Clementine McLemore and Yunji Kim from the Business Research Program interviewed Patrick Douglas, Vice President, Security, Health, and Safety, Expeditors, to understand his perspectives on supply chain issues facing small businesses in Washington. Read the full report that includes this interview here.
All answers are the interviewee’s own views and do not represent any company. This interview has been lightly edited for clarity.
Looking at recent tensions between the United States and China and the profound impact of COVID-19, what would you consider the biggest challenge regarding supply chain disruptions?
A lack of transparency from the Chinese authorities in terms of the localized impact. We have very little idea on the impact of COVID in China. In 2020, we had some level of visibility because they shut down factories and increased lock down mechanisms and restrictions in the US, causing an imbalance in the supply chain.
Like a boa constrictor eating a large animal, there was an imbalance between US importers and Chinese exporters. Large volumes of goods started moving again, inciting a huge wave of cargo, and businesses couldn’t deal with the influx as a result (staffing shortages).
Specifically in Seattle, was there a particular issue you found to be more significant than in other areas, in the region or across the United States?
The Pacific Northwest is a very rule-following part of the country, so we created many COVID restrictions, and it became very restrictive. Look at how Texas responded to COVID vs. how Seattle responded to COVID: different leadership approaches. And most companies were not familiar with the health department policies.
What policies have been the most successful for companies in addressing these disruptions?
Shifting or moving capabilities to work remotely has been successful. There is a lot of in office work, so companies created flexibility to maintain logistic processes.
What local infrastructure problems are leading towards supply chain problems?
From a health and safety perspective, Seattle is understaffed and the ability to respond to a major outbreak is probably not strong enough. Great research, but cost of living is high, individuals who support those researches do not have high wages, so there is probably a better standard of living elsewhere. Competition between Tacoma and Seattle has been minimized.
Do you see vast differences between national and local supply chain disruptions?
Each country and jurisdiction created their own COVID rules, creating differences in how companies had to operate. Operating is very challenging, in trying to be globally consistent. The Northwest operating environment changed dramatically. Small importers are trying to find other sourcing other than China, so HTS importing volumes might start leaving China and going to low cost countries.
How would you advise small businesses who are just starting on how to build their supply chain in regards to resilience and other stabilizing factors?
Having a diversified supplier base. It is important to develop relationships with multiple sourcing partners, to have a similar product in different countries, establish partnerships to develop joint strategies, and rely on relationships more. The supply chain is not linear, it's more of an ecosystem, so there are ripple effects.