EDEN PRAIRIE, Minn.–(BUSINESS WIRE)–C.H. Robinson, one of the world’s largest logistics companies, and a member of the volunteer Minnesota Task Force that brought together government and private organizations to get personal protective equipment (PPE) for the state, today revealed costly transportation and logistics trends that are adding to budgetary challenges for states in need of PPE, especially as they deploy reopening strategies.
“COVID-19 has created unprecedented logistics challenges across the global supply chain when the rapid movement of PPE is more essential than ever,” said C.H. Robinson CEO and President Bob Biesterfeld. “With our teams based all over the world, including over 20 offices in China, where the majority of PPE is sourced, we are tracking regulations that change weekly and leveraging our vast network to help our customers strategically manage the mounting risks the pandemic has presented.”
Increased demand for PPE, the proliferation of counterfeit products, enhanced FDA regulations of medical supplies, rapidly evolving customs compliance guidelines, and a sharp drop in passenger plane capacity have all contributed to the following trends:
- Supply chain disruption: Over 90% of Internationally sourced PPE shipments have been disrupted in some way
- Compliance issues: Cargo inspection rates of PPE out of China have dramatically increased, lengthening the average waiting period prior to transportation from 3 hours to 2-3 days. Additionally, there are increased import customs delays and shipment refusals happening across the globe
- Longer transit times: Normal delivery time for air freight from China to the U.S. has doubled or tripled from 4-6 days to 8-14 days
- Higher transportation costs: The price of expedited shipping out of China for PPE has gone up to 3-4 times the average (and at times, as high as 8-10 times the average) amid unprecedented global demand all hitting at the same time
- Other rising costs: Increased commodity prices (e.g., the price of face masks has increased 2-5x the average) and transportation disruption are creating the need for more cargo insurance policies and at higher rates
Navigating these trends effectively has been key for the state of Minnesota who leveraged C.H. Robinson, known for its global supply chain expertise, advantage of experience, data, and scale, and reputation for being a strong partner in times of crisis, to be the transportation and logistics leader on the state’s task force. To date, C.H. Robinson has helped saved the State of Minnesota more than $1 million in transportation costs associated with procuring more than 72 million pieces of PPE, including face masks, eye protection, gloves, gowns and N95 respirators.
“C.H. Robinson’s global expertise and scale provided the state with critical logistics and supply chain assistance that reduced the transportation costs and time needed to secure PPE needed for frontline healthcare workers,” said Wayne Waslaski, the State’s project manager for the Critical Care Supply Team.
As the number one freight forwarder1 from China to the U.S., C.H. Robinson was able to take action, while leveraging its full suite of global services including customs, air, ocean, and surface transportation expertise, to ensure essential PPE, largely produced in China, was moved as quickly and inexpensively as possible for the State of Minnesota. This included:
- Leveraging C.H. Robinson’s expertise and scale to secure better rates and reduce transportation costs by at least 25%
- Optimizing dollars spent across air, ocean, and surface transportation modes; at times, breaking up freight to get the most urgently need supplies to the state quickly, while finding cheaper transportation options for less time-sensitive supplies
- Consulting on transportation strategies and deploying innovative solutions, such as selecting a ‘fast boat’ over air freight to deliver an order of surgical gowns, which saved $500,000
- Deploying smarter solutions that seamlessly connected expedited ocean service with C.H. Robinson’s contracted truckload network, the largest in North America, shortening delivery times by 10-12 days, to get needed PPE faster for the state
- Helping the state avoid shipment delays, refusals and fines by providing expert guidance on CBP and FDA regulations to ensure requirements are fulfilled before shipment departure
- Providing local expertise on the ground globally, which included providing real-time information on regulatory changes in India that allowed the state to make smarter, faster decisions on where to source surgical masks
- Offering real-time visibility via Navisphere®, C.H. Robinson’s proprietary global multimodal technology platform, enabling near real-time tracking of million-dollar truckloads of supplies purchased by the State of Minnesota to ensure timely and safe delivery
“At C.H. Robinson, we remain focused on the important role we serve to provide continuity in the global supply chain – especially in this time of crisis,” Biesterfeld said. “We were honored to lend our global expertise, network of local experts around the world, and technology to help the State of Minnesota navigate the complex global logistics system and optimize their budget at this critical time.”
Learn more about how to build smarter logistics networks and some of the biggest cost pitfalls related to the transportation of PPE, here.
About C.H. Robinson
C.H. Robinson solves logistics problems for companies across the globe and across industries, from the simple to the most complex. With nearly $20 billion in freight under management and 18 million shipments annually, we are one of the world’s largest logistics platforms. Our global suite of services accelerates trade to seamlessly deliver the products and goods that drive the world’s economy. With the combination of our multi-modal transportation management system and expertise, we use our information advantage to deliver smarter solutions for our more than 119,000 customers and 78,000 contract carriers. Our technology is built by and for supply chain experts to bring faster, more meaningful improvements to our customers’ businesses. As a responsible global citizen, we are also proud to contribute millions of dollars to support causes that matter to our company, our Foundation and our employees. For more information, visit www.chrobinson.com (Nasdaq: CHRW).
1 #1 NVOCC from China to the U.S.