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OM in the News: Supplying and Shipping Take on New Importance

April 3, 2020

Companies like UPS are experiencing a boom in home deliveries

Just a few weeks ago, many people would have been hard-pressed to talk about the nation’s supply chain, writes The New York Times (April 1, 2020). But with shortages of protective gear for medical workers and basics like toilet paper and hand sanitizer, the inner workings of transporting goods from manufacturers to consumers, medical professionals and other businesses suddenly has taken on new importance.

“Shippers are facing huge challenges to ensure that they have the tools and have capacity,” said the CEO of an online trucking marketplace. “And the truckers had enormous pressure as well because they can’t work from home and are constantly on the road.”

Some manufacturing plants and warehouses are understaffed, so the truckers that went expecting a quick turnaround for loading could wait as much as 15 hours for their cargo. Pennsylvania briefly decided to close all of its rest stops in a move intended to protect travelers, but the closures also impeded long-haul shipping without roadside facilities, so some were later reopened. And there are driver shortages, compounded by the aging population of truck drivers, whom some deem to be more at risk to die from the virus than those who are younger.

Delivery companies like FedEx and UPS are experiencing a Christmas-like boom in home deliveries, while shipments to business, which have closed by the thousands on government orders, have deteriorated. One estimate shows that  business-to-business shipments could decline up to 25% for months. Delivering to homes is generally less profitable because drivers ferry fewer packages across many more stops.

Classroom discussion questions:

1. What are the challenges facing shippers?

2. How are each of the six shipping systems described in Ch.11 (in the section on Logistics Management) impacted by the current crisis?

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