Impact of COVID – 19 Pandemic on the Logistics Industry

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Impact of COVID – 19 Pandemic on the Logistics Industry

ogistics firms, which are involved in the movement, storage, and flow of goods, have been directly affected by the COVID-19 pandemic. As the pandemic spread to the rest of the world, it led to lockdowns and border closures – this aspect restricted the movement of goods. Additional protocols such as social distancing created bottlenecks for logistics / project forwarding services.

Supply chain disruptions caused by the pandemic have impacted the operations, competitiveness, and economic growth in this sector. It has led to delivery delays, congestion, and higher freight rates.

Challenges encountered by logistics companies:

Air Freight Forwarding Services

Volumes fell by 30-50 percent in March 2020 due to a sharp reduction in passenger flights (which carry freight as belly cargo). With all aircraft grounded and most flights canceled, the market had to deal with supply shortages. On that same note, the tightened health inspections have only led to more delays.

Ocean Freight Forwarding Services

The ocean route which is considered the cheapest alternative means of transport has also felt the impact of the virus. Most shipping lines have inventory issues with lot of delayed bookings,high unexpected charges & roll overs.Imports from China has reduced drastically putting major pressure on export inventory Ex-India as well.Transit ports like Colombo,Singapore have great embargos which delays shipments futher.Suez Canal incident has added to the fire as well.

  • Land Freight:
    Globally the roads have remained in operation, except in countries where there are severe lockdowns. As a result, ground transportation services have remained partially available, unlike ocean and air transport. However, due to reduced employee availability and an increase in demand for essential services— like food and medical supply transportation, other economic essentials that require land transport, such as manufacturing, are generally not at full capacity - mainly because of the restrictions and lockdown.
  • Workforce and Labor:
    With increased state/country border health checkups and restrictions, vehicle drivers and other transportation staff are now required to get a permit to operate. And in a bid to meet the required demand (essential goods), many logistics businesses have ended up overworking the healthy and efficient drivers/staff. While the remaining percentage who are ill or infected have been forced to stay at home to ensure everyone’s safety and wellbeing. This has resulted in a shortage of workforce and labor – which has further put a strain on logistics and delivery of goods.
  • Businesses Players - Small/ Large Companies
    Higher air cargo freight rates, delayed sailings, and longer road transit time has hit several businesses. While the full effect of the pandemic on global supply chains is not yet known, as per reports, the impact is severe for small business players. Small businesses are being severely hit because they tend not to have any recovery plan, backup, or alternate operation plan. Lack of technology, as well as tools to follow health guidelines further complicate their operations. Whereas, large companies with a diversified business (those serving different sectors, having multiple clients in various regions/countries) are in a better position to withstand the current storm.
  • Role of Warehouses During the Pandemic
    The role of warehouses will continue to evolve. While some storage is being used by other parts of the supply chain, the critical goods and materials, like ventilators, alcohol sanitizers/ face masks, will need local storage in the future as well. Logistics systems need to be capable enough in handling these huge global shifts - both in terms of consumption habits and delivery capabilities.


Strategies to Solve Some of These Problems

According to studies, the following strategies are laid out to solve some of the logistic problems.

  • Airlines to embrace the cargo way
    In order to deal with the pandemic situation, most airline companies have redesigned their passenger planes to act as cargo planes. This aspect will help the airlines keep their profits high. Moreover, it will provide employment to some of their workers.
  • Collaborative efforts
    Some suppliers have decided to share the costs. For example, most manufacturers have agreed on sharing the storage costs on containers during shipments. This joined collaborative effort will help both businesses as well the project forwarding services to stay operational - even with low volumes of work.
  • Implementation of emergency strategies
    The constraints facing by most logistics companies have now led to the adoption of "What if" strategies. Logistics companies in Mumbai and all over the globe are urging their emergency risk management team to find out ways to tackle such situations in the future.
  • Efficient use of technology
    To curb the spread of the virus, most logistics companies are now seeking tech-driven solutions. Companies are now investing in the Internet of Things (IoT), cloud computing, automation, and data analytics. So in the long run, robotics, drones, and autonomous vehicles might ease up the task of logistics services providers’, in case there is a shortage of staff/labor.
  • Safety protocols
    To protect the staff’s health, some companies have introduced safety protocols like social distancing at warehouses, disinfecting work areas, etc. Some are even investing in PPE kits and protective gear – so that employees stay safe while functioning. While these efforts, lead to higher financial costs, it can definitely help the service/business sustain for a while, instead of collapsing completely.

    Logistics companies are facing huge challenges due to the COVID-19 pandemic. However, as human beings, everyone is resilient enough to work through most challenges thrown at them. So as of now the success of logistics companies will depend on what contingency planning and strategies it uses to move forward in the game. Logistics/ project freight forwarders will need to collaborate and optimize as much as possible to operate safely, efficiently, and pre-emptively. Moreover, it will require businesses and consumers to adjust, improvise and innovate rapidly.

    New Globe Group is one such company that aims to provide effective logistic services – be it in any situation. This firm offers project forwarding services, air freight forwarding services, ocean freight forwarding services, logistics services, customs brokerage services, tracking & tracing service, consolidation services, perishable/ dangerous goods packaging services, warehousing, ground transportation services, etc. Empowered by a talented and enthusiastic pool of executives, the firm offers services in compliance with the set industry guidelines.

    If you are looking for a budget-friendly logistics service in Mumbai – look no further than New Globe Group. The team will help you meet your varied demands – be it any day.

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