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Northwestern Buffett Institute for Global Affairs

Northwestern computer scientist and logistics expert discuss moving vital supplies to the front lines of the fight against COVID-19

With the U.S. stockpile of medical supplies for combating COVID-19 nearly depleted, a clogged global supply chain, and a “Wild West-style” online marketplace rife with hoarders and price gougers, what can be done to get medical supplies to health care workers on the front lines of the fight against COVID-19? Northwestern University Transportation Center Director and multimodal transportation systems expert, Dr. Hani Mahmassani, and Northwestern professor of computer science, Dr. Kris Hammond, addressed these questions and more during a Northwestern Buffett webinar this week. Here are four key takeaways:

“People aren’t holding out and being stingy. There is a fundamental lack of supplies.” Based on a survey of logistics leaders worldwide, Dr. Mahmassani and his team are “finding that the transportation system by and large is holding up really well.” Social distancing practices and terminal or port employee shortages are causing friction and delays, Mahmassani said, “but the system is, by and large, delivering what is available: the government has relaxed regulations limiting the number of hours truckers can work, carriers are redirecting their capacity to delivering essential goods and services, and medical supplies are moving from origin to destination.” The issue, he said, is a fundamental lack of supplies and, “in this case, everyone is the world needs these supplies—everyone is bidding for the same materials.”

“There are vulnerabilities in the system.” Despite the fact that existing medical supplies are moving through the transportation channels, albeit at a slower pace, our transportation systems are vulnerable. We are heavily reliant on sourcing medical supplies from East Asia, and the price of those materials is skyrocketing due to reduced air cargo capacity, Mahmassani said. “A lot of cargo normally moves in the bellies of passenger airlines, and those flights have come to almost a complete halt, so air is commanding very high prices.” We need to diversify our sources of medical and safety supplies,” he said. “Some suppliers are operating at more than 130 percent capacity and that’s not something they can sustain for a very long period of time.”

Mahmassani also anticipates increased labor shortages at critical warehouses, terminals, and other transportation nodes due to the spread, and fear, of COVID-19. Some areas are restricting trucks coming in from COVID-19 ‘hot spots’—particularly the east coast—and some truck drivers are refusing to travel to certain locations due to concerns about contracting the virus. All of this, as well as reduced capital expenditures and layoffs, will likely contribute to warehousing shortages and more significant delays in getting critical materials to their intended destinations. We need to reallocate capacity across markets, Mahmassani said, and invest in new technologies.

“Chinks” in the armor of traditional transportation systems have given rise to new asset exchange platforms. Dr. Kris Hammond and his team of graduate students at Northwestern set to work last month on addressing shortages and lags in delivery of critical medical supplies. “Traditional procurement and distribution channels are struggling to get new stock to hospitals to meet their escalating needs,” Hammond said. “To deal with the problem, we have built a system to connect the needs of health care providers with the resources that will satisfy them.”

Hammond and team partnered with online asset exchange manager, Rheaply, to build the Emergency Response Exchange (ERx), an online platform designed to connect hospitals with critical supplies, from organizations within and outside of the typical medical supply chain—such as veterinarians, dentist offices, and construction companies. They also developed a resource map that draws data from the exchange and other sources across the country, such as Project N95, to illuminate where medical supply needs exist. “There are lots of groups looking for solutions,” he said. “I want us to build the right product. If someone else does it better, we will join their team. We want partnership, not winning, and this is the attitude we should have about science and engineering and everything. It’s not about winning. It’s about hitting the mark and helping everyone win.” In this case, the ideal scenario is a system, or multiple systems, that can both address the local medical supply needs of the moment and scale across regional and national borders, Hammond noted.

“Capitalism is not always our friend.” Capitalism can work against us when every one of our states is competing for the same resources, Hammond said. “The federal government is in a position to step in and say, ‘we’re going to grab all of this stuff and allocate it according to need.’” he said. “Some people believe advocating for that is arguing against capitalism or the values of our country, but this has nothing to do with an economic or political philosophy. There’s a problem that needs to be solved. All that matters is the solution.”

This is not to say state and local governments don’t have a role to play. “Every major area has to have local-level logistical leadership,” Mahmassani said, pointing to city of Los Angeles Mayor Eric Garcetti, who appointed Gene Seroka, Executive Director of the Port of LA Chief Logistics Officer in charge of lifesaving logistics for the city during this pandemic. However, typically, the way we deal with a crisis is to borrow resources from our neighbors—the fire department in one city lends support to another in need—but now everything is on fire, hampering our ability to borrow resources, he added.

Ultimately, Hammond and Mahmassani both pointed to the need to think outside of traditional systems and structures. “The transportation business is generally very competitive, and this crisis is motivating cross-competitor collaborations and discussions. I’m proud of the sense of mission our industry is demonstrating,” Mahmassani said.  Hammond concurred, adding, “There are moments when you have to change things. People are used to the way they do business, but we have to bump them out of that. We have to wash away the decisions we made yesterday and think about how we do it today.”