LM Group News Editor Jeff Berman recently spoke with Karen Tyndall, Director of Customer Solutions at GlobalTranz, about myriad aspects of COVID-19 vaccine distribution, including: the impact on truckload capacity, vertical market disruption, and the cold chain, among other topics. Their conversation follows below.
LM: Looking at the truckload capacity-related aspects of COVID-19 vaccine distribution, what are the key aspects of that, as it relates to what it means for the market, from a GlobalTranz perspective, in terms of how you work with your customers?
Karen Tyndall: I see that every time there is a significant disruption to an environment, whether it is due to a hurricane or some kind of natural disaster, or, in this case, a pandemic, that truckload capacity always takes a hit in some regard. It always does for something this big that is driving and forcing a shift in resources. So whether it is from dry van capacity that is potentially leveraged to accommodate direct kind of “hot shot” moves from one market to another, to move the vaccine in a very short timeframe that is contained in some sort of packaging that allows the packaging to be self-contained to maintain the necessary temperatures…they are not necessarily reliant on tractor-trailer to supplement that temperature. There could be a [lessening] dry van capacity.
LM: What about on the refrigerated (reefer) side.
Tyndall: For reefer, when you have something this big, as a vaccine effort on a national level, it is bound to pull from refrigerated trailer capacity. It is inevitable. Anyone who says otherwise, I feel is being naïve. As of March or April, depending on how the weather shakes out, those months could be very big times for areas like Florida and California that are historically big produce markets, and the other interesting part is both states are big hot spots for this virus. In past years, companies will typically take loads into those markets around produce season for bottom-dollar rates, knowing they are getting top-dollar rates going out. How is it going to shift that balance? I think it will be really interesting to watch, because now people are going to be buying that inbound capacity, as well as outbound capacity and that is potentially going to alter the very delicate balance that is historically produce season in general.
LM: So, looking at reefer, as it relates to the vaccine distribution, does it stand to reason that there is more product than capacity?
Tyndall: Absolutely. I feel that within every conversation in some industry vertical that there are reefer capacity shortages, and, at some point of the year, there is always a balance issue with capacity and there are times during the year when it is very, very difficult to get reefer capacity.
LM: Can you please provide an example of that?
Tyndall: The times of the year when beer is moving out of Colorado and sucking up a ton of the capacity or during produce season in places like Tucson, southern California or south Florida are all shipping at the same time and really pulling from that capacity. There is always a point every year at which reefer capacity gets attacked, and I think the impacts could be really, really big. And I think you are going to see some interesting potential issues with cold storage, because I anticipate that as efforts are made around positioning kind of semi-permanent and even temporary distribution for these vaccines within regional markets, there is the potential for some of the cold storage space typically designated for other items, whether it is food or other kinds of pharmaceutical grade products, to very likely be bought up and probably drive the costs of cold storage space to a premium.
LM: For the many carriers and shippers that have had a very difficult 2020, as it relates to things like securing spot market capacity, the vaccine distribution could be viewed as an added challenge. That said, how are the challenges balanced? It seems like a tricky situation.
Tyndall: Yes, I think so. For carriers that know they are kind of on the precipice of being the hot commodity, everyone is going to be fighting for them. It is like the fight with the angel and the devil on the shoulder, in terms of what to do. Are you going to take advantage of the opportunity to make top dollar potentially moving product that you don’t normally move at the expense of existing customers? It is like taking the bait for that new shiny thing. Or are you going to maintain relationships with customers, knowing that at the end of the vaccine distribution, those customers are still going to be there? I think that what a lot of companies have learned over the course of the last 20 years, notably with Hurricane Katrina and how it taught a valuable lesson, was that many of them [carriers] never got paid for those massive $20 a mile rates that they were lured in with. Many of them never got paid and some went belly up because of that. That was a big learning experience and I really think companies have had to get discipline and have learned some really valuable lessons about relationships over these fleeting opportunities to make a quick dollar. In the last few years, we have seen more discipline in that regard. There are some companies that will take the bait, whereas others will do the right thing…and will be there long after the vaccine opportunities are gone.
LM: What is the impact of vaccine distribution for your customers?
Tyndall: We don’t do a lot in the healthcare space and the moving of healthcare products, but our customers understand that they will be competing for that capacity and need to know how to prepare for it. The message that we have really pushed, for several years now, is relationships are everything. If you develop relationships that are collaborative and mutually beneficial with customers and carriers alike, chances are that things like navigating a pandemic or natural disaster can be more rewarding, because companies don’t want to be tossed aside for the next shiny thing that comes along. Organizations are becoming increasingly aware of that, and if COVID has taught us anything it is that customer experience, not just in using your product but also how they got it, is the differentiator. So how you manage to get your product into the store and onto the shelf can make or break your brand. There is a lesson for us all in that brand awareness and user experience and quick and effective transportation solutions that come clean and free is a big piece of the supply chain that has not historically been the focal point.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman