Business management

Logistics in the era of lockdown

At a time of unprecedented turmoil, the transport and logistics sector has met the challenges of Covid-19 with innovation, exchanging skills and services to keep vital goods moving.

  • The Chartered Institute of Logistics and Transport has established a database allowing businesses in the sector to offer up spare capacity to the NHS and food delivery companies
  • Around 1,500 individuals and organisations have already registered on the database
  • The Freight Transport Association is making the case for further industry support from the Treasury, with 81.6% of survey respondents reporting a general business downturn

The coronavirus pandemic has created a number of challenges for supply chains in the UK, with high demand in areas such as the provision of important supplies for the NHS and maintaining the flow of food to supermarkets.

At the same time, with non-food retailers being closed, along with the hospitality industry, parts of the logistics industry that previously supplied shops, hotels, restaurants and bars have found themselves suddenly idle, with available spare capacity.

Thankfully, the shockwave that hit the logistics and transport industry in March has been softened by a groundbreaking initiative by the Chartered Institute of Logistics and Transport (CILT), which has taken a leading role in helping to keep the country running in highly challenging circumstances.

The CILT, backed by other professional organisations including the Road Haulage Association, Freight Transport Association and Confederation of Passenger Transport, has established a database that allows companies with spare capacity to make themselves known to any organisation that needs help. This ‘brokering’ of transport and logistics is proving invaluable to the likes of the NHS and companies that are continuing to sell food to the public.

Addressing capacity imbalances

Professor Richard Wilding OBE, former chairman of the CILT and full professor and chair of supply chain strategy at the Cranfield School of Management, explains the thinking behind the initiative. “One of the challenges was there just wasn’t enough capacity in terms of lorries and warehousing space,” he says. “All the produce and everything was there, embedded in the supply chain. It was the same with regard to the NHS: it had pandemic reserves, such as PPE [personal protective equipment], but it was a matter of getting it out to the people who actually need it.

“What the institute recognised was that certain parts of the supply chains had a shortage of capacity, but there were other parts that had excess capacity. Because restaurants were closed, you have specialist vehicles that can move chilled, frozen and ambient product, plus hazardous product such as bleach.

“What the Chartered Institute of Logistics and Transport decided was that we needed to match supply and demand. By creating a database, organisations or individuals with spare capacity were able to actually put that on the database and others who might be short of that particular capacity were able to get in touch and say, ‘You’re saying you’ve got this. We really need that at the moment. Can you help us out?’”

The database requires companies wishing to be added to answer questions on geographical availability (for example, whether they have a national network of vehicles and/or warehouses, or if they are concentrated in a particular region of the UK), type of available capacity (drivers, vehicles, warehousing, etc) and the times of day/week when the capacity is available.

At time of writing, about 1,500 different individuals and organisations have registered on the database.

Industry-wide support

The Confederation of Passenger Transport (CPT), among those industry bodies supporting the CILT initiative, has been able to offer the support of drivers, as operations director Keith McNally explains: “Demand really fell off a cliff in the coach sector and was substantially reduced in the bus sector. Effectively, our sector had surplus drivers, so we thought it might be an interesting way for our members to identify staff they might not want to furlough and make them available to the logistics sector. In some cases, drivers in our sector will have a category C licence for trucks, from the past. And many drivers will have a van licence as well.

“We spoke to the CILT and they progressed it. We highlighted their database to our members and facilitated the link, so that if our members thought it was an option worth considering, they could post details of drivers who they could make available and might have suitable licences.”

What the institute recognised was that certain parts of the supply chains had a shortage of capacity, but there were other parts that had excess capacity. We needed to match supply and demand

Richard Wilding OBE
Professor of supply chain strategy, Cranfield School of Management

Leading figures in the sector seem confident that the logistics industry is meeting the challenges of the current situation head-on and can adapt sufficiently to keep the country moving in these difficult times.

Elizabeth de Jong, director of policy at the Freight Transport Association (FTA), says: “The supply chain is capable of handling the challenges posed by the Covid-19 pandemic. Logistics is one of the UK’s most flexible and adaptable industries and is used to reacting to extreme disruption caused by environmental factors, fuel shortages and employment strikes. However, the integrity of the supply chain can only be maintained with the support of government, and some elements of flexibility among businesses and consumers, to keep goods flowing.”

Further challenges to overcome

She adds that the FTA was in constant contact with government departments and agencies to ensure the concerns of its members were listened to and acted upon, citing a postponement of the introduction of Clean Air Zones until 2021 and classifying logistics staff as key workers. However, there are still issues to overcome.

“The FTA’s Coronavirus Logistics Impact Survey shows 81.6% of respondents have experienced a general business downturn and there is a consistent lack of understanding about government support and how proposed measures will work,” De Jong says. “The FTA is working with the DfT [Department for Transport] to outline the case for the logistics industry to receive further support from the Treasury. As such, we are calling for the government to create a sympathetic repayment plan for the Coronavirus Business Interruption Loan Scheme (CBILS), dependent on profits having returned first. We also want them to enable businesses to restructure/defer loan repayments with banks and create a supply chain continuation fund to provide specific help for particular geographies and sectors, including key infrastructure points.”

The current situation has undoubtedly presented British industry with unprecedented issues to overcome, but the logistics and transport sectors have demonstrated not only flexibility, responsiveness and ingenuity, but also the strength of professional organisations in representing their members and liaising with government.

There’s probably a long way to go before we’re out of the woods, and there will be further challenges along the way, but the sector gives cause for hope.

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