You are likely to suffer from COVID-19, but probably not by being infected. Thousands of companies in the U.S. are–or will soon be–having emergency meetings on COVID-19 and how they are going to proceed in the face of this monster threat.
I know because I was just in one of those meetings on Friday. We had the meeting because a few of our clients–small businesses but important to us–asked us for our plans. They asked because the larger corporations are activating their “BCDR” plans. “BCDR” means “Business Continuity and Disaster Recovery.” Many businesses that are required to undergo SOC-1 and SOC-2 (AICPA) audits, or other industry standard audits, must have these plans in place. Large and public companies absolutely have to have them.
And as they say in the military, feces runs downhill. So you might find your 12-person company entertaining a request for “what are you going to do about Coronavirus?” Then you’ll have a meeting about it.
The general consensus is doing nothing at all is not a good answer. At minimum, companies will put some extra sanitization procedures in place: hand sanitizer stations, mandatory hand washing, and “go home if you’re the least bit sick” enforcement. It is this last item that’s going to undo our economy in the next 60 days if health authorities can’t get ahead of COVID-19.
Researchers have calculated an R0 (“R-naught”) value for COVID-19 of between 2.2 and 2.3, meaning that for every infected person, they can expect about 2.2 people to be infected by that person. That’s like the doubling penny calculation: If left alone, it won’t take long for the outbreak to grow into a major pandemic. However, in the face of strong countermeasures, reported COVID-19 cases continue to grow at a pace of about 2 percent per day. Do the math.
The problem is that it takes up to seven days before you even know you’re infected. And the virus is spreading beyond the group of people who have recently traveled to China, meaning researchers in the U.S. now have to track down multiple vectors that have a week’s head start. For those seven days, infected people are flying around the U.S., infecting an average of 2.3 people. It’s easy to see how in a week or two, 62 cases (3 in the last 24 hours) can easily turn into a few hundred, then thousands.
In the meantime, we’re going to start implementing strong countermeasures. Not the government, mind you. That won’t happen until a genuine local outbreak occurs. The countermeasures will come at work. And that’s going to hurt us all in the pocketbook.
If you’re an hourly-wage employee, be prepared to be sent home if you feel the least bit “puny” (as we in the South call it). If you’re running a small company, be prepared to suffer some supply chain pressure. If you’re in the transportation business, you may get positively screwed.
Imagine infected truckers going coast to coast. Imagine what countermeasures are going into place at Walmart, Amazon, and Target distribution centers, not to mention places that handle our food supply. Imagine what losing some of the larger distribution hubs will do to supermarket shelves. Then take that, and look at just one industry.
Let’s look at trucking. The trucking industry itself is 5.6% of U.S. GDP. But more than that, it affects some 40% more of our GDP since it’s the largest portion of supply chain logistics. If just 10% of long-haul and local trucking is disrupted, that will ripple through our economy like a tsunami. It will idle factories. It will cause shops to run out of goods.
And if enough people are sick (or thought to be sick) at any given factory or warehouse, it will have to shut down for at least seven days. This is why your company is having emergency meetings.
Very few companies will be driven out of business. Very few, relatively speaking, people will die from COVID-19. But tens of millions will be harmed, and some businesses will be irreparably harmed, financially.
You may miss a paycheck, or lose out on needed overtime, if you’re an hourly worker. You may lose runs and paid miles if you’re an independent or contract trucker. You may have to pay large surcharges on supplies and equipment if you’re a small business. This won’t be because the virus is devastating our nation. It will be because thousands of companies are taking precautions and activating BCDR plans.
If you’re smart, you’ll have a BCDR plan for your family. Now is the time to use it. I’m not saying panic. I’m saying don’t spend your next paycheck before you get it. Because COVID-19 is a monster, and if not stopped with a vaccine or other solution soon, it will eat America’s economy for lunch.