Stacked cargo containers, coronavirus


COVID-19 and New York City’s Supply Chain

March 25, 2020

Purushottam Meena

Purushottam Meena

Temporary shortages of toilet paper, cleaning supplies, and protective gear have made the headlines in recent weeks, demonstrating COVID-19’s impact on both national and regional supply chains.

New York Tech experts are monitoring COVID-19 closely and sharing their informed perspectives as the situation evolves. Supply chain and business analytics expert Purushottam Meena, Ph.D., associate professor of operations management, shares his insight with City & State New York. Here are some key takeaways from the interview.

New York City Supply Chain

Experts agree that as of this moment, the supply chain is in overall good shape, as the United States has an adequate supply of food and pharmaceuticals to bring products to consumers. Meena notes that New York City’s supply primarily depends on trucks, which transport nearly 89 percent of total freight on a daily basis, with more than 30 thousand trucks crossing the George Washington Bridge.

“In New York City, the inbound supplies of top commodities primarily come from neighboring states. For example, about 22 percent of commodity products originate from New Jersey, 20 percent originate from Pennsylvania, and 15 percent come from the rest of New York State,” notes Meena.

The overwhelming majority of goods that arrive by truck include 99 percent of the city’s pharmaceuticals, in addition to 97 percent of construction materials and nearly 68 percent of energy products. The health of the trucking workforce is critical to the functioning of the supply chain. The system only works if there are enough qualified truck drivers to move products.

Supply Chain Vulnerability

Food and pharmaceuticals may be available in ample quantity, but a shortage of truck drivers could mean fewer deliveries, making their health critical to the health of the country and region’s supply chains.

While locally sourced goods will likely remain well-stocked and supplied, the latest travel ban may affect some specialty items. Meena states, “Imports from oversea countries like wine and pasta from Italy, and cheese from France could decrease.”

He also notes that the U.S. may also see disruptions in fruit supply chains from countries where the COVID-19 outbreak is severe.

Medical Supplies

With more than 100 hospitals and thousands of health care facilities, New York has one of the largest and most complex centralized health care delivery systems in the world. Local hospitals have reported shortages of medical supplies, such as masks, testing swabs, and other protective equipment. U.S. companies may also face a temporary shortage of critical drug ingredients that come from their overseas suppliers, mainly from India and China.

“Generally, large drug companies keep around two months of inventories. If the supplies are disrupted at the current rate, then drug companies may also observe an increase in price for a shorter period,” says Meena.