As The Currency’s team joined thousands across the country in working remotely to prevent the spread of Covid-19, I went on the hunt for a wireless broadband modem to supplement the unreliable wired connection into my rural home more than one week ago. 

The machines sold by the main Irish networks are made by Huawei. “We’re out of stock. They come from China and… you know,” a Vodafone shop employee said to me, putting up his latex-gloved hands. I received the same response in other outlets. To this date, shipments have not arrived. The Huawei home wireless broadband modem is also unavailable from eir. 

This is the nightmare scenario every business wants to avoid as transport and workplace restrictions become more severe, especially in the medical and agri-food supply chains crucial to both the population’s welfare and Ireland’s manufacturing base.

“Unobstructed transport of goods is crucial to maintain availability of goods, in particular of essential goods such as food supplies including livestock, vital medical and protective equipment and supplies.”

European Commission

Authorities at European and national level moved to reassure companies last week as the pandemic continues to progress westwards. “The EU opened green lanes on Thursday evening for lorries transporting all freight including food and medical supplies,” said Carol Lynch, Partner at BDO Customs and International Trade Services. “Before this, there were reports of long delays at affected borders and where borders had closed for people movement, so this should alleviate this problem.”

As borders shut down around the EU and between some member states, the European Commission’s new guidelines establishing priority for “emergency transport” state: “Unobstructed transport of goods is crucial to maintain availability of goods, in particular of essential goods such as food supplies including livestock, vital medical and protective equipment and supplies. More generally, such measures should not cause serious disruption of supply chains, essential services of general interest and of national economies and the EU economy as a whole.”

“In terms of Ireland, we have significant trade flows to and from mainland Europe so this will be a huge benefit in ensuring the supply chain remains open and moving,” said Lynch.

The document reminds national governments that all national border control measures must be referred to the Commission and is a warning to those intending to impose drastic restrictions such as those in Poland and Hungary, where long queues of lorries formed at the borders with Germany and Austria – two countries increasingly affected by the pandemic.

“Economy is slowing down so ‘non-essential’ freight disappears by itself.”

Raluca Marian, IRU

For hauliers, attention now turns to the implementation of the EU-mandated green lanes. Irish members of the International Road Transport Union (IRU) received an update from the lobbying organisation’s Brussels representative Raluca Marian at the weekend on talks with the European Commission regarding detailed guidelines for member states on conditions for lorries to be waved through closed borders, expected in the coming days.

The IRU wants recently imposed additional bureaucracy to be scrapped, including a certificate required at some borders to prove that the driver is in good health – Marian described this as “quasi impossible to get”. More broadly, the IRU has been lobbying for the restrictive list of essential freight to be dropped to remove bottlenecks at border checks, arguing that only essential goods are now moving anyway. “Economy is slowing down so ‘non-essential’ freight disappears by itself,” she argues.

Jerry Kiersey, managing director of the Dublin-based haulage company Green Tiger, told The Currency his own business transporting cars in Ireland and the UK was now grinding to a halt. But he highlighted difficulties faced by his colleagues in other supply chains where activity is continuing. “Bureaucracy is alive and well,” he said. While he acknowledged Taoisach Leo Varadkar’s recognition for hauliers in his St Patrick’s Day speech, Kiersey added: “At the bureaucratic level, that’s not the case.”

In Ireland, the Revenue Commissioners have now waived customs controls on medical supplies. “Critical pharmaceutical products and medicines will be given a Customs ‘green routing’ to facilitate uninterrupted importation and supply,” they announced.

“Again this keeps these goods moving into Ireland freely from outside the EU,” said Lynch.

On Wednesday, the Road Safety Authority increased the fortnightly driving time limit from 90 to 112 hours for hauliers and reduced the minimum weekly rest time to 24 hours. The “temporary and urgent derogation” is in response to “the potential impact of the coronavirus on HGV operations and the importance of the road haulage sector to the national economy and in response to requests from the haulage industry,” the RSA announced. It is in place until April 16 and will be reviewed every week.

No drivers on board

Flexibility will help the haulage sector deal with restrictions as normal work practices change to prevent the spread of the virus. Where countries have closed their borders in north-eastern Europe, Stena Line has stopped carrying passengers but maintained sailings for freight, using the extra space to accommodate drivers in single cabins.

