05/27/2020

Insights Into COVID-19’s Impact on Supply Chain: NFI Thought Leadership Round-Up

2 Way Road

Businesses throughout every industry continue to feel the impact of COVID-19 throughout their supply chains across the globe. Nearly 75 percent of companies surveyed by the Institute For Supply Chain Management in March reported supply chain disruptions due to pandemic-related restrictions, a figure that has undoubtedly risen over the past couple of months.1 In addition to transportation restrictions, the impact on labor within distribution facilities has been significant, while the change in supply and demand has also disharmonized many businesses’ supply chains. While the specific long-term ramifications of the Coronavirus on the supply chain remain to be seen as different countries begin to normalize, NFI’s leaders offer insight into the current climate and their predictions for what the future might hold.

Bill Mahoney, Senior Vice President, Sales and Account Managementbill mahoney portrait

As the supply chain landscape continues to shift amidst COVID-19, NFI continues to build upon our partnerships with customers during this time, acting as a consultative resource for them under these extraordinary circumstances. With virtual meetings replacing face-to-face interaction now and likely throughout the remainder of 2020, the key to success will be remaining flexible and innovative in addressing new challenges. Although the way we connect has changed, NFI’s relationships remain vital and we will continue to go above and beyond to provide value for our customers. While there are still many unanswered questions as to what the future holds post COVID-19, NFI will remain nimble in evolving and adapting to ensure customer success. While the world has changed forever, and ultimately so will NFI, we will continue to drive value for our customers through new and innovative forms of communications relying on our most important asset, our people, which is what has made us so successful over the past 88 years.

Dave Broering, President, Non-Asset

2020 is going to be a year full of challenges for the supply chain industry due to the fracturing of the global and domestic supply chain as we know it. The challenges that COVID-19 has brought to the well oiled machine that supply chains operated on have been broken and will not return to their former state for quite some time, if ever. As we work through the year, supply chain organizations are going to continue to work to repair these supply chains in order for companies to have reliable and affordable services that support their needs. Additionally, this reconstitution is going to be paramount to the ongoing viability of supply chain providers here and abroad.

Mike Greco, SVP, Global Logistics

Since the implementation of U.S. tariffs on China, COVID-19 has only further challenged global supply chains to look at multiple country sourcing and diversifying its reliance on traditional single source countries such as China. Risk mitigation and creating lean and agile supply chains will become even more important to keep a consistent flow of product in and out of the country. Trade wars and the ongoing pandemic have become the new reality which importers and exporters need to adjust to stay competitive and fluid during these turbulent times.

Mark McKendry, Regional Vice President, North American Intermodalportrait mark mckendry

COVID-19 has challenged the world in ways that seemed unimaginable just a short time ago. That challenge will be met in due time, but the aftermath remains the biggest unknown for global supply chains. Prior to the shelter in place orders, North America saw the “supply side” of the economy deeply affected by prolonged shutdowns in China; our next, and perhaps greatest, challenge is the “demand side.” The likelihood of consumer spending reaching pre-COVID-19 levels is very low, at least in the short term. Historical reference does show that a global crisis leads to tightened household expenditures and lower discretionary spending. What could mitigate some of that downside is the effort being made by both the Federal Government and the Federal Reserve to stimulate consumer activity. The most resilient supply chains are already set to weather this storm, but organizations that do not have scalable, flexible distribution partners, and an e-commerce platform will face sustained headwinds. However, even the most robust companies are now competing for a shrinking share of discretionary dollars so they need to either make “things” that people need, or find new ways to stand out in the crowd.

While the exact future of supply chain and the overall economy is difficult to predict, companies that are willing to adapt their supply chain in this ever-changing environment will remain resilient. As the industry continues to evolve amidst COVID-19, it’s important that shippers take a look at their 3PL partnerships to ensure they are flexible and agile in addressing logistical challenges in today’s climate.

Sources

  1. https://www.instituteforsupplymanagement.org/news/NewsRoomDetail.cfm?ItemNumber=31171&SSO=1