Coronavirus surcharge: a delicate balancing act

As the coronavirus crisis drags on, it is becoming increasingly difficult for logistics organizations to deliver on their existing promises. More and more carriers are having to adapt their routes and struggling with extra delays, plus there is a real risk of drivers becoming infected. Following a long-running price war in the sector, some carriers feel they have little choice but to introduce a coronavirus surcharge in order to survive this crisis. At the same time, from our position as a 4PL service provider, we’re seeing the exact opposite happening; other carriers are actively looking for creative ways of avoiding the need to impose extra costs on their customers. Where will this lead? Only time will tell…

Looking for balance

For us at IDS, these unprecedented times mean that we’re utilizing our carrier network more than ever before and doing absolutely everything in our power to keep our customers happy. But at the same time, we’re keen to continue to show solidarity with the sector. It’s a very delicate balancing act. After all, the coronavirus outbreak has cast a whole new light on cost reduction and delivery reliability in recent weeks.

Unburden where we can

Thanks to our transport management system (TMS), we provide our customers with visibility of all their shipments and relieve the burden on them wherever we can. But if it becomes apparent that certain delivery agreements are no longer possible using the regular approach, it’s a matter of being creative. Our freight managers are now based from home, but they continue to work on finding solutions to get every shipment to its intended destination at an acceptable price. With their expertise, business instinct and customer focus, they ensure that the costs don’t spiral out of control, without losing the trust of the carriers in our network.

Long-term changes

It’s too early to predict the long-term impact of these developments, but many companies will probably have to overhaul their purchasing strategy and supply chain before too long. Reduced dependency and sourcing raw materials closer to home are both likely to be very high on the agenda.

 

To find out more about how we’re helping our customers to keep their logistics activities running as smoothly as possible under these exceptional circumstances, contact Arno Spoek, Business Development Manager at IDS.