UPS Says Coronavirus Response Affecting Air, Sea and Warehousing Services
About 35% of air cargo capacity worldwide has disappeared with the sharp drop in international passenger flights, according to Randy Stanley, UPS vice president for supply chain operations. Stanley and other UPS executives held a webinar April 3 on how the COVID-19 pandemic response is affecting cargo shipments. “Demand has significantly exceeded available capacity, especially on the trans-Pacific trade lane,” said Vito Losurdo, vice president of procurement, referring to air cargo. He referred to the Federal Emergency Management Agency's “air bridge” efforts to rush personal protective equipment to the New York region.
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Because air cargo is so limited, more companies are shifting to ocean shipments, but there's a 14% reduction in Asia-to-West Coast traffic, UPS said. So the costs of China-U.S. loads has skyrocketed, UPS said. Costs for Europe-U.S. shipments are flat.
Brittany Caskey, vice president for business development in logistics, said that it's not just medical supplies being affected by the international response to the COVID-19 pandemic. She said that companies have warehouses that are full because the stores they supply are closed, and yet shipments from China are arriving. Caskey said for companies that are already UPS customers, UPS can accept that overflow immediately. And, she said, UPS can get those set up within a week for contingent space.
She said UPS is also developing e-commerce for companies that didn't have it before, or that aren't considered essential businesses, which means they can't operate the customer service they would need to sell to consumers. She said they can get that going in a week, as well. She said that in that role, UPS is seeing a high demand for laptop shipments. Many families need to add computers for kids who are schooling online, or may need a better laptop to work at home.