Response to the COVID-19 Pandemic: Global Supply Chains
May 5, 2020
Center for Urban and Regional Studies
Charles Edwards
Part of the series “Viewpoints on Resilient and Equitable Responses to the Pandemic” from the Center for Urban and Regional Studies at The University of North Carolina at Chapel Hill.
The COVID-19 pandemic is causing people around the world to question how this virus will affect the many public and private systems that we all use. We hope this collection of viewpoints will elevate the visibility of creative state and local solutions to the underlying equity and resilience challenges that COVID-19 is highlighting and exacerbating. To do this we have asked experts at UNC to discuss effective and equitable responses to the pandemic on subjects ranging from low-wage hospitality work, retooling manufacturing processes, supply chain complications, housing, transportation, the environment, and food security, among others.
Charles Edwards a professor of the practice in city and regional planning at UNC-Chapel Hill. He is director of the NC Department of Transportation Logistics and Freight division. Edwards began his career as a truck driver, was on the senior management team of the North Carolina-based airline that started United Parcel Service Airlines, helped introduce an innovative container to the international airline industry, managed a commercial airport, led the development of the world’s largest air vehicle, managed the NCDOT rail division, and has been a senior advisor to public and private aviation and logistics projects in the United States, Europe, Africa, Southeast Asia and the United Arab Emirates. He will describe the supply chain and how it is working today.
Transcript – Viewpoints on Resilient & Equitable Responses to the Pandemic. Charles Edwards: Supply Chain
Supply chains around the world are under tremendous strain as the novel coronavirus spreads. Forecasts for 2020 have been tossed in the bin as managers and staff of manufacturers, transport companies, government agencies and consignees scramble to respond to ever-changing scenarios.
International shipping and airline schedules are in disarray. A growing percentage of the world’s container vessels are being laid up because of falling demand, while an estimated 70 to 80 percent of the world’s airline fleets rest at airports around the world. RDU International recently reported that passenger volumes are down over 90 percent from last year. Many of the canceled flights carried freight, while massive thousand-foot-long container vessels swing on their anchor chains and commercial aircraft sit idly on tarmacs. Feverish activity is taking place to move desperately needed personal protective equipment including masks, gowns, gloves, ventilators, critical reagents for pharmaceutical manufacturing and other products to the front lines of the battle.
Describing the wide array of impacts of COVID-19 on global supply chains would take hours. In this podcast, let me focus on North Carolina and explain how products move from a factory to our doors or hospitals.
TV reports are filled with scenes of ambulances rushing to hospitals and, unfortunately, hearses slowly departing. Those scenes are depressing. But, the scenes of trucks carrying needed supplies to hospitals, grocery stores, pharmacies, etc. never make the news.
These flows of important goods have not stopped, they can’t. You can see them on the roads, rail lines, at airports and ports across North Carolina. Ships, airplanes, tractor-trailers and delivery vans are carrying everything we need from manufacturing plants, farms and seafood docks to us.
So what has changed? How has COVID-19 affected the movement of goods and supply chains in North Carolina? The simple answer is a lot. The more complex response is, it depends. It depends on the commodity, the origin and destination of the goods, whether the goods are for industrial, commercial, retail use, to name but a few of the numerous factors and characteristics.
Shipments to non-essential businesses have stopped. Whether it is the local barbershop, nail salon, jewelry or clothing store, they are all closed. There are no deliveries to these and other shuttered businesses. While a stay at home order has stopped dining at restaurants, those that still provide take-out need food and other supplies, albeit at reduced levels. The essential businesses, hardware stores, home improvement centers, grocery stores, pharmacies, gas stations, auto repair shops, continue to depend on prompt, reliable deliveries to meet the on-going customer demand.
Then there are the hospitals and the other sectors of the health care industry. Making a mask, face shield, gown or gloves requires materials – textiles, plastics, etc. Test kits rely on reagents made in China and India. Products funnel into manufacturing plants, and in some cases private homes equipped with 3D printers or a sewing machine from around the world by ships, planes, trains and trucks. As those much-needed products come off the assembly line, trucks and planes transport them to their place of need.
The world’s manufacturing engine, China, has emerged from its forced slumber. Personal protective equipment, already in short supply throughout the United States and North Carolina, is beginning to flow from its manufacturing plants.
Charter flights, some using all-cargo freighters capable of carrying over 100 tons, as well as passenger planes where boxes are now strapped down instead of passengers in seats, are plying the world’s air routes to Europe, North America and other hotspots affected by the novel coronavirus. As each of these flights touch down, fleets of trucks are loaded and dispatched to hospitals, some of them in North Carolina.
So, let us follow a shipment of face masks that’s destined for UNC hospitals. Made in a factory outside of Shanghai, China, they are carried by a truck to Pudong International Airport. They are loaded on a flight to, say, New York’s Kennedy International Airport. Off-loaded from the plane, they are transferred to a tractor-trailer, which after negotiating the somewhat less busy I-95 from New York to a North Carolina distribution center there, the masks destined for UNC hospitals are transferred to a smaller truck for final delivery.
That same process is repeated, day after day. It functions in part because of globalization and the rise of e-commerce and other online services.
So how have we done well and what could we do better in the future?
We must applaud the fast action of the Federal Motor Carrier Safety Administration to relax hours of service limits to allow drivers to move loads of critically important goods to their destinations.
While economically disruptive shelter in place directives have limited the spread of the virus and allowed the medical supply chains to keep ahead of demand, the scale of the pandemic has uncovered a lack of alternative supplies of medical equipment and food and there is a coordinated process to find, acquire and move critically needed shipments that we did not realize was an issue.
The pandemic has shocked the world’s economic system. Its impact has reinforced the need for a worldwide coordinated effort. The future in a complex world will be volatile, will be filled with uncertain, will be subject to ambiguities. The development of programs and plans for future disruptions are in the hands of planners employing a structured approach supplemented by advanced analytical tools.