Successful Domestic Deliveries During COVID-19

As the nation shelters in place and many businesses remain closed, Amazon, UPS, FEDEX and other delivery vans zip up and down the streets of American cities. Although domestic demand has been disrupted by the virus, trucks are still moving cargo on our highways. As we reported on Monday, manufacturing operations in China have largely resumed.  Goods from Europe and South/Central America, organized early in the new year, are now arriving at U.S. shores.  Lastly, while the borders between the U.S./Canada and U.S./Mexico are closed to non-essential traffic, the continental transport of goods is in full swing.  

Shippers and their trucking companies are adapting to unprecedented challenges:  rest stop closures, port closures, scaled back or shuttered factory and warehouse operations and overflowing airline warehouses. 

“Transportation within the U.S. is based upon a careful balance of interdependent yet often individually owned entities.  At any point, a disruption in the cooperation or communication between these companies may have stressful and expensive consequences” reports Larry Niehaus, Regional VP Sales – International, Infinity Global Xpress. As the domestic landscape continues to change amidst a patchwork of State regulated closures and quarantines, all components of the manufacturing and transportation industries have been disrupted. 

Some of the transportation challenges facing stakeholders include:

1.     Sanitation Concerns: Consignees demanding information about where trucks have been prior to delivering to their facilities.  Questions include asking if the truck has been to any of the heavily affected COVID-19 cities such as New York, Chicago or LA.  Niehaus remarked, “While the Electronic Log system can provide that information, are carriers obligated to provide such details?”  

2.     Pricing: Rates quoted with 30-day expirations are being voided and replaced with significantly shorter windows, some priced with 5 or 7-day expirations.

3.     Availability of cargo:  If the carrier is unable to secure a return load from a destination, the carrier may cancel completely or charge a round-trip rate for a one-way delivery.

4.     Warehouse closures:  When a carrier is unable deliver due to an unannounced or unknown warehouse closure, extra expenses can include container detention, waiting time or the cost of rerouting the goods. Some international freight forwarders and carriers report having been forced to find additional warehouse space due to closures on the part of consignees or the impact of air charters. 

5.     Payment Delays.  When the shipper’s payment terms are FOB Buyer, payment for the goods will be delayed as long as the receiver’s facility is closed. In addition, the shipper continues to hold the risk of loss and incurs the extra cost of storing the goods.

According to Michael Lyman, Logistics Expert for M&L Company, excellent coordination and follow-up is the best defense against unanticipated delays and expenses.    Even if your business in not affected by a State mandated closure, remember that your customer’s situation may be different. Verify with consignees the open status of warehouses, the hours of service and any special requirements put in place due to COVID-19. Check with transportation providers to discuss their operational status, current delivery plans and operating hours. Teamwork and thorough preparation will help your company adapt to today’s circumstances.