The worldwide Covid-19 catastrophe has revealed weaknesses in both the domestic and international supply chains that must be address, Robert M. Tobiassen, president, National Association of Beverage Importers, will tell the international Trade Commission this morning.
There have been “multiple disruptive impacts of the COVID-19 crisis around the world on the global supply chain as well as within the United States on the import and distribution supply chains,” he added. Those disruptions occurred, Tobiassen said, without regard to whether the goods were medical supplies to deal with the Covid-19 pandemic or bottles of distilled spirits, beer, wine, cider and mead.
Solve one problem, and you solve both problems, Tobiassen is poised to say.
The problems begin with the government-mandated shut-down of a supplieer or its transportation supplier, which triggers a “domino effect” on all subsequent points inthe supply chain. The problems include a shortage of shipping containers, slower loading and unloading of cargo containers in a port, thanks to social distancing and Covid safety rules.
One delay leads to another delay, which leads to crewmembers and sailor shortages and exhaustion. Some 300,000 crewmembers and sailors are impeded from returning home at the end of their sailing contracts thanks to travel restrictions.
In the U.S., a shortage of commercial driver license holders along with Covid-19 restructions of availability in the truck industry has resulted in a debate on whether to temporarily increase truck sizes and weight limitations, Tobiassen will tell the Trade Commission.
Another problem affecting the truck industry is the closure by several states of highway rest stops, not only to passenger vehicles but also to truckers. Some states won’t even allow trucks to use the highway rest stop parking lots.
“A shutdown or restrictions at any one of these points has a domino effect on all subsequent steps in the planned operational flow of the supply chain,” said Tobiassen. Solutions must address this inter-dependence for the future and rely on cooperation between countries, industries, and other stake holders and establish multiple sources of products.
“Finally, context counts” he added, “these disruptions are only exacerbated by the ‘trade wars’ with China and the European Union, among others, as the resulting unpredictable reduced trade levels impact the volume of sailings with cargo containers and port arrival forecasts.”