First COVID-19 ‘stress test’ passed, Food logistics in times of COVID-19

The Nagel-Group is used to respond flexible to fluctuating demand in retail. The panic buying at the beginning of the COVID-19 pandemic nevertheless presented an enormous challenge for Germany’s biggest food logistics company.

Nobody was prepared for the sudden surge. Nonetheless, the supply for people remained consistently secure. Nagel supplies discounters and supermarkets on behalf of numerous foodstuff manufacturers.

Every supermarket customer knows it is always the same story: On certain days, the shops are significantly fuller than usual, and the queues at the checkouts can get quite long. Nevertheless, the shelves remain well stocked. The reason is that production, logistics, and retailing adjust to fluctuations in demand promptly.

Christmas is marked on the calendar – Corona is not

The situation was different in March. Panic buying in the wake of COVID-19 caught the industry off guard. “We were facing quantities like before Christmas, but had little opportunity to prepare for them,” says Marcel Vogler, Managing Director of Nagel Deutschland.

“On some days, we had to collect three times as many goods from a meat and sausage producer as usual.” The term ‘as usual’, refers to ten truck loads. If those suddenly become 30, the dispatchers must provide 20 additional refrigerated vehicles. Food logistics provider usually make advance plans in this regard.

Processes are slower than usual

Additionally, many established processes no longer work as usual since the pandemic broke out. At the beginning of the pandemic, barriers and mile-long traffic jams slowed down international supply chains. Vehicles transporting foodstuffs were also caught up in those traffic jams, which extended over 40 miles.

The extreme traffic backlogs might be gone, but COVID-19 has changed many processes at the cross-docking points and in the administration. The consistent adherence to stricter hygiene regulations slows down the usual processes.

Many employees at the Nagel-Group have switched to shift work to ensure observance of social distancing. Well-functioning teams that usually work hand in hand keep a distance. It takes time to adjust to these new circumstances.

Fluctuating demand

“COVID-19 was and still is a challenge for the Nagel-Group,” says Carsten Taucke, CEO of Nagel-Group. “Especially since we have been experiencing a trend reversal since the beginning of April and demand has declined significantly.” It is almost as though consumers want to test the resilience and the capacity limits of logistics in the face of these extreme situations. A kind of stress test.

Logistics is teamwork

If food logistics in times of COVID-19 should turn out to be a stress test, then the Nagel-Group has passed it with flying colours. “Our customers experienced no logistics-related bottlenecks,” Vogler states. He also considers this a tremendous achievement of the drivers. Also!

“For there is one thing that we must not forget: Logistics is teamwork. On-time delivery equally relies on warehouse assistants, and the administrative divisions, including dispatch. They interlock like cogwheels.” Everyone does their bit so that processes run flawlessly even in a challenging environment, and the COVID-19-specific requirements are observed.

Well prepared for new developments

The ups and downs in the supply of retail are further complicated by an unusually severe crisis of another industry. Plummeting orders from the hotel and catering industry have not only affected the Nagel-Group. Does it surprise anyone? All restaurants stay closed in many countries, nobody travels on weekends, and every congress turns into a telephone or video conference.

There is little demand for well-functioning supply chains in hospitality. The Nagel-Group can react as soon as this changes. Nagel’s CEO Taucke assures: “We are flexible; thus, we can respond very quickly to fluctuating quantities – even if the catering sector takes off again. We will continue to do our part to secure the supply of the population.”