COVID-19 has shown us how vulnerable and fragile our global supply chain ecosystems are. Many months into the epidemic and with many countries easing up on lockdowns and claims of the ‘new normal’ in most ASEAN countries, food supply chains are still badly affected.
COVID-19 has caused unprecedented disruptions and the supply chain ecosystem of many organisations and countries have not been spared. Global trade volumes have been curtailed significantly due to lockdowns and bottlenecks either at points of origin or import. The are many causes for these slowdowns or disruptions ranging from truck driver shortages, blank sailings of shipping lines, grounded passenger aircraft fleets that have removed airfreight belly capacity to bottlenecks at ports of discharge because of poorly implemented lockdown policies. Regardless of the reason, the result is that essential goods such as processed food, agricultural products and medical supplies have not been reaching consumers as effectively and efficiently as they were pre epidemic.
LSCMS (The Logistics & Supply Chain Management Society) conducted a survey last week of close to 300 consumers in Singapore, Malaysia and Brunei to better gauge just how badly consumers are being hit. This picture of empty shelves at a leading supermarket chain in Singapore tells the story well.
80% responded that to date, they are still not able to purchase all the food items they could previously buy in markets and supermarkets in January 2020. 72% responded that if they are able to find what they are looking for, they are paying higher prices.
Shoppers able to purchase all the items usually found in markets or supermarkets in January 2020.
Are you paying more for the items you are able to find?
Malaysia fared better in the polls with 49% reporting that they could not find what they needed in markets and supermarkets but a whopping 84% reported that they were paying more for these items.
As indicated earlier, there are many reasons for the disruptions in food supply chains however one major cause of this disruption to supply chain ecosystems identified by LSCMS, and which very little focus seems to be given, is that there is no common classification, escalation or prescribed actions amongst different countries for how an epidemic of this scale could be handled. Although it has come under much criticism in the last few years, most countries are highly reliant on rules-based free and open global trade.
As governments in the ASEAN Member States (AMS) emerge from the firefighting mode it has been in these last few months, it is an opportune time to explore and implement a standard and consistent protocol for future potential crises, not limited to disease outbreaks but extended to include natural disasters as well.
Some possible things that could be done to ensure external and domestic border controls are kept as efficient as possible to allow continued access to raw materials and finished products to consumers during a crisis are:
1. An agreed definition of what sort of events specifically constitute to being a crisis.
2. Agreed mechanism to commence the crisis period and activation of the same.
3. Scope of essential goods and services to stay functional during the time of crisis to be indicated. This list can be segmented into various stages. For example, in the automotive sector, essential vehicle repair could fall in category 1, vehicle servicing in category 2 and vehicle grooming and minor accident repair in category 3.
4. Agreed definitions of what goods and services are deemed to be essential. The WCO (World Customs Organisation), HS (Harmonised System) Code would be the obvious starting point for goods and the International Standard Industrial Classification (ISIC) for services classification.
5. List of essential goods to be committed by each party in order to guarantee availability for consumer purchasing.
6. Commitments to allow import duty exemptions, import declaration simplifications among AMS potentially through the ASW for essential goods and avoid export restrictions of these goods.
7. Commitment to keep certain airports, seaports and customs
The above points are by no means fully comprehensive or all-inclusive however it is meant to be used as a reference point for further consideration and built upon to conclude in policy amongst AMS that will allow us to respond cohesively and effectively in times of crisis.
Wherever possible, this initiative should be aligned and interoperable with other systems that may be introduced by organisations such as the World Trade Organization or the United Nations to ensure trade resilience in times of crisis.
In addition to the above steps, specific AMS support for the Logistics sector for continued cross-border trade of goods in times of crises could include the following:
• Centralised, real-time and up to date data repository where each AMS trade circulars, notices and gazettes are posted.
• Formation and formalisation of a public-private consultative committee across AMS which includes governments, global and regional private sector, international civil society, farmers organisations and other key stakeholders to keep communication channels open and to work on the items listed above in a timely manner that will allow for roll-out across the AMS to be used as a benchmark for other regions and governments.
The thoughts and ideas outlined above are by no means exhaustive however we hope that this gives us a reference point from which to embark on this much-needed initiative to ensure our food supply chains continue to perform.