by Lowell Randel / SVP, government and legal affairs, Global Cold Chain Alliance
The COVID-19 pandemic has highlighted the critical role of supply chains to a strong economy where consumers have reliable access to essential goods such as food.
While the food supply chain has shown resiliency and strength, disruptions have highlighted some challenges. As a result, policy makers are paying closer attention to supply chain issues.
Congress provided the United States Department of Agriculture with funds to support the food supply chain through COVID-19 relief legislation. The recently passed American Rescue Plan includes $4 billion to support food supply chain and agriculture pandemic response.
In addition, the COVID Stimulus Package, part of the Consolidated Appropriations Act passed in December 2020, authorized no less than $1.5 billion for grants. They will go to small or midsized food processors or distributors, seafood processing facilities and processing vessels, farmers markets, producers or other organizations to respond to coronavirus, including for measures to protect workers against COVID-19.
GCCA is engaging with the Biden Administration to ensure that these pandemic relief funds can be used to assist companies across the cold chain. GCCA has met with officials at the White House and leaders at USDA to highlight the impacts to the cold chain industry and how its members have stepped up during the pandemic to maintain supply chain integrity while ensuring food safety and quality.
Access to grants under the Stimulus Package and the American Rescue Plan would provide much needed relief to help industry through this difficult time. GCCA has requested that grants be made available to food logistics companies to help offset COVID-19 related expenses in three areas.
PPE, cleaning and worker protection technologies
Worker safety remains a top priority for GCCA and its members. Throughout the pandemic, our members have made significant investments in personal protective equipment, cleaning and sanitation products and services, as well as new technologies including air filtration and electrostatic cleaning to protect their workforce.
Detention, demurrage and related costs of supply chain disruptions
Supply chain disruptions caused challenges to the efficient flow of import and export containers. This disruption has caused many of our members to face significant per diem, detention and demurrage charges outside of their control.
The disruption in flow of containers also led to added fuel and energy costs to keep refrigerated containers at the proper temperature to preserve food safety and quality while our members waited for the supply chain to move.
Supply chain disruptions have also caused increased costs related to critical materials and inputs and led to much longer lead times in procurement.
Labor costs
The pandemic has placed strains on the labor market, causing major costs to our members. Whether it is a lack of childcare or concerns with using mass transit, our members have faced a labor shortage during this pandemic to meet the growing demands.
To stay operational, companies have been paying overtime and premium pay rates to those who are healthy and willing to work. In addition, many have hired outside labor, which often comes with a hefty price tag.
In addition to administering COVID-19 relief programs, USDA is also conducting a review of the food supply chain. The review, triggered by President Biden’s Executive Order on America’s Supply Chains, is a department-wide effort to improve and reimagine the supply chains for the production, processing and distribution of agricultural commodities and food products.
USDA is seeking comments to help assess the critical factors, risks and strategies needed to support resilient, diverse and secure supply chains and ensure U.S. economic prosperity, national security and nutrition security for all Americans.
Such supply chains are needed to address conditions that can reduce critical processing and infrastructure capacity and the availability and integrity of critical goods, products and services.
The increased focus on supply chain issues represents an opportunity for the cold chain industry. GCCA is preparing comments on key issues impacting the food supply chain and will continue to work closely with the White House and USDA on pandemic relief programs and the food supply chain review to promote and protect the interests of the cold chain.
