How to deal with COVID-19
With the global spread of COVID-19 (the coronavirus disease) the Center for Industrial Research and Service (CIRAS) at Iowa State University is providing educational guides and direct support for our clients to help them plan, prepare, protect, and recover their operations.
Here are a few resources if you’re concerned about the impact of COVID-19:
If your business is impacted by COVID-19, CIRAS can provide no-cost assistance to help you understand your next steps. CIRAS has an emergency response team in place to help guide you through the recovery process. Send an email to firstname.lastname@example.org and we’ll be in touch within 24 hours.
Current Updates (March 31, 2020)
Iowa passed 400 COVID-19 cases on Thursday, as the governor issued a call for Iowans to follow state guidelines and make masks that can be donated to health professionals. CIRAS continues working with Iowa Homeland Security and Emergency Management to help the agency find sources for 500,000 medical gowns, 500,000 sewn cotton face masks, and 500,000 plastic face shields. Meanwhile, the U.S. government announced that it is extending social distancing guidelines through the end of April.
Other items affecting industry include:
- Ceva Logistics and DHL Global Forwarding have invoked the force majeure clause in their logistics contracts due to the COVID-19 pandemic.
- UPS, FedEx, and Amazon have temporarily suspended some of their service guarantees and premium service transit-times due to COVID-19.
- Production in China has resumed (on average) to 70 to 80 percent of normal capacity, though the Wuhan area remains on lock-down until early April.
- Truckload rates to areas hit hard by COVID-19 are increasing due to a lack of back-haul freight. There are also traffic in-balances in higher shipment volumes for food and related products to grocery stores and significantly reduced volumes to other retail destinations, leading to variability in freight rates.
- The Federal Motor Carrier Safety Administration (FMCSA) has expanded its list of goods included in the agency’s emergency hours-of-service (HOS) waiver. Fertilizer, food packaging, and animal feed are now included, as well as raw materials used to manufacture bleach, disinfectants, hand sanitizers and similar items. These are in addition to the original list of medical equipment and supplies, PPE, food and related raw materials.
- Ford, GM, and Toyota have begun to shift a portion of their production capacity and resources to assist medical equipment and PPE manufacturers to increase production capacity.
- Several manufacturers in Iowa have temporarily shut down their operations for a few weeks to protect their workforce from COVID-19 – including Bridgestone, Flexsteel, and Winnebago Industries. Other manufacturers have suspended operations for a few days to conduct environmental cleaning. This includes John Deere in Dubuque and Whirlpool in Amana.
Previous Updates (March 25, 2020)
President Trump has signed a declaration declaring Iowa a disaster area, state officials announced today. The decision removes a federal spending cap and opens the door for a Community Disaster Loan Program. As of this posting, a total of 145 Iowans now have tested positive for COVID-19, with one fatality.
The more specific impacts to Iowa industry include:
- Northern European and US West Coast ports have fewer empty containers available to shippers than they traditionally have, but no outright shortages are currently being reported.
- Many passenger airlines are making available a portion of their passenger fleets for cargo charters due to high demand and higher air freight prices in the market.
Previous Updates (March 20, 2020)
California residents on March 19 were ordered to stay home except for “essential” travel. New York followed this morning by closing all “nonessential” businesses and ordering most state workers to stay home. Federal authorities have pushed the deadline for filing taxes back to July 15. Meanwhile, Iowa Gov. Kim Reynolds today signed another Emergency Health Declaration that, among other things, temporarily halts the collection of interest and fees on back property taxes, allows governments to hold public meetings electronically, and suspends evictions.
Some of the more direct impacts to Iowa industry include:
- The U.S. has reached mutual agreements with the Mexican and Canadian governments to implement restrictions on people traveling across the border, however this does not limit freight movements.
- Amazon is limiting new receipts of some goods from their third-party resellers to free up space in their network for high-demand goods.
- The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has issued a national emergency declaration to provide hours-of-service (HOS) regulatory relief to commercial vehicle drivers transporting emergency relief in response to the nationwide coronavirus (COVID-19) outbreak. This has been expanded to include certain raw materials such as paper, plastic and alcohol. See: https://www.fmcsa.dot.gov/emergency/expanded-emergency-declaration-under-49-cfr-ss-39023-no-2020-002
Previous Updates (March 18, 2020)
Iowa restaurants and bars now are closed for everything but take-out and/or delivery business under an order signed March 17 by Iowa Gov. Kim Reynolds. The declaration of a “State of Public Health Emergency” also orders the closure of adult day care centers and public venues such as movie theaters, gyms, and casinos. Gatherings of more than 10 people are prohibited. The announcement followed a previous recommendation from the governor that Iowa schools close for classes though at least April 13.
Meanwhile, COVID-19’s impacts on Iowa manufacturers continue to ripple:
- The school closings in Iowa may create some workforce issues with companies as parents may need to stay home to care for their children (or elderly). Companies should consider alternative working arrangements as feasible to maintain their employees.
- There are reports of higher levels of competition for domestic shipping as the U.S. food and grocery supply chains struggle to keep up with the spikes in consumer demand and this competition may affect shipping availability for shippers overall.
- Air freight rates have increased more than 25% from China to the USA due to production picking back up out of China and reduced air freight capacity in the market.
- The drastic reduction of passenger flights from Europe to North America will also impact the availability of air freight from Europe as the majority of air freight from Europe moves in the bellies of passenger aircraft. Several airlines are looking to add charter freight capacity to this market, however shippers should expect to see higher freight rates.
- Reports from China indicate that manufacturing levels are ramping up and shipping bottlenecks are being worked through. Shippers should remain in close contact with their supply chain partners to understand these impacts.