Industries Adjust to Deliver Food During Pandemic
The food industry, in addition to President Donald Trump and others, has stressed that food supplies are adequate during the coronavirus (COVID-19) pandemic. But getting those supplies where they need to be has proven to be a challenge as buying patterns shift and “panic” buying creates temporary shortages of certain grocery staples.
While all modes of transportation have been affected, trucking is the most critical for the “last mile” — getting products to the final retail destination. Both the government and private businesses have stepped up to help ease the logistics challenge.
National Food Emergency Declared
The US Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) for the first time ever declared a national emergency to provide hours-of-service regulatory relief to commercial vehicle drivers moving “emergency relief” in response to COVID-19. While the declaration primarily covered medical supplies and equipment and medical personnel, it also included “food for emergency restocking of stores.” The Department of Homeland Security on March 23 clarified that in addition to truck drivers, essential workers included those supporting the transport of emergency goods (including food) such as dispatchers, mechanics, truck stop and rest area workers and “employees of firms providing services that enable logistics operations, including cooling, storing, packaging and distributing products for wholesale or retail sale or use.”
Cross-border truck traffic was deemed essential, exempting trucks from temporary partial border closings between the United States, Canada, and Mexico. Further actions by the FMCSA and other state and federal government agencies related to trucking have included temporary waivers for commercial vehicle drivers to renew expired licenses and medical certificates, relaxed truck weight and dimensional restrictions and ensuring truck stops with adequate parking are open and available along with the interstate highway system, among others.
It has been generally accepted that bare shelves in grocery stores are demand-driven and not a supply issue.
“Recent empty shelves are a result of ‘pantry stocking and preparedness’ and it is advisable to prepare for a week of food supplies, versus a month,” said Robb MacKie, president and chief executive officer of the American Bakers Association. “Despite the surge and because of the strength of the United States’ food system, the supply chain remains solid and transportation is moving food to consumers as quickly and safely as possible.”
In a March 18 blog post, Chris Spear, president, and CEO of the American Trucking Associations (ATA) wrote, “There is plenty of food, water, medicine, fuel and, yes, toilet paper, in our supply chain. The empty shelves temporarily seen are simply the result of surge demand as Americans rush to stock up. They’ve been quickly restocked as carriers and retailers adjust to the whims of the market.”
The ATA has adopted the motto “Keep Calm and Keep on Trucking” during the pandemic and has been actively working with state and national governments and law enforcement on its immediate priority of “maintaining the flow of interstate commerce and ensuring the continued movement of goods” through the trucking industry.
To be sure, local and state travel restrictions have not included consumer visits to grocery stores. Even though much of America (and other countries) is working from home and restricting movement beyond the home, people still have to eat and are able to travel to get their food or have it delivered from restaurants and grocery stores.
But that doesn’t mean there haven’t been challenges, both locally and globally. A key to keeping grocery shelves stocked has been boosting production and/or delivery to grocers of pandemic-hoarded items such as flour, pasta, eggs, milk, and other items. While some grocery shelves have gone bare, food destined for restaurants, bars, schools, and other institutions is backing up because of closings. Shifting food from institutions to groceries isn’t easy due to packaging, logistics routes and other challenges.
As an example of cooperation between grocery and foodservice, C&S Wholesale Grocers, Inc., the largest wholesale grocery supply company in the United States, and US Foods Holding Corp., a leading foodservice distributor, said March 24 they had teamed up “to combat job and food insecurities amid the coronavirus pandemic’s impact on the supply chain.”
“We are taking the steps necessary to onboard and train members of US Foods’ workforce to ensure our warehouses are staffed and deliveries are on the road, enabling families access to food across the country,” said Mike Duffy, CEO of C&S.
The partnership will allow C&S to alleviate potential worker shortages from increased retail food demands while transferring US Foods personnel to similar job functions where demand was lacking in the foodservice industry.
“This partnership is an excellent example of the ways in which we are leveraging our distribution capabilities in new ways to support our nation’s retailers,” said Pietro Satriano, chairman and CEO of US Foods.
That is just one example among many where food companies and distributors are hiring, redirecting or joining with other companies to adjust to changing needs caused by the pandemic.
On a broader scope, shipping container availability is a significant concern, mainly because of reduced trade between China and the United States, and with the rest of the world.
The availability of cargo containers at the US ports in Long Beach and Los Angeles and the European ports of Hamburg, Rotterdam, and Antwerp was the lowest on record, according to a Bloomberg report. The two US ports typically have 35% of the containers coming into the United States, the report said, but imports to both fell about 13% in January and February. Meanwhile, outbound container shipments from Shanghai in February dropped 25% from a year earlier.
“West Coast port volume has plummeted as production in China was hit first by COVID-19,” the ATA said on its COVID-19 Update Hub. “With that cut in overseas production, sailing to and from China fell significantly.”
It’s fully expected that as consumers adjust to staying home for the duration of the pandemic, and as restrictions begin to be lifted, there may be a negative impact on grocery demand as people work through their well-stocked pantries and freezers. Anecdotal reports already indicate a slowdown in buying and better-stocked shelves in states that were the first to implement restrictions, while the situation continues to escalate in other areas that imposed restrictions more recently. The same would be expected for international shipping, largely as conditions relax in China.
Source: Food Business News