The COVID-19 crisis threw off the global shipping and trading industry this year, causing many firms to switch gears and put action plans in place to help keep supply chains going.
But bracing and planning for the type of disruption the pandemic caused industry-wide has been a challenge, three panelists said Thursday during the N.C. Ports Cold Chain Summit webinar series.
The industry leaders joined N.C. Ports for a discussion about that disruption, sharing impacts on their line of business, and thoughts on how best to prepare for the current and future crises.
“COVID-19 has really caused many, if not all companies, to take a look at every aspect of their business from employee safety, work environments, operations and supply chain,” said Aaron Brott, N.C. Ports’ senior director of key clients and trade development.
“N.C. Ports was no different in our approach,” he added. “We used our continuity of operations plan that really provides a framework to restore essential functions in the event of an emergency that affects the operations.”
That plan encompasses three types of disruption at the port: the loss of access to a facility due to a natural disaster, such as a hurricane; loss of service due to the reduced workforce, such as a pandemic; and a loss of service, equipment and systems around its IT network.
The plan allowed N.C. Ports to continue service and operations, as well as keep employees safe, he said. It also enabled N.C. Ports to quickly and safely secure its refrigerated and perishable cargo, to meet industry needs without disruption.
The depth of the refrigerated cargo storage at the Port of Wilmington grew significantly this year due to the construction of the new $14 million refrigerated container yard on its grounds. N.C. Ports created an entirely new refrigerated container yard, which came online around the start of the pandemic, giving more options for its cold chain customers.
But many customers suffered impacts from the pandemic.
“This pandemic was a curveball and I think we’re still trying to learn what needs to happen,” said David Herring, vice president of TDM Farms Inc. and Hog Slat Inc. “There have been some innovative things done. Luckily, in North Carolina, our plants are starting to come back online …”
A backlog of livestock became a major issue for the hog farming industry, leaving many farmers out of options for harvesting. The industry, however, is starting to adapt as more options open up.
“And I think first and foremost, what all industries are learning, is that we’re going to have to have more flexibility and we’re going to have to create more flexibility in the chain,” Herring said. “I’m starting to see, and people are talking about, more cold storage built in this country. When I look at the cold [storage] yard that you all put there, that’s incredible. And I guarantee you it won’t be long before you will be doubling it.
“We just got to be able to create more flexibility and give us more opportunity to manage the cold chain and manage our farms and manage our manufacturing facilities. This pandemic has thrown all kinds of curveballs at us and created all kinds of challenges. And if this happened once, it'll probably happen again,” Herring said.
Alan Robb, president of the South Atlantic & Gulf Coast District International Longshoremen's Association, also expressed the need for more refrigeration capacity.
“We are steadily training personnel for that type of work, for refrigeration jobs and have the ability to mobilize folks from one port to another if necessary,” Robb said. “I think the key is just staying ahead of the curve … and certainly planning on the worst-case scenario, having a protocol for that, and understanding what we need to do in the event of a disruption."
There is also going to be a shift overall in the inventory of goods, such as fresh produce, proteins and consumables, which include toilet paper, to keep up the supply.
“Running out of those is not an option anymore as we move forward,” Brott said.
One of the biggest challenges for the agriculture exporter, and for the cold chain network overall, are the missed sailings, which left a lot of refrigerated container cargo sitting, said Mark Bartmann, senior director of seafreight drayage solutions in North America for Kuehne + Nagel.
Missed sailings by the ocean liner industry happened across ports in the U.S., including the Port of Wilmington.
"We can do better," Bartmann said.
Kuehne + Nagel has started a network chain for pharmaceuticals and other frozen cargo, which has helped the firm create better quality and security for its customers.
"It is so important that the correct setup is done with the right vendor, partners, steamship line, ... whatever you feel is important for your supply chain," Bartmann said. "I would never go with the cheapest rate; I would discuss a competitive rate with the people you feel you can work best together with you. And this on a longterm always works better for business."
"Be prepared, not surprised. Make an ... analysis when you have the time, not when you need it," he said.
Bartmann's firm has handled the influx of various cargo throughout the pandemic, but one preparation many in the industry are making now is for the COVID-19 vaccine distribution.
"It will take the very large capacity of the cold chain on airfreight when it is introduced," he said, adding that this will potentially drive up costs for all other airfreight cargo due to capacity constraints.
Dosages in the millions that are expected will take up space on airfreight.
The firm has set up a chain with 32 specific airports around the globe that have the required carrier capacity, capabilities, infrastructure, set expertise, service levels and quality support that aligns with known manufacturing locations and destinations. It has also planned to introduce a "hyper-care team" focused on the distribution of the vaccination that could be located either in Switzerland, Germany or the U.S., he said.
Bartmann said that he doubts, however, that there will be a massive influx of the vaccine's impact on the ocean carrier services due to the importance of fast distribution of a potential vaccine.
"I think as we as a community move forward throughout this pandemic, sharing best practices across multiple industries will only make us stronger. Because at the end of the day, not everybody has seen every sort of disruption that there could possibly be all at once,” Brott said. "And I think if we can take best practices from very specific industries or different industries and kind of share that as we move forward, that would be the best for us."
N.C. Ports is hosting two other webinar series as part of the summit event, one on Nov. 12 and another on Nov. 19. The next N.C. Ports Cold Chain Summit webinar series will host a panel discussion focusing on growth opportunities. Participants must register
for this Nov. 12 event.