According to the recent trade report, the global logistics industry in Q1 of 2020 has reflected a staggering trade volume growth percentage due to the ongoing COVID-19 Pandemic. As a result, the effects of the stagnant global economy has trickled down to the worldwide supply chain. Upon the losses realized, leading manufacturers and suppliers of consumer and industrial goods have taken decisive actions to realign the supply chain. Here are some challenges encountered and measures taken to solve them.
1. Air and Sea Freight Limitations
With the country on lockdown, the freight industry was the first to feel the effects of the Pandemic. On typical flights, most passenger planes usually ferry a relatively small percentage of cargo in their under-carriers. However, with all aircraft grounded and most flights canceled, the market has had to deal with supply shortages.
Some may argue that the plane cargo business has soared as traffic gets re-routed through its channels. However, even they can’t keep up with the market demand. On that same note, the tightened health inspections have only led to more delays. What about sea freights?
For the longest time, the ocean routes have been used as a cheaper alternative means of transport at the expense of timely delivery. However, even they have felt the impact of the virus as most suppliers shut down their operations. With barely anything to transport, the ever-busy ports are now serving as docking ports for many cargo liners.
2. Land Transport Takes a Hit
Even as the goods reach the destination country, they aren’t going to magically re-appear at the consumer’s doorstep. Land transport through truck drivers has also felt the impact of the Pandemic as truckers are now required to get a permit to operate as an essential services provider. There has also been an increased demand for local produce such as groceries and medical supplies that require transport.
In a bid to meet the required demand, many logistics businesses have ended up overworking the drivers. Moreover, the consumers also face delays due to the increased state border health checkups. Upon reaching their destinations, the companies that relied on drivers signing on their goods on delivery can no longer rely on the methods. This is due to the quarantine and social distancing regulations set by the government to curb the spread of the virus.
3. Closed Borders
Manufacturers dealing with shipments of raw materials from countries deemed as hot zones of the virus have had to shut down operations. Even before the Pandemic, the trade-off with suppliers from countries like China hanged in the balance. As politics set in to play as on where the virus originated from, it is almost uncertain that the situation will improve anytime soon.
As a result, most logistics companies have cut off communications with the countries in question and closed off their borders to trade. With that in mind, most countries in between the trading routes can no longer benefit from the partnerships. These were mostly in the hotel and accommodation industries.
4. Workforce and Labor Shortage
With the limited supply and demand, most companies have resorted to retrenching most of their workers to meet their operational costs. As a result, the ones lucky enough to retain their jobs have reported on clocking in at ungodly hours to meet the standards.
On that same note, the number of workers who have succumbed to the deadly virus has increased in numbers. Most health facilities have reported on most social and factory workers in quarantine following their exposure to the disease. The remaining percentage has opted to stay at home for fear of their lives. As a result, the shortage of labor supply on the manufacturing and supply level has put a strain on logistics and delivery of goods.
5. Lack of Resilience Strategies and Contingency Plans
The first cases of the virus were reported in mainland China as risk assessment protocols were put in play. Many countries had a lot of time to prepare and come up with contingency plans to stop the virus from spreading.
However, the current headlines as a result of supply chain disruption tell us a different story. Quarantine and social distancing rules can only do so much. Over 50% of the companies in the logistics industry have been compounded with supply chain blackouts with their partners. As a result, the effects on the economy as well as to the consumers have been catastrophic.
Solutions to Challenges facing the Logistics Industry due to the COVID-19 Pandemic
Now that it’s already here with us, here are some strategies laid out to solve some of these problems.
Airlines are embracing the cargo way.
Most airline companies have redesigned their passenger planes to act as cargo planes during this period. This is in a bid to keep their profits high and provide employment to some of their workers. On the same note, more cargo planes and freight operators have now introduced services that cater to small and medium freight forwarders.
Collaborative efforts by suppliers
With the shortage of suppliers, the few ones that remain have now joined forces to share some costs. For example, most manufacturers have agreed on sharing the storage costs on containers during shipments. The joined effort has seen them still in operation even with low volumes to work with.
Enforcement of mitigation and emergency strategies
The constraints facing the distribution of goods and services by most companies have now led to the adoption of “What if” strategies. Most production companies have now resorted to dual-sourcing of their raw materials, local production, or in-house strategies.
To curb its spread, most logistics companies have now resulted in the Internet of Things Warehousing facilities, Robotic systems, and artificial intelligence-powered technology platforms for customer management. Embracing e-freight services have also done their best in offering alternative market routes in a bid to curb the spread of the virus.
Human beings are resilient enough to work through most challenges thrown at them. The challenges faced by logistics companies due to the COVID-19 Pandemic are just another milestone waiting to be overcome. However, their success will depend on their contingency planning and their flexibility towards change. With that in mind, Symbia Logistics offers you customized logistics solutions in collaboration with various manufactures in different market niches. You can check out our page for all your logistics needs.