom,” according to the Cass Transportation Index Report for March 2020. “April will undoubtedly be worse and likely the worst month in a long time. There has been a clear divide between winners and losers of these shut-in orders with demand for groceries, home improvement, e-commerce, and consumer staples increasing, while restaurant, auto, and (mall) retail falling to practically zero volume.”

This “fall off in freight and rates prompts layoffs as trucks sit idle,” writes Jason Cannon in CCJ. Here are some excerpts from the article:

“Rates are not paying enough to keep the doors open,” wrote a for-hire carrier with fewer than 25 units. Another respondent, a fleet in the Pacific Northwest with less than 25 trucks, said the company had “parked all trucks.”

Not all staffing cuts are coming from the top down, as one carrier noted that “25% of our owner-operators have chosen to stay home during this time,” and another writing the company had a “fleet of 18 power units sitting.”

Carriers are also getting concerned about shippers being able to pay. As reported by Emma Cosgrove in Supply Chain Dive

J.B. Hunt’s top concern, aside from the freight swings caused by closed stores and rushes on essential goods brought on by the coronavirus, is shippers’ ability to pay their bills, said interim CFO John Kuhlow on a Tuesday earnings call with analysts. 

“We’re beginning to see an increase in certain customers reaching out to discuss liquidity concerns, and while we understand their liquidity issues, we have to enforce our terms that we have agreed to,” Kuhlow said. 

Translation: I feel your pain, but you still have to pay me.

Finally, truck drivers continue to face many challenges on the road, including finding food and bathrooms. According to a Bloomberg article:

Ten drivers, representing those who drive for themselves, small companies, and large carriers, said in interviews that they’ve struggled over the last month to find hot meals and clean restrooms outside of truck stops throughout the continental U.S. A few long-haul drivers say they’ve resorted to scrounging for snacks at rest stops and using unsanitary port-a-potties outside pickup and delivery spots whose staff, afraid of the virus, won’t let them inside to use the bathroom.

I’m not sure that’s what people mean when they say #ThankATrucker on social media.

And with that, have a happy weekend!

Song of the Week: “RUNAWAY” by half alive