Firms detail how global logistics survived coronavirus onslaught

A Maersk ship on the high seas. [File, Standard]

In the wake of the Covid-19 pandemic, governments around the world restricted all movement of people out and into the countries.

Although the flow of cargo to and from most of the affected countries was not subjected to these restrictions, complications arising from Covid-19 shocks resulted in logistical bottlenecks which hampered the seamless flow of goods.

“The shocks were big,” said Asif Amin, the Managing Director for Keitt Exporters in an interview with Transform Kenya, an initiative by The Standard Group.

Mr Amin noted that their avocadoes could not be shipped to their destinations on time.

“Some of the time the crew got infected and cargo could not be discharged and got delayed at the port. This had a lot of effect on quality,” explained Amin.

The first three months of 2020 — when most of the countries shut their borders and all kinds of social gatherings were prohibited — were tough for Kenyan exporters.

Heman Boodia, the Vice President for New Wide Africa, talked of how they had to fire workers due to the disruption.

Before the pandemic, they had 8,000 workers. However, due to the social distancing rules from the Ministry of Health, they were forced to reduce their workforce by 3,000 workers. New Wide Africa now only has 5,000 workers.

Then nervousness crept in with companies such as Kakuzi, an agricultural company that exports avocados, tea and macadamia, desperately trying to get to contact its key stakeholders in the supply chain about what’s going on in the market, ports, ships and general logistics, according to Christopher Flowers, Kakuzi Managing Director.

The Covid-19 pandemic could have easily dwarfed exporters, but those who partnered with Maersk, a Danish shipping company, held their ground.

“Maersk had a global reaction to Covid-19 that was really classic,” said Martin Ochieng, the Group Managing Director, Sasini Plc.

“Starting from what we could see in terms of good service levels, good provision of stock of containers we needed, especially refrigerated containers for our avocado business but more importantly dry containers for our tea business as well.”

Maersk, which had been at the core of the logistic industry since 1904, retained its commitment to its customers, said Ochieng.

The Danish trademark has deployed an end-to-end supply chain that international exporters need to efficiently navigate through the global markets.  

The logistical nightmare started with the disruptions to manufacturing in China where the viral disease was first reported.

Because China is a factory of the world, the disruptions in manufacturing as factories shut down rippled through global supply chains.

The International Finance Corporation (IFC), the cargo was backlogged at China’s major container ports, travel restrictions led to a shortage of truck drivers to pick up containers, and ocean carriers cancelled sailings.

One of the World's largest cargo vessels MV Poseidon sails through the Likoni Channel in the Indian Ocean waters of Mombasa on February 26,  2015. [File, Standard] 

The resulting shortage of components from China impacted manufacturing operations overseas.

And the headache did not end there for Kenya. The testing of truck drivers on the borders between Uganda and Tanzania caused huge traffic, denying households and factories essential goods.

“We have a very sophisticated logistics function for our business and that logistic function was in complete coordination with the Maersk. In 2020, we had one of our best shipping years,” said Mr Flowers.

Mr Ochieng explained that Maersk had a global reaction to Covid-19 that was really classic.

“They retained their commitment to their customers, starting from what we could see in terms of good service levels, good provision of containers, especially refrigerated containers for our avocado business but more importantly dry containers for our tea business as well,” said Ochieng.  

Asif gave an example of how they booked a ship from Amsterdam but, unfortunately, due to restrictions at the port they could not meet the requirement so they were forced to offload their cargo in Germany.

From Germany, they had to truck the cargo into Amsterdam.

Mr Boodia noted that when most of the vessels were not on time and were delayed, Maersk was still on schedule.

“I can say 95 per cent of their vessels were on schedule.”

“We owned the initial inland value chain, the transport of tea from our factories to our warehouse, the managing of that warehouse then the transition of that into the export process,” said Ochieng.

Maersk also has a reputation for engaging the forwarder, and the transporter and they also provide the shipping and attend to other issues within the port and the transhipment port, said Alex Kariuki, the Logistic Manager, Kakuzi.

Consequently, added Kariuki, Maersk ensures that Kakuzi’s code chain is not broken all the way between the time the fruit is picked to the time the fruit is delivered to the cosigners.

 “Their equipment is new, they have the best technology especially if you look at their CA containers and they are using the best containers, clients are happy, and they are maintaining their transit time and also the lobby office is very supportive, all issues are addressed in time, and that is what we are looking for when we are dealing with perishables,” said Amin.

The other attraction with Maersk, said Boodia, is the fact that they can offer special prices and services due to their professionally trained staff.

The global supply chain is not yet back to normal. There are still Covid-19 restrictions in some parts of China, with the port of Shanghai being shut down.

Although China has started to ease the restrictions, there is still a large backlog.

Moreover, the war between Russia and Ukraine has added to yet another logistical nightmare.

Covid 19 Time Series

 

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