By Pete Mercer
The supply chain for any industry can be a fickle beast, especially in the light of the obstructions of the last few years. In a matter of weeks, a domino effect created by the coronavirus pandemic crippled the supply chain of just about every major market in the world, not least of all the healthcare industry. Shortages of PPE and other medical supplies are still being felt by health systems across the country.
While we are seeing some improvements since the onset of the pandemic, we’re a long way from being back to where we were before. In a recent episode of the Repertoire Podcast, Repertoire Magazine publisher Scott Adams sat down with Billy Harris, former CEO of Sri Trang USA, to discuss the current state of the PPE logistics market.
The current state of logistics
According to Harris, the containers play a significant role in how we got to this point. He said, “The big issue is, as we see it, China really got ahead of the rest of the world and pulled in a tremendous amount of containers that left the globe very short in other parts of the market. It’s taken us about two years to get containers repositioned so that we could then stuff them with produced products.”
The availability of containers is just one component of the bigger picture – the containers need to ship on an ocean vessel and be unloaded once they arrive in the port. Without the personnel and equipment to get containers unloaded and moved across the shipping yard, we begin to see blockages that trickle from the cargo ships waiting in harbors to the lack of containers at the source of the shipping channel. This is just one aspect of that domino effect we saw in early 2020.
While we are certainly still feeling some of the pressure points in the PPE supply chain, it looks like the situation is starting to stabilize and improve. Harris said, “Container movements are getting a little bit of relief. During the height of the pandemic, ocean freight rates peaked at just above $30,000 to move a container from South Asia to the east coast of the United States. Containers are now starting to get positioned and becoming available, and we’ve seen those rates come down a little bit.”
How to move forward
In order to move forward, Harris says we need to think about PPE logistics with a short-term framework – planning for the rest of 2022 and rolling into 2023. Right now, we are facing a “whipsaw effect” where there is more capacity for PPE than there is current demand. Even so, “the issue that we still deal with is getting those to move in a flawless fashion, whether it be through ports or on the ground,” Harris says.
With inventories stocked domestically, how can we avoid future pitfalls in shipping PPE in the United States? Harris says, “It’s all about getting those goods to move. This means that you may have to work with and contract with multiple carriers, vendors, and suppliers to move your goods instead of a shortlist of your primaries. We have been forced to look outside of our normal everyday relationships that we worked with during the pandemic, so it’s just an expansion of your supply relationships.”
Additionally, you can position your company outside of certain markets. With regards to Sri Trang, Harris said, “We’ve avoided using the West Coast as much because of all the congestion, the labor shortages, and the potential for worker’s strikes at the ports. We have looked at secondary and tertiary types of markets to move our goods in and out of, and it has served us well to be able to make sure that we’ve been able to keep our customers with the flow of products.”