LM reader survey examines impact and effects of the pandemic, four years later

While the onset of the COVID-19 pandemic officially hit the four-year mark in March, its collective impact on freight transportation, logistics, and supply chain operations remains intact, albeit to varying extents.

Those extents, in some cases, pertain to different industry verticals and their respective market conditions, to be sure. And, as has been previously reported by LM, the pandemic brought about heightened ebbs and flows, which came about from the rapid shutdown of the economy in early 2020, which subsequently saw a significant increase in demand, leading to an upended supply chain, with fewer people working, elevated freight rates over an 18-to-24-month period, beginning in March 2020, and what also turned into a lingering inventory imbalance, too.

Fast-forward four years later, and it is apparent that the pandemic’s shadow, in terms of its logistics impact, is still there, while perhaps not being quite as dark as it once was. But, at the same time, challenges remain—like staffing, the Red Sea crisis, and clear signs of rising energy costs—and more could be coming, too, as companies continue to take steps to re-evaluate, or reset, their supply chain operations. That approach is clearly needed, given that global crises and calamities don’t introduce or announce themselves, rather, they occur and arrive, leaving supply chain stakeholders off-guard and needing to quickly adapt and make the needed change and adjustments.

Ways in which industry stakeholders have adjusted to a post-pandemic market, coupled with how they are moving forward, were front and center in a Logistics Management reader survey of 156 freight transportation, logistics, and supply chain stakeholders.

A key survey finding showed that nearly two-thirds, or 66%, of respondents said that their logistics and supply chain operations are no longer being impacted by the pandemic, with the remaining 34% saying they are.

For the former, reasons cited by respondents ranged from “having adjusted to the new normal,” to improvements in supplier reliability, transit times, and freight rates, to corrective measures in place from strategic sourcing and carrier mode discipline.

An improving inventory outlook was cited by a shipper respondent, whom noted that his company’s “inventory positions are better and there is less disruption where we have to reject or delay customer orders.”

And for the latter, companies still dealing with the impact of the pandemic, reasons cited included: labor-related challenges; container availability; inflation; and supply constraints, among others.

“We are facing what many organizations are facing, with the fact that we had large volumes in warehousing and transportation during the pandemic, but now volumes have fallen off significantly,” said a shipper respondent.

Another shipper observed that many suppliers have reduced manufacturing capacities since the pandemic, which has, in turn, translated into significantly longer lead times for parts and repairs.

As for pandemic-based “lessons learned” four years later, inventories were front and center, for respondents’ comments, with a focus on things like: needing more than just-in-time inventory to avoid another situation like the pandemic; using longer lead times and planning ahead; leveraging nearshoring to reduce supply chain risk; and reducing reliance on a single company for logistics services.

More than 60% of respondents stated that they are still taking steps to reset their supply chain and logistics operations.

These steps were comprised of: having firm contingency plans in the event of the unexpected; carrier selection processes; a sharper focus on domestic supply chain planning and operations; reliance on upstream and downstream suppliers; and network optimization planning.

“Pandemic procedures are no longer necessary; however, ‘Black Swan’ events have taken its place,” said a respondent. “We no longer allow fear to drive operations. Planning has replaced it, as has a more dynamic approach to forward-looking plans.”

Brooks Bentz, LM columnist and supply chain consultant, referred to a comment made to him from a former colleague, which said “experience is recognizing your mistakes as you are repeating them,” in looking back at pandemic and comparing it to the current state of the supply chain.

“I don’t know how much we collectively really learned.  Time will tell. We found that, despite all the chatter about resilience and responsiveness, the supply chain was far more brittle than anyone thought. So, what did we do? We threw money at it by amping up inventories and paying outlandish prices to move product. While that panic attack has largely subsided, has much in the underlying network changed much?  It doesn’t appear so. I’m constantly surprised – although after all this time, I shouldn’t be—by how many shippers and beneficial cargo owners appear mired in the sand trap of past practices and exhibit what still seems to be a relatively consistent, albeit subtle, resistance to experimenting with new and better ways to run operations and the technologies to enable it.” ,” said Bentz.

Given all the disruptions in the supply chain that were experienced, Bentz observed that it would seem that there would be a greater sense of urgency and a “great leap forward” should be in the works.

“That does not appear to be the case,” he said. “AI will most assuredly disrupt and significantly transform the way supply chains operate, but it’s only in its infancy at this point, so we just have to wait and see how it plays out.”