Logistics Technology Update: the right tools to mitigate COVID-19 disruption

Supply chains around the globe continue to face COVID-19 disruptions for nearly the third month in a row. To thrive in times like these, freight forwarding companies must have the right tools for success.

“In our industry, it’s important to ‘flow the work’ and prioritize technical resources towards customer onboarding and data integration, especially when many customers are working from home,” said Chris McMillin, AIT Worldwide Logistics’ vice president, information systems.

On this episode of Logistics Technology Update, presented by AIT Worldwide Logistics, FreightWaves market expert and analyst Zach Strickland welcomed McMillin to discuss how IT departments can help freight forwarders and their customers mitigate the effects of COVID-19.

The past year has been challenging for air cargo, especially between the United States and Asia. The chaotic environment for shippers has largely been due to the COVID-19 pandemic.

For example, SONAR’s AIRUSD.HKGNOA (highlighted in green) shows that the price to ship air cargo from Hong Kong to the United States had steadily risen since March but has dropped in May to $6.49 per kilogram.

In contrast, AIRUSD.PVGNOA (highlighted in blue) shows that the price between Shanghai and the United States has skyrocketed to $12.27 per kilogram, representing nearly a two-month, $10 increase. The price spike can be largely attributed to the cut in passenger air services; most air cargo from Asia flies commercially, and many airlines have cut scheduled flights by as much as 90%.

SONAR’s AIRUSD.HKGNOA (highlighted in green) and AIRUSD.PVGNOA (highlighted in blue) shows the price per kilogram to ship air cargo from Hong Kong and Shanghai to the United States. Since the beginning of March, the price between Shanghai and the United States has skyrocketed to $12.27 per kilogram while the Hong Kong-U.S. air freight price has tapered off at $6.49 per kilogram.

McMillin believes that a willingness to embrace flexibility in addition to maintaining safe and on-time deliveries will be key to supply chain profitability in such a challenging environment. He suggests companies invest in state-of-the-art internet of things (IoT) technologies to track freight movements and help route cargo around supply chain congestion and bottlenecks.

“Precise tracking also ensures critical cargo, like PPE and tech hardware, can be securely monitored from departure through delivery,” McMillin said. “This technology also helps us when routing cargo around supply chain bottlenecks and congestion at ports and terminals.”

Although it can be overwhelming at times to maintain relationships with customers, teammates and partners around the globe, McMillin urges companies to refocus on fundamentals and to be brilliant at the basics; it’s crucial for customers to know you’re available.

McMillin also advises those who’ve traded an office desk for a work-at-home environment not to let down their guard regarding cybersecurity. He warned that a rise in cybersecurity events has coincided with the increase in stay-at-home work as team members are accessing sensitive information away from secured networks.

“One of the largest ocean carriers was attacked last month and that’s just one example from a growing list,” McMillin said. “Make sure you’re well prepared because the threat is greater than ever before.”

Chicago-based AIT Worldwide Logistics is a global supply chain management company with more than 60 locations worldwide providing sea, air and ground solutions in nearly every industry.

“At AIT, we recently helped a customer shave four weeks off their integration schedule to meet their shifting supply chain demands,” McMillin said. “We also partnered with our sales and ops teams to implement a touchless delivery program to keep people safe and keep the supply chain moving.”

He continued, “Our job in technology is creating a gearing effect for our people — so that we can achieve even greater outcomes more quickly and more efficiently. This allows us to soften disruption and continue to deliver results where they are most needed.”