May 11, 2020

During COVID, Transportation Industry Keeps on Rollin’

Transportation

3 min read

In this worldwide economic slow-down caused by the coronavirus, transportation is a critical infrastructure that continues to churn along, keeping America’s supply chain moving. Nowhere is this more evident than in retail and the restaurant sector where closures have led to a surge in online sales and food delivery, which has increased demand on delivery and logistics companies operating in the last-mile and home delivery segments.

As a specialty broker in same-day delivery insurance with over 3,000 clients nationwide, we are seeing how nimble and resilient the industry is as it’s forced to adapt to this new normal.

The biggest challenge in the current environment is coming up with new ways to keep drivers and their customers safe. This is especially difficult as many transportation companies are quickly adding new people to their workforce. Here are just a few of the safeguards that have quickly become standard:

Call-Ahead. White-glove delivery requires workers to enter customers’ homes to assemble or set up purchases such as furniture or home gym equipment. To minimize exposure, many companies are having their drivers call ahead to customers before delivery time to confirm that everyone in the household is healthy and symptom-free. In some cases, delivery might no longer include white-glove installation.
Contactless Delivery. Another widely adopted protocol is contactless delivery. Where signatures were once required to prove receipt of a package or delivery, last-mile and home delivery companies are waiving signatures to limit exposure and avoid passing on germs.
OSHA Guidelines. Internally, delivery companies are creating their own checklists for keeping drivers safe as well as following OSHA COVID-19 guidelines for the package delivery workforce. These national guidelines include commonsense advice like staying home if you feel sick, washing hands and social distancing. Many companies are going further by having drivers run daily temperature checks before delivery, sanitizing vehicle and offering PPE for anyone going into homes.

While we’re seeing a strong uptick in the business segments of home delivery and last-mile delivery, we’ve also seen a drop-off in some segments of the same-day delivery supply chain. For instance, retail distribution —in which brick and mortar stores supply their products from warehouses for distribution — has gone down. Additionally, with fewer cars on the road, the demand for auto parts and tires has dropped, so delivery and logistics companies involved with moving those items have seen a decline in business.

The single biggest question we’ve been receiving during the pandemic is whether Business Interruption (BI) coverage can help delivery and logistics companies. Generally speaking, it doesn’t appear that BI coverage would provide relief to most delivery and logistics companies. This is an evolving situation that remains fluid, so we are cautioning our clients to keep detailed records in the event the landscape changes.

Unlike other industries that were forced to close in order to mitigate the spread of the virus, transportation remains an essential business. While customers may feel impacts like delays in the shipments, delivery and logistics companies have remained open during the quarantine.

Transportation is a critical industry to the US economy. If that world doesn’t run, then the US stops running. The same-day/home/last-mile delivery sector is a remarkably agile industry that has taken the lessons of past to be able to pivot to the needs of today. It’s accustomed to dealing with the ebbs of flows of seasonal work. It has had to figure out how to handle an increasingly wide array of products while keeping delivery personnel and customers safe. And it will continue to keep the last mile of America’s supply chain moving in the safest way possible.

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Connect with the Risk Strategies Transportation team at transportation@risk-strategies.com

Email me directly at bjungeberg@risk-strategies.com

The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.