The spread of the COVID-19 global pandemic has affected hundreds of thousands of people worldwide, with major economic effects expected to be felt for the coming months. As such, many commercial trucking companies are expecting to see fluctuations in their commercial truck insurance quote.
As the Organization for Economic Co-operation and Development (OECD) has cautioned that the Coronavirus health pandemic could cut global economic growth by half, many industries all over the world are facing fallout, and the effect on supply chains is twofold.
In this article, we will take a look at the importance of trucking contingency planning during pandemic and how you can build one as part of your fleet and commercial trucking company moving forward. Continue reading below to learn more.
If your commercial trucking company has been affected by the Coronavirus pandemic and are looking to make changes to your semi-truck insurance, contact SoCal Truck Insurance today to learn more about how we can help your organization and operations.
What is the Bullwhip Effect?
In our closely connected world, events taking place in one location can often have a ripple impact that is felt thousands of miles away, regardless of the industry. Nowhere is this truer than with supply chain logistics, which consists of a multinational, interdependent network of producers, manufacturers, suppliers, distributors, wholesalers, and retailers.
The ‘bullwhip effect’ is a phenomenon that occurs when businesses dramatically add or subtract inventory, and even a small rise in demand can lead to a significant gap in the need for parts and products further down the supply chain.
This can emerge for many reasons, from market fluctuations induced by special discounts to a lack of contact between the various links in the supply chain.
As we’ve seen this year, natural disasters and global pandemics can also contribute to such a phenomenon. In the case of the COVID-19 outbreak, panic purchasing and storage of essentials such as food, paper goods, and sanitary products has dramatically distorted demand trends, making it nearly impossible for manufacturers to produce reliable industry forecasts.
Think of this phenomenon as a set of dominoes. Without contingency planning in place, the entire supply chain can potentially fail.
Pivoting Your Supply Chain Strategy
If your commercial trucking organization or operations is experiencing the impact of COVID-19, use this article as a learning opportunity to adjust your current supply chain accordingly.
Here are a few ways and resources to help your organization start adjusting your strategy today.
Diversify Your Company’s Supply Chain
Most of the damage caused by the Coronavirus outbreak is a direct consequence of businesses depending on a single supplier. As many of these suppliers have seen significant labor shortages and, in some instances, complete closure due to the Coronavirus, this has left some companies unable to meet demand.
Although working with new or previously unused suppliers and drivers can be challenging for any commercial trucking organization, it is often the preferred choice instead of losing your sole supplier.
Try to look for partners with transport providers to provide real-time site monitoring and alerts and additional access and connectivity to various supply chain partner activities. This can provide you with insight into your supply chain’s inner workings and will go a long way toward delivering excellent customer service and improving overall customer retention.
Create a Flexible Multi-Channel Distribution Strategy
As previously mentioned, one of the biggest lessons that commercial trucking companies have learned from this global health crisis is that relying on a single supplier or truck driver to deliver goods and services to their customers is an unsustainable approach.
The secret, however, is to synchronize inventory through a multi-channel approach.
With a coordinated, multi-channel distribution strategy, your organization, employees, workers, and truck drivers can ensure fulfillment across all sales channels, giving your company an edge and improved response to evolving market trends as they arise.
How to Build Logistics Contingency Plans for the Future
While it may be difficult to draw up supply chain contingency plans for the COVID-19 crisis right now, there is never a bad time to start preparing for the future.
Here are some of the best practices and resources to help you build a logistics contingency plan that will lead your commercial trucking company through any incident that could potentially interrupt your supply chain.
Look at Similar Models
In the aftermath of the COVID-19 crisis, businesses have struggled to meet the growing demand for critical products. Consider what other devices, technologies, or legacy supply chain services other companies are using as a fallback option, and which of them fulfill your temporary needs, if not ultimately fulfill a primary source of products and supply of components.
Diversify Your Carrier Logistics Providers
Having several options at your foreign and domestic carrier base is always a good step to consider, as this allows your organization to overcome variations that occur from unusual circumstances. A diversified mix of motor carriers, truck drivers, employees, and workers will allow your organization to function adequately and keep your freight moving.
While there’s no way for you to prepare for any imaginable scenario that could happen, a logistics contingency plan is built to be a continuous process to adapt to changes over time. Plan what you can, stay as informed as possible about things that could alter your business plan, and be flexible in your process so that you can plan accordingly.
Focus on Supply Chain Visibility
Lack of visibility can cause any organization to turn a blind eye to weak spots in its supply chain, which can create several kinds of vulnerabilities. Supply chain visibility is a valuable resource for mapping and tracking your business’ global supply chain so that you are more aware of a potential supply chain disruption before it happens, allowing you to alter your strategy as necessary.
SoCal Truck Insurance is Here for You
The COVID-19 health pandemic has taken a significant toll on businesses in all sectors, and commercial trucking companies and supply chain firms are no exception.
While you may have been able to continue running your organization depending on where you are located, the coronavirus global pandemic has certainly made things more difficult.
We understand that the current COVID-19 health crisis has given rise to a great deal of instability in the commercial trucking industry, the transportation industry, and the global supply chain as a whole. That is why SoCal Truck Insurance wants to help.
We recognize that each trucking industry is special and may need specialized insurance to ensure that their company is protected, which is why we provide affordable truck insurance plans for almost any form of commercial truck business.
If you’re looking for a commercial truck insurance company that you can be confident will always be there for you, contact SoCal Truck Insurance today or visit our website for a free commercial truck insurance quote and learn more about how we can help your business.