Resilience and creativity in a crisis

posted on 27th May 2020
Resilience and creativity in a crisis

The coronavirus pandemic has created a situation not previously experienced in our industry. While some of our members are serving several active industry verticals, many are experiencing business reductions above 50%.

The most common concern expressed is the ongoing TSA cargo security enforcement despite the lack of normal freight volume. Cargo inspectors are extraordinarily active and carrying out inspections on our facilities throughout the country. The agency has not placed these agents on leave, and as a result, they continue to implement their regular inspection routines, through both physical and virtual visits to our facilities.

Of course, many of our members are also concerned about finances and, despite application filing challenges, have received financial assistance through the Paycheck Protection Program and other loans available through the Cares Act.

Supporting members
Our most significant means of support to members has been through constant communication using our emergent ‘Airmail’ email system, which provides regular situational updates. We have also started a COVID-19 Resource Page on our website, where members can access relevant regulatory and other informational links. Also, we have a webinar scheduled next week on technology implications arising during the pandemic.

Freight forwarders are predominantly small or medium-sized businesses, mostly located near airports in metropolitan areas across the country. The sudden reduction in passenger flights due to the pandemic, along with the severe economic downturn, has hit their businesses hard. We also believe that while the new government financial relief packages are helpful, many of our members have no access to their primary niche markets. We are therefore working with Capitol Hill appropriators to enable forwarders and their cartage trucking partners to receive continued funding of the Paycheck Protection Program as well as cash grants and zero-interest loans. Hopefully, we will see this additional help in the anticipated next financial relief package.

Our transportation and logistics network will lead the way to full economic recovery. Still, the freight forwarding industry needs to be ready and not in a state of diminished capacity as the pandemic subsides.

During this time, we need to support our passenger airline partners as much as possible and are glad that many have stepped up and are now offering cargo-only flights using their passenger planes. These trips keep freight moving, especially for essential medical products, perishables, and vital technology commodities that are important to our economy and recovery. Several of our members continue to utilize hundreds of these flights that are currently flying with large volumes of cargo.

Resilience and creativity
In addition to the passenger plane cargo flights mentioned, our industry remains as adaptable, creative, and resilient as ever. Forwarders continue to provide innovative logistical solutions that include complex routings to speed shipments around bottlenecks to broad geographic distributions of personal protection equipment to health care workers throughout the country.

Contribution to society
The most significant opportunity emerging from their pandemic has been our industry’s ability to help people in need. Several of our members are contributing no-cost transportation services for charitable organisations. These shipments often include essential medical in perishable food supplies shipped through those who need the items most.

Potential lessons
COVID-19 has taught forwarders several vital lessons, but probably the most significant is that diversification is essential. Many of our members focused on specific industry niches that were adversely impacted by the pandemic. As a result, business strategies may focus on serving several verticals as a hedge against disruption.

The forwarding industry has stayed mission flexible, learning that several administrative jobs can be home-based. Of course, there will always be the need to move the boxes in a warehouse setting, but with robust technology and internet connectivity, providing successful customer service away from the traditional office is quite possible. This efficiency may lead to a reduction in office space needed and further emphasis on industrial space requirements instead.

Finally, the globalism of supply chains is likely to continue, but we expect that sourcing will become more ironclad against disruption. This fortification will happen through the geographic diversification of manufacturing and the development of supply chain technology that could more effectively manage future risks. The essential lesson learned is that wherever customers choose to produce their products, freight forwarders will always be a crucial part of their logistics team and indispensable in the upcoming recovery