On Irish Sea crossings, Seatruck Ferries was first to impose restrictions affecting freight transport, banning all passengers aboard its vessels including lorry drivers as early as March 12. “Our Irish Sea services will run as normal but will be restricted to the shipment of drop trailers and unaccompanied trade vehicles. Customers who normally move driver accompanied vehicles on our services can of course continue to move their traffic, albeit on an unaccompanied trailer only basis,” CEO Alistair Eagles wrote to customers. Irish drivers must now drop their trailer on the ferry, where a British counterpart will pick it up.

Arrangements so far have not affected the supply of essential European supplies into Ireland. 

“Food is fine. There are no issues at all,” said Lynch. “Supply chains are going to be a little slower depending on availability of staff for manufacturing. If the supply chain gets longer, you need to build that time, so keep your orders going as usual now to maintain consistency.”

The same cannot be said for trade outside the EU. There are reports of emerging shortages for bulk Chinese-made spare parts, such as simple nuts and bolts. 

Not only did China’s industry shut down for several weeks, disrupting production. As it resumes amid stricter controls and quarantine protocols at Chinese ports, the fits and starts in the world’s largest exporter have sent shockwaves down the logistics chain, disorganising cargo shipping. Some exotic fruit may become scarce in the near future as importers here can’t get their hands on enough containers to reach Africa and South America, especially refrigerated ones.

Peak milk

The real problem, however, is with exports. Processors across the meat and dairy industries report 60 to 200 per cent hikes in the cost of container transport, especially to Asia. They expect the ripple effect to hit routes to the US, a major destination for Irish butter, in the coming days. Meanwhile, the prices of flagship export commodities have begun to suffer. Between early February and mid-March, European skimmed milk powder prices fell by 7.5 per cent and butter prices by 3.6 per cent.

While beef exporters scramble to salvage Chinese exports, which they hoped would insulate them from Brexit and European oversupply, dairy co-ops cannot afford supply chain disruption as they enter the spring peak production period. Around 1 billion litres of milk is collected from Irish farms each month in April, May and June, filling the capacity of existing processing plants. 

Co-ops have long-running arrangements to divert milk lorries from one creamery to another if the need arises, but if one closes down because of staff illness over the next three months, others are unlikely to have space for them. Milk risks simply being dumped.

“We’re trying to learn from Italy and the protocols in place there.”

Conor Mulvihill, Dairy Industry Ireland

Downstream from the plants, the industry has been making contingency plans with various government agencies for the best part of this year to guarantee safe passage for its products in case of further domestic transport restrictions. “For example, if you’re transporting a truckload of powder, the virus cannot spread that way,” said Conor Mulvihill of Ibec’s industry branch Dairy Industry Ireland. “We’re trying to learn from Italy and the protocols in place there.”

In an ironic twist of history, dedicated staff working on Brexit preparations in recent months in manufacturing firms, industry bodies and government agencies have now reassigned conference calls and group emails to dealing with the similar supply chain challenges posed by the pandemic.

“New opportunities” for online retail logistics start-up

On a video call from his Wexford home turned temporary office, Scurri’s founder and CEO Rory O’Connor is among the few expecting to see business pick up as a result of the Covid-19 outbreak. The company’s software centralises information on orders, shipping and delivery for online retailers, pulling data from logistics providers ranging from courier transporters to in-store collection points.

“This is going to create new opportunities,” O’Connor said. While Scurri’s clients in the UK and Ireland are primarily mid-market operators around the €10 million revenue mark, “we’re seeing a lot of smaller companies that we weren’t seeing before,” he added.

The company’s existing customers include larger retailers such as eBay and online food and groceries stories Gousto and Ocado. O’Connor said Scurri has the capacity to deal with an expected doubling in home shopping in the coming weeks.

As smaller retailers try to move their business online, Scurri has the infrastructure to accommodate them – though O’Connor said a limitation may be the company’s 35-strong workforce ability to process sales for thousands of smaller customers.

Information collected from Scurri’s carrrier partners shows that disruption to home deliveries has so far been limited to some areas of Italy where couriers have stopped operating, and delays to parts of the US. 

O’Connor likened the pandemic to World War II in terms of the longer-term change it will cause in lifestyles. “I don’t think things will ever be the same again,” said O’Connor. “People will see about working and shopping online.” Citing the example of his own family, who were initially reluctant to shop online for groceries but now happily alternate with visits to the shops, he said: “This will increase online, but it won’t kill retail.”