Transportation and Logistics: 2020 Was a Year of Disruption.

• Author: Barkey, Patrick M.
• Position: ASSESSING MONTANA'S KEY INDUSTRIES

To say that the pandemic has challenged logistics would be a huge understatement. The global supply chains that lay hidden from view behind so many store shelves were exposed for all to see. When those shelves became bare, they were missing everything from toilet paper to bicycles. In the second quarter of2020, imports of goods fell by 20% from year-ago levels, throwing a monkey wrench into the production of computers, pharmaceuticals and countless other durable goods that were in high demand.

The closure of international borders and the cratering of air travel sent air cargo rates soaring by more than 100% along the dominant cargo route to Asia and Europe. Shortages were exacerbated by human behavior patterns that did not follow historical patterns of previous recessions. The shift from restaurant to grocery demand for food is a case in point. Another has been the dramatic acceleration in online retail, which has pressured the capacity of last-mile delivery services in Montana and elsewhere.

The result has been a whipsaw cycle through global supply chains, as shortages in components produce shortages in subassemblies and eventually final products. The low availability and high cost of air cargo services to interrupt this cycle has added to the challenge.

Much of the rail freight in...