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METRANS

by Adylbek Abdykalikov, USC, IPPAM 2020

On April 3, 2020 Dr. Jean-Paul Rodrigue, Professor of Global Studies & Geography at Hofstra University, New York and a member of METRANS’ MetroFreight research center, presented his research on the impact of the COVID-19 pandemic on transportation to METRANS Advisory Board, faculty, and staff. Titled “Coronavirus Impacts on Trade and Supply Chains,” the presentation focused on the effects of the unfolding COVID-19 pandemic on international trade and supply chains.  Rodrigue was invited by METRANS Director, Professor and Ferraro Chair in Effective Local Government at the University of Southern California, Dr. Genevieve Giuliano.  “METRANS is fortunate to have a deep bench of experts from which we can draw,” Giuliano noted.  “Professor Rodrigue not only is one of the world’s experts in international trade, but also conducted a research project on the potential impact of a pandemic on global supply chains.  He is uniquely qualified to tell us what we can expect from this pandemic.”

 

Rodrigue’s presentation addressed the complex ramifications a pandemic can have on supply chains, notably the role of transportation as a diffusion vector during a pandemic and the impact on the continuity of supply chains. Rodrigue analyzed the spread of the disease in correlation with the global transportation network and shared that though we all benefit from our efficient and evolved transportation system, in this current critical situation, progress plays against us, essentially the strengths of contemporary supply chains become weaknesses during a pandemic. One aspect is in keeping up with the changing demands for the delivery of goods, as many of the attributes of efficiency (for example, just in time production and delivery, limited inventory, specialized and differentiated methods for residential versus commercial uses and destinations) limit our ability to provide an uninterrupted supply of goods under different and ever changing scenarios. The rapid spread of COVID-19 is also correlated with the modern advanced transportation system, particularly in China, which now connects everyone and everything. Rodrigue named this phenomenon as “the curse of connectivity,” essentially that our transportation system actually adds to the velocity and extent of a pandemic by efficiently transporting it along with the people and goods for which it was intended.

 

 

Rodrigue analyzed in detail the supply chain shocks we are experiencing.  A pandemic initially creates a phase of supply chain shock as key manufacturing sectors experience a drop in production capabilities. This was most significantly observed in China, our leading global manufacturer. This phase is followed by demand shocks as consumers respond by hoarding and other acute behavioral changes such as focusing on the purchase and accumulation of essential goods. “This quickly back-propagates along supply chains,” Rodrigue explained.  We hope that “the collapse in demand can be deferred into future consumption. Otherwise, the current pandemic will result in long term impacts on supply chains if economic activities do not resume promptly.”

 

Rodrigue concluded his presentation by identifying possible long-term impacts of COVID-19 pandemic on supply chains, such as strong deflationary trends, loss of trust in the world’s largest exporters, disruption, and resilience of supply chains, acceleration of reshoring and other.  He is continually updating his slides as new information is available; these updated slides can be viewed here.

 

We encourage you to visit this link to watch the full video of Dr. Rodrigue’s “Coronavirus Impacts on Trade and Supply Chains” presentation.

 

About the Author:

Adylbek Abdykalikov is a graduate student in the International Public Policy and Management Program at USC Price. He has working experience in various positions at the Ministries of Transport and Communication and Investment and Development of Kazakhstan and was in charge of Transportation and Civil Aviation policy development and implementation. He serves as the lead writer to METRANS Newsletter and lead student event coordinator for METRANS and PSR.