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NDTO News Article

Exporting in the Time of COVID 19- Lessons Learned and Looking Ahead

For our last edition in the series of Exporting in the Time of COVID-19, we revisit subjects from our previous topics and look towards the future with lessons learned as more information becomes available. While some of us are seeing the light at the end of the tunnel when it comes to the pandemic, there are many countries still in the midst of the fight. Keeping that in mind, there are many lessons to be learned so far, and how we can all continue to find ways to rebound and be more resilient in light of this ongoing global pandemic

Global cooperation has become essential on so many levels, including government, for and non-profit businesses, and private and public sectors, to find innovative approaches to keep forward momentum. Teamwork is vital as companies collaborate to spur each other’s success. Maham Siddique said it well, when speaking about supply chain resiliency, that “connectivity, transparency, technology, and flexibility will empower buyers and suppliers… The resiliency-building lessons learned from the pandemic have taught us that establishing collaborative solutions can drive better trade outcomes (Teamwork ‘Key to Overcome COVID-Induced Trade Hurdles’, 2021).” She goes on to highlight four resiliency tactics for the future that every business should know – how their own supply chain works, how to embrace technology, having transparency in business, and how to flexible. All of these items can be identified and utilized to better prepare for the next global disruption – and all experts say there will be another one.

Supply Chains

Much was learned in the supply chain and logistics arena from the pandemic. Nimble and agile became two of the descriptors of successful transportation and logistics companies coming through the pandemic. Teamwork, agility, and re-routing goods and supplies became essential to navigate the continuously changing logistics environment during the pandemic. Traditionally, supply chain experts were trained to focus on efficiency and low-cost solutions, but the pandemic forced a paradigm shift taking risk management into account. Evaluating procurement costs, lead times, and material sourcing alongside profitability became essential (Phillips, 2021).  Adopting many digital technologies has become a clear advantage for companies that invested in these products long ago. They now have the intelligence and metrics to determine better logistical operations over their products.

Companies that initially saw a wide gap and disruptions in their supply chains talked early on about potential reshoring or nearshoring operations to provide more control. For many, this has not shown the be the case. Very few companies have taken the steps to re-shore. Better visibility of their supply/value chains and upgrading their logistics processes have proven to do the trick for many and will pay off in the long run.

Trade Policy

With many initial reactions to the pandemic, governments took steps to protect themselves before looking to their neighbors and beyond. Protectionism became a concern with policies focused on reactions to the pandemic in the immediate and not considering the breadth and depth that the pandemic could have globally. A year-plus later, we see that this is not the case. As pandemic restrictions started to ease, the collaboration between governments has started to increase.

Policy shifts will likely be seen as the vaccine rollout becomes more successful. Humanitarian and social programs are increasingly needed globally as food access, agriculture, small businesses and manufacturing industries start rebuilding. The process and structure will look very different depending on the country and the government’s focus. We will likely see shifts less concerned with protectionist goals and more emphasis on expansion or loosening of tariffs on certain goods as humanitarian aid increases.

The UN Conference on Trade Development (UNCTAD) suggests that global trade should focus on climate change actions and developing programs to prioritize people and the environment (Make Trade More Sustainable and Inclusive, Leaders Say, 2021). Hopefully, these priorities of building up developing nations and increasing green energy and climate change initiatives will build towards a better future for the greater good.

Food Insecurity

Globally, there are several counties on the brink of famine, according to the UN World Food Program. The food supply was initially of concern, but as more research has come to light, access to food is a more significant problem in struggling countries. The food supply is available, but for many, it is not affordable. In many countries, food is supplied by small-scale farmers in local markets, and not the large production and complicated supply chain structures we see in the US. As lockdowns and public gathering restrictions were enforced, many local markets were unable to operate. Small-scale farming operations across the globe were more heavily impacted because of the structure of distribution and sales. Low and middle-income countries have been the most affected by hunger historically. What has been a predominantly rural issue now is seen throughout urban low and middle-income areas. The pandemic has increased hunger in urban areas dramatically due to job and wage instability.  (Sova, 2021)

With 50% of pre-pandemic food consumption coming from restaurants, this industry was hard-hit in developed countries. Overall, when the pandemic started to grip the world, many food-related businesses were making short-term adjustments, planning for a few weeks or months. As time when on, those adaptations had to become long-term fixtures. It is often easier to adjust for the short term, explains Brandon Barholt, president of KeHe Distributors, an Illinois bases fresh food distributor. A surprise he noted was that small manufacturers were more agile than anticipated, especially when compared to larger food manufacturers.  (Johns, 2021). The increase in at-home meal consumption, experts say, is likely here to stay. This is explained by a whole generation that did not know how to cook and was now forced to. Additionally, with income still an issue for many, eating out is a luxury that can wait. The pre-pandemic split of 50% restaurant food consumption and 50% at-home food consumption is not likely to return quickly in the US. While the US and other developed countries are not seeing empty shelves anymore, grocers are opting for a more focused inventory, ensuring staples are readily available. Many new products will be limited as grocers become more comfortable with the new buying habits of consumers. Hunger and food insecurity are still prominent in the developed nations, as access and rising food prices are likely to increase over time.

In 2021, many countries and communities will continue to struggle to put nutritious food on the table, warns the UN. Rising food prices are a limiting factor for families across the globe and will continue to be a major hurdle for the foreseeable future. Humanitarian aid, non-profits, and governments will need to embrace many tools to combat the struggles to reduce food insecurities.

Uneven Recovery

International businesses overall fared better than their solely domestic businesses. Global connectedness has been attributes as a key source of success for international firms, but also made international companies more susceptible to the initial pandemic shocks. After the early shock of the pandemic, international firms had multifaceted efforts to respond – employing several tactics like working remotely, adapting products, finding new suppliers, and in some cases loaning out workers to other manufacturing firms (Borino, Carlson, Rollo, & Solleder, 2021). Soley domestic businesses employed many of the same tactics but had fewer options to adjust within their borders.

Downstream supply challenges for many businesses are still a concern. Slow production capacity hampers some of the previously available goods to deliver products to consumers. Wood shortages, for instance, mean that shipping palettes are still in short supply, causing some manufactures to cut back production. Other companies have adapted to new packaging and other staples to move forward despite the shortages (Johns, 2021).

For example, the manufacturing industry is picking up in the UK. It is reported to have the highest growth rate since 1994, including orders, employment, and output (Drives and Controls, 2021). Keeping this momentum going will be a continued battle with embracing greener technologies set forth by UK governments and maintaining a competitive edge with other industrial and manufacturing powerhouses. The UK rose to the challenges presented by the pandemic and succeeded. Keeping the drive from the pandemic will be the key to maintaining greater global competitiveness for the UK manufacturing industry.

The global pandemic is still running amok for many countries, and now more than ever, a call to action for philanthropic endeavors is needed. There is a lot of potential for companies to join in on the continuing pandemic fight. Filipi explores how to identify a niche that your company may be able to fill and promote philanthropy across your organization (Filipi, 2021). We saw many manufacturers in the Midwest transition their production lines for PPE creation or hand sanitizers. This type of ingenuity is still needed as we continue to move through the pandemic waves.

Although resilience and adaptation remain at the forefront of recovery, there is still a long road ahead. Many industries, including food and manufacturing, are overall struggling to fill job vacancies hampering rebound. Additional surges and vaccination rates continue to impact countries across the globe, with travel restrictions still in effect throughout many parts of the world. Many economists and leaders are predicting continued challenges through 2021. However, through continued support, collaborative efforts, and transparency, recovery is happening, although it is a marathon, not a sprint.


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