GCCA Releases COVID-19 Business Impact Report
The Global Cold Chain Alliance (GCCA) recently released their 28-page 2020 COVID-19 Cold Chain Business Impact Survey Summary. It’s the only research and report of its kind taking a look at the business effects of coronavirus for warehouses, industry suppliers, transporters, and construction companies involved in the cold supply chain. The GCCA’s objective was to determine the most potent ripple effects that COVID-19 is having on the social and economic activity of the cold chain industry across the globe.
The GCCA and its survey focus solely on the cold chain industry, referring to temperature-controlled logistics. This is an interesting area to study, since temperature-controlled transport is one of the most essential aspects of keeping the global food chain functioning. The cold chain has become even more critical than ever to ensure that customers can get food during the pandemic, even with severe restrictions on transport and purchasing. Taking a look at the impacts on the cold chain can tell us a lot about how COVID-19 has impacted supply chain businesses on the whole, as well as the implications in the on-demand food market.
The GCCA survey asked businesses 12 questions with 170 usable responses. They surveyed organizations in 31 countries across North America, South America, Latin America, and Europe. The majority of respondents were warehouses, but the survey included other cold chain partners and industry players as well.
The survey focused on three primary areas of impact: 1) the top challenges facing business; 2) the most critical responses to the virus (for both companies and the government); and 3) their current and projected revenue due to the coronavirus.
Note: Get more COVID-19 updates in the transport industry here.
Top challenges facing cold chain business
Over half (51%) of respondents said the top challenge with the COVID-19 pandemic is supply chain disruptions. This includes having to keep up with changes in demand, slowdowns and adjustments in the foodservice, production and manufacturing challenges, upstream failures, etc. When one partner can’t keep up with the challenges, it can impact the entire chain. That’s why it’s absolutely critical to maintain a high level of transparency and communication between supply chain partners, especially during such uncertain and frenzied times.
The following top challenges relate primarily to caring for employees and creating a safe work environment. 30% of respondents said they’ve struggled getting access to personal protective equipment (PPE) and cleaning supplies, which impacts their ability to maintain a healthy and safe environment for their workforce.
Other challenges facing the cold chain as a result of the pandemic (and the percentage of respondents who rated it as a top challenge):
- Government restrictions (27%)
- Employees following safety protocols (26%)
- Not enough capacity (24%)
- Managing fear of contracting COVID-19 (23%)
- Workforce shortages (20%)
- Closure of non-essential businesses (15%)
- Extra capacity (13%)
- Effectively screening employees (10%)
Responses to the COVID-19 virus
There are a lot of ways to handle business in response to major disruptions and upsets. For most companies, they’ve made the smart decision to focus on creating a safe workplace for their people while working to maintain business continuity during the COVID-19 pandemic.
The strong majority (90%) of respondents said their primary reaction has been to take additional measures to protect their workforce. This includes health measures like staggering shifts, social distancing, and offering more remote working opportunities. We anticipate that organizations that effectively prioritize employee safety will thrive, as workers will feel cared for and thus more motivated. On the flip side, those companies that don’t focus on taking steps for their employees right now will quickly start to see a demotivated workforce, low productivity, loss of clients, and reduced revenue.
Other responses that cold chain businesses have prioritized:
- Maintaining business continuity (67%)
- Workforce morale and motivation (49%)
- Industry awareness/social responsibility (20%)
- Communication and accessibility (20%)
- Employee health resources (17%)
- Customer/supplier outreach (16%)
- Maintaining government approval to operate (8%)
We hope that these responses are creating an enhanced level of transparency among the supply chain—both between partners as well as between the workforce and management.
The survey doesn’t mention anything about automation in the warehouse, but we’ve found this to be especially on the uptick since the pandemic. Decontamination robots are keeping warehouses clean and sanitized while picking/packing robots are able to fill in workforce gaps and enable social distancing. Automation improves employee productivity, especially when safety and morale among the workforce have to be prioritized.
Revenue impacts of COVID-19
Naturally, businesses have major concerns about how COVID-19 is impacting both workers and the bottom line. Over half (54%) of respondents reported a decrease of revenue in the months of the COVID-19 lockdown, while 35% reported an increase (11% report no changes). These companies predict that they will see the same sort of trajectory for their revenue over the next six months, based on demand and business response.
Interestingly, 80% of respondents also indicated that their costs to do business have increased. That means, unfortunately, for more than half of businesses, they’re seeing less revenue and greater expenses. This is likely putting a severe strain on the bottom line that could have significant ramifications for the year (maybe even years) to come.
Still, there’s hope. Three-quarters of respondents believe the pandemic will create more e-commerce and direct-to-consumer delivery of temperature-controlled goods, especially frozen food products. Moreover, the responses required to handle the pandemic are likely going to create lasting and impactful changes on how cold chain partners work together, motivate their employees, prioritize safety, and utilize automation to advance business.
COVID-19 is taking a toll on the transportation industry, but GCCA’s survey provides a ray of optimism for the future of the cold chain and the transportation industry in general.
You can read the GCCA report here: 2020 COVID-19 Cold Chain Business Impact Survey Summary
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