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How logistics firms are pivoting during COVID-19

April 8, 2020

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As the COVID-19 pandemic slows business functions throughout the world, Richmond-area companies are pivoting their operations to create new opportunities. Businesses that will survive the coronavirus pandemic are those that adapt to the challenges and continue to serve existing and new customers.

Port prioritizes coronavirus-fighting cargo

Down the James River from the Richmond Marine Terminal, the Port of Virginia in Norfolk announced recently it had established a new “critical cargo initiative” for coronavirus-related shipments. The Port said coronavirus cargo would receive priority treatment and would be processed to leave the terminal as quickly as possible. Just recently, it got a shipment of test kits on the road in less than two hours.

The Richmond Marine Terminal.

“This cargo is vital and getting it to the people that need it the most as quickly and efficiently as possible is a priority for The Port of Virginia team,” said John Reinhart, CEO and executive director of the Virginia Port Authority. “We want to help and we’ll continue to look for more ways to do so.”

Port personnel will be pre-positioning COVID-19 critical import containers for easier pick-up and would be working closely with motor carriers to confirm truck reservations to move those shipments.

The Richmond Marine Terminal’s business increased more than 28 percent in March. Volume at the Terminal has been steady with a total of four barges running shipments between Richmond and the East Coast’s most technologically-advanced port in Norfolk.

Rerouting the food supply

Richmond area headquartered Performance Food Group, a Fortune 500 company that services 200,000 restaurants with its supplies, continues to support its customer base by launching tools to assist the independent channel, advertise which restaurants are open and help with a transition to higher volume in take-out and delivery.

“In addition to working with our existing customers, we have formed several new partnerships, brought in new business and shared many of our associates with organizations that are experiencing labor shortages,” said George Holm, PFG Chairman, President & CEO.

Utilizing its nationwide network of over 100 distribution centers, the company signed agreements with 10 new grocery retail partners and sharing over 1,000 associates to help keep shelves stocked with food. This includes distributing groceries to approximately 480 new grocery locations as PFG builds out its distribution capabilities to this channel.

PFG also entered into new partnerships to support online ordering for its customers through OpenMenu, Swipeby and several other third-party delivery operators.

“As we all adapt to the COVID-19 pandemic, our company is in a crucial position to keep our country’s food supply chain strong,” said Holm.

Banding together during this time of need

The Virginia Supply Chain Initiative, a centralized supply chain clearinghouse for businesses and local governments responding to the COVID-19 crisis, is providing a one-stop resource for organizations needing to supplement or enhance supply chains.

Orbit Logistics in Hanover, Va.

“Some of the feedback we were getting on the street was there was a need [to get together] a few people to get a project done, but they didn’t know where to start,” Orbit Logistics President and VSCI co-founder Travers Clemons said in a recent Virginia Business article. “What we’re trying to do is do all that legwork in advance, so when there’s a need, that it can come directly to us.”

VSCI creates a network of supply chain providers from warehousing, distribution, contract packaging, kitting and assembly, customized fulfillment, same-day delivery, inventory, order management, print management and material management. Supply chain partners include Orbit Logistics, Productiv, MobileOne Courier & Logistics, Riverside Logistics, Custom Healthcare Systems Inc., Richmond Corrugated Box Co., Fulfilltopia, JLL and Warehowz.

A centralized supply chain resource for business and local government responding to the COVID-19 Pandemic, VSCI is already supporting an effort to feed school children in Louisiana to replicate the student meal services while the schools are closed due to COVID-19. Productiv is working with local leaders in Louisiana to understand the need, while Richmond Corrugated Box Co. supplies the meal boxes and Riverside Logistics transports the pallets of meals to Louisiana drop points.

Flexible Warehousing

Some supply chain experts emphasize flexibility in warehousing during the pandemic.

“Inserting a flexible solution to storage space and transportation into the supply chain can help alleviate some of the pain points related to all this uncertainty,” says Darrell Jervey, CEO of Richmond-based startup Warehowz.

“Thankfully, our partnership with Warehowz gives our customers a solution in this unprecedented time of need,” says Pat Martin, Corporate Vice President of Sales for Estes Express Lines. The company, headquartered in Richmond, is the largest privately-owned trucking company in the U.S. “Our customers have already begun looking for short-term warehousing and this will only accelerate in the coming weeks and months as the flow of goods into the United States rises quickly.”

In addition to the peace of mind it can bring to customers, short-term warehousing may also soften the blow of increasing fees from demurrage, labor and other emergency costs. According to an article in Ocean Insights, “…average demurrage fees can range from $75 to $150 per container per day… [the fees] can rise to as high as several hundred per day the longer the container remains in a terminal.”

“Through our expansive transportation network and ability to quickly make delivery modifications to ensure adherence to the latest federal, state, and local requirements we are able to help our shippers despite rapidly changing scenarios,” explained Scott Fisher, CEO and President of Estes Forwarding Worldwide.

Companies are keeping the rubber on the road

Logistics is the lifeblood of the American economy and this public health crisis has helped emphasize the need for diversifying distribution points and keeping trucks on the road. Consumers continue to depend on have access to vital necessities thanks to creative supply chain solutions.

If your company has a great story to share about pivoting your business during the pandemic, we would enjoy hearing from you. Please contact Michael Ivey at mivey (at) grpva.com.