CH Robinson helping Minnesota manage cost of PPE procurement

CH Robinson, one of the world’s largest logistics companies, says it has helped save the state of Minnesota more than $1 million in transportation costs associated with procuring more than 72 million pieces of personal protective equipment (PPE), despite the many logistics challenges presented by the COVID-19 crisis.

PPE includes face masks, eye protection, gloves, gowns and N95 respirators for medical and other frontline personnel.

“COVID-19 has created unprecedented logistics challenges across the global supply chain when the rapid movement of PPE is more essential than ever,” said Bob Biesterfeld, CH Robinson CEO and president. “With our teams based all over the world, including over 20 offices in China, where the majority of PPE is sourced, we are tracking regulations that change weekly and leveraging our vast network to help our customers strategically manage the mounting risks the pandemic has presented.”

CH Robinson is part of the volunteer Minnesota Task Force that united government and private organizations in an effort to provide PPE for the state, which is facing increased budgetary pressure due to the challenges associated with delivering the equipment, including transportation and logistics costs, especially as it attempts to reopen.

According to the company, increased demand for PPE, the proliferation of counterfeit products, enhanced FDA regulations of medical supplies, rapidly evolving customs compliance guidelines, and a sharp drop in passenger plane capacity have all contributed to the following trends:

• Supply chain disruption: Over 90% of Internationally sourced PPE shipments have been disrupted in some way
• Compliance issues: Cargo inspection rates of PPE out of China have dramatically increased, lengthening the average waiting period prior to transportation from 3 hours to 2-3 days. Additionally, there are increased import customs delays and shipment refusals happening across the globe
• Longer transit times: Normal delivery time for air freight from China to the US has doubled or tripled from 4-6 days to 8-14 days
• Higher transportation costs: The price of expedited shipping out of China for PPE has gone up to 3-4 times the average (and, at times, as high as 8-10 times the average) amid unprecedented global demand all hitting at the same time
• Other rising costs: Increased commodity prices (e.g., the price of face masks has increased 2-5x the average) and transportation disruption are creating the need for more cargo insurance policies and at higher rates

CH Robinson said, as the transportation and logistics leader on the state’s task force, it is helping Minnesota navigate these trends effectively by leveraging its global supply chain expertise, advantage of experience, data and scale, and reputation as a strong partner in times of crisis.

“CH Robinson’s global expertise and scale provided the state with critical logistics and supply chain assistance that reduced the transportation costs and time needed to secure PPE needed for frontline healthcare workers,” said Wayne Waslaski, the state’s project manager for the Critical Care Supply Team.

As the No 1 freight forwarder from China to the US, CH Robinson was able to take action, while leveraging its full suite of global services, including customs, air, ocean and surface transportation expertise, to ensure essential PPE, largely produced in China, was moved as quickly and inexpensively as possible for Minnesota. This included:

• Leveraging CH Robinson’s expertise and scale to secure better rates and reduce transportation costs by at least 25%
• Optimizing dollars spent across air, ocean and surface transportation modes; at times, breaking up freight to get the most urgently need supplies to the state quickly, while finding cheaper transportation options for less time-sensitive supplies
• Consulting on transportation strategies and deploying innovative solutions, such as selecting a ‘fast boat’ over air freight to deliver an order of surgical gowns, which saved $500,000
• Deploying smarter solutions that seamlessly connected expedited ocean service with CH Robinson’s contracted truckload network, the largest in North America, shortening delivery times by 10-12 days, to get needed PPE faster for the state
• Helping the state avoid shipment delays, refusals and fines by providing expert guidance on CBP and FDA regulations to ensure requirements are fulfilled before shipment departure
• Providing local expertise on the ground globally, which included providing real-time information on regulatory changes in India that allowed the state to make smarter, faster decisions on where to source surgical masks
• Offering real-time visibility via Navisphere, CH Robinson’s proprietary global multimodal technology platform, enabling near real-time tracking of million-dollar truckloads of supplies purchased by the State of Minnesota to ensure timely and safe delivery

“At CH Robinson, we remain focused on the important role we serve to provide continuity in the global supply chain, especially in this time of crisis,” Biesterfeld said. “We were honored to lend our global expertise, network of local experts around the world, and technology to help the state of Minnesota navigate the complex global logistics system and optimize their budget at this critical time.”

Visit chrobinson.com/en-us/About-Us/ppe-supply-chain-savings to learn more.