COVID-19 Recovery: Lessons Learned
The intermodal industry braced, then pivoted, as the coronavirus pandemic ravaged business and the global economy. As critical links in the supply chain delivering supplies to fight the virus, the spotlight was especially unrelenting. What lessons have been learned from remote working that could be beneficial to intermodal going forward?
This article highlights members sharing their experiences and what they learned going through the past 18 months and continue to learn while managing their business during this historic time. These interviews were conducted for IANA’s video, Intermodal Adapts.
As lockdown measures took effect in early 2020, intermodal service providers had a double challenge - maintain operations while ensuring continuity of business connections with customers, all without the benefit of in-person communications.
"We were forced to go to a virtual platform and quite honestly, it was a little horrifying," said Gary Cornelius, vice president of development for TCW.
"The pandemic really impacted our daily routine, or what people might call the 'original norm'," said Shelli Austin, president, InTek Freight & Logistics.
"The year 2020 was unique," said Tom Williams, group vice president, Consumer Products, for BNSF Railway, having to idle and re-deploy so many resources associated with the dip and then recovery amid the pandemic.
"It was like shooting in the dark," said Jim Newsome, president and CEO, South Carolina State Ports Authority. "We didn’t know what kind of consumption patterns we were having."
Once the initial shock of lockdown subsided, it quickly became apparent that intermodal companies were better equipped than most businesses to function in a dislocated environment. The fundamentals of the supply chain were forged from a need to make sense of chaos, complemented by the flexibility to thrive on change.
"It would have been easy for people to say, ‘I just wish they could back to normal,’" said Austin. "We had to kind of change the way we spoke around here and just say, ‘There is no normal.’ We had to adapt, and we’ve actually done quite well with that. We had to really work on the culture."
Providers moved quickly and found shifting already strong business relationships to a remote working environment less taxing than first thought.
"We have longstanding relationships with not only our clients, but with other partners that we operate with within the intermodal supply chain," said Newsome. "What this enabled us to do was to go remote quickly and still rely on those electronic communications in the same way we do."
For South Carolina Ports, the basic characteristics of day-to-day operations enabled the agency’s facilities to run with fewer radical changes.
"There isn’t a lot of face-to-face contact with customers in the ports as a matter of course," said Newsome. "From greeting trucks remotely, to operators in lift machines, to office staff in a brand-new spacious office, which helped us observe health protocols. It all enabled us to not miss a beat." That helped the agency handle rapidly increasing demand after 15 to 20 major retailers were named as essential businesses and required trainload capacity.
BNSF's Williams credited years developing strong carrier-partner relationships. The railroad was able to be quite productive remotely, he said, "with an established level of trust that helped develop solutions with customers during the pandemic."
Deemed an essential business during the pandemic for its work with government entities, Milestone Equipment Holdings frequently had a skeleton crew in the office.
"And when we didn’t have people in, we were constantly on Zoom and Microsoft Team meetings," said Doug Hoehn, executive vice president with Milestone. "There are things you miss not being across the table from someone, but it generally worked out very well. Bookings were being driven through our app, and the chassis business took off as imports surged late in 2020. There was a lot of volume out there that needed to be moved."
Eventually, it was precisely that intermodal business imperative — the need to move things — that helped providers find their footing and get creative.
"I think it was a big success for our industry as we went through the summer months [in 2020] of being very purposeful in getting the Personal Protective Equipment to market, to help our country deal with the pandemic," said Williams. "It showed a strong demand for the underlying benefits that intermodal brings to the supply chain."
"We’ve been fortunate to be aligned with the customers that have essential business," said Austin, leading InTek to expand its reach and helping arrange a total of 50 planeside pickups of PPE shipments for one of its largest customers, to then move into trucking and intermodal lanes. "Gowns, gloves and masks — they needed them now. The different modes, from rail to expedited trucking, pulled together and made our staff feel like they were part of a bigger cause in fighting the effects of the virus."
Surging demand saw BNSF intermodal volume swing by more than 50% from a low of 81,000 units in April to 124,000 units in December 2020, said Williams. "One of the big takeaways was that we should all be encouraged that the North American intermodal network was very resilient in the face of this unprecedented volume volatility. The pandemic made shippers more understanding of the inherent benefits of intermodal and wanting to leverage those in their supply chains."
But even as intermodal’s preparedness shone in the crisis, providers emphasized that the industry needs to stay prepared as normalcy returns.
"At the end of the day, we’ve come away with a different concept of what we’re capable of and what this agility has taught us," said Cornelius. The industry, he said, is already comfortable with an electronic business environment, from email to video calls. The further challenge is to put the experience of the pandemic to work for the organization, where strengths and weaknesses were revealed by emergency business plans enacted for the first time."
Others agreed, adding that there must be a broader understanding across the industry that intermodal is bigger than the sum of its parts.
"You can’t just extrapolate what happened in 2020 on future plans," Newsome said. "First, online ordering will level off as consumers spend less on goods and more on vacations, for example. Two, people must pay attention to capacity throughout the international supply chain in terms of translated capacity for trucks, rail, and ships, and have a little longer-term focus. We have to look at what’s good for the whole supply chain industry, be a little more strategic, a little more willing to give and take, not just optimize our own world."
In the end, that hard-won institutional experience is most valuable when it is shared.
"It is important to be part of trade organizations such as IANA to get contacts at a time when you can’t be knocking on doors," said Hoehn. "A lot of times, those people can open doors for you. You have to participate and network."
"One of the biggest things we can do," Newsome said, "is to align ourselves to make sure we are talking, bringing solutions together as supply chain partners, but then making sure those solutions align with what our end-user — the beneficial cargo owner — is looking for in an intermodal product.
"But to do that, we need to be willing to engage and ask questions, listen to answers with an open mind, and then decide how we as an industry need to come together and find those solutions that promote our end-users to support our business."
To view the entire Intermodal Adapts video, click here.