FreightWaves LIVE @HOME: Obama White House official says COVID-19 response depends on logistics sector (with video)

Ron Klain talking from home on video conference about pandemic.

Logistics companies and professionals are the linchpin of the public health effort to defeat the coronavirus, but patchwork of on-again, off-again lockdowns and social distancing rules around the country will make their job even more difficult than today.

That’s the conclusion of Ron Klain, executive vice president and general counsel at Revolution, a Washington, D.C.-based technology-oriented investment firm, and former chief of staff to then-Vice President Joe Biden, based on his experience as the White House Ebola response coordinator in 2014-2015. His job was to organize a whole-of-government response to the deadly Ebola crisis and work with other nations to stop its spread around the world.

Although the Ebola outbreak was on a smaller scale, health policy experts credit the Obama administration’s handling of the crisis for demonstrating how to mobilize public and private resources in a public health emergency.

“One lesson I learned in fighting the Ebola epidemic in West Africa is that it’s doctors, nurses, healthcare workers, scientists and researchers that beat a disease. But it’s logistics that beats a pandemic,” Klain said in opening remarks before FreightWaves LIVE @HOME. After scientists developed an Ebola vaccine in early 2018, for example, logistics companies using cold-chain systems were able to deliver it from the manufacturing location in Europe to remote parts of Congo, maintaining its integrity at a temperature of minus 60 degrees and helping to stamp out a new outbreak. 

Reallocating critical medical supplies and getting e-commerce shipments to people sheltering at home during the pandemic will require even greater logistics innovation, but the job will be complicated as different parts of the nation reopen on different schedules, and then experience second, and possibly, third waves of the outbreak that force shutdowns again, Klain told the virtual audience of freight transportation specialists.

The episodic resurgence of COVID-19 will stress the system because there will be demand in some parts for more home deliveries and for business deliveries in other areas that are back at work, he added. 

Companies won’t get back to February business levels for a very long time, Klain cautioned, because people will be very nervous about going out in public even with government restrictions lifted, and social distancing in restaurants and elsewhere will limit revenue potential. 

“It is unlikely that we are going to either get to herd immunity or a vaccine by the end of the year, so to be safe we’re all going to practice social distancing for the foreseeable future,” the Revolution executive said.

More than 69,000 people have died from COVID-19 in the United States and the death toll is likely higher than the confirmed number, experts say. New models show deaths could double by August.

Warehouse packers, truck drivers, longshoremen, airport ground handlers and other transportation workers are “unsung heroes” who need to be paid extra for taking a risk to deliver goods and services during the pandemic, Klain, a part-time law professor and lecturer, said. “We never considered these people as essential workers until now and they deserve recognition. But they also deserve some compensation. A ‘thank you’ isn’t enough.

“When people are putting their lives on the line to make it possible for others to work safely from home it’s important to provide some financial incentives. And I hope Congress will do that,” he said, adding that more rescue funding for workers and small businesses is also necessary. 

Asked to evaluate the current federal response, Klain noted that the Trump administration’s decision to leave supply issues to each state and provider has led to a “chaotic” situation of supply shortages and competition in different parts of the country. 

“The alternative would have been for the federal government to take more control of the supply chain, use a tool called the Defense Production Act, that the president has, to assert his authority to place orders for all these goods at the federal level and distribute them all at the federal level,” he said.

Despite well-publicized manufacturing bottlenecks, “the performance of the logistics industry in managing through this has really been exceptional,” he said. As needs for protective equipment and ventilators subsidies in the Northeast, the challenge will be getting them to new outbreak areas “and that’s a job, really, for coordination at the White House.”

Several states, recognizing that federal coordination is not imminent, have formed coalitions to develop regional supply chain and purchasing strategies. 

Revolution is an investor in FreightWaves.