COVID-19 pandemic has affected businesses worldwide, and the transportation industry is no exception. The impact has interrupted global supply chains and reduced the production delivery of goods in many industries and sectors. The local supply chain has made it very challenging to get food and medical supplies to those who need them. Logistics companies involved in the movement, storage, and distribution of goods have been seriously affected. The supply chain disruptions have directly impacted the competitiveness, economic growth, and job creation in the entire transportation industry, and the logistics firms seem to be the most affected.
THE IMPACT OF COVID-19 ON LOGISTICS
Logistics companies connect businesses to the local and international markets by providing transportation, freight forwarding, warehousing, distribution, etc. The role of Logistics companies in the global value chains is vital. It requires resilience and efficiency to enable them to deliver their service both at the local and international levels. In the wake of the Covid-19 pandemic, disruptions in manufacturing crippled global supply chains. Third-party logistics companies have provided services and solutions that have enhanced and contributed to productivity and economic development.
There are constraints to sea freight impacting importers and exporters around the world. Demands have weakened. It’s seriously affecting major ocean freight routes in Asia and Europe, the United States, and Latin America.
Although transportation by land has remained partially available globally, trucking capacity is limited in countries with severe lockdowns. There is a drastic reduction in employee availability due to COVID-19-related restrictions. Freight rates are high, and transit time for trucks has become longer.
Since March 2020, the volumes of flights that carry freight as belly cargo fell drastically due to the reduction in passenger flights. Major shipping companies and governments turned to air cargo for essential goods, which led to increased air freight rates, delays, and congestion at airports.
THE RESPONSE TO THE CRISIS
Governments have responded to the crisis, especially in most border areas. Ports, shipping, and trucking are exempt from lockdown measures. They’re now essential services with cargo moving through ports. The supply chains and transportation of essential commodities are exempt from lockdown rules. Most airports are closed to passenger flights but still open to cargo.
Third-party logistics companies in the bid to ensure continued movement, storage, and flow of goods have adopted a range of responses to the impact of the Covid-19 pandemic on trade and commerce. The uncertainties and disruptions caused by Covid-19 require:
Better safety protocols – The safety of staff’s health is paramount. Companies have introduced social distancing at warehouses, disinfecting work areas, protective gear, and other safety protocols. Although these measures come at a higher financial cost, strict adherence to covid-19 protocols is the best option.
Updated service offering suitable to the current demand- Third-party logistics companies should adapt to current demands like warehousing, order fulfillment, and grocery deliveries due to the high demand for essential products. There should also be a consideration for robotic and no-contact delivery options
Alternative transportation method- Many companies are thinking outside the box and using alternative transportation methods. Since fewer passengers’ flights have led to limited airplane belly cargo capacity, big logistics companies have adopted the use of charter flights to transport shipments.
The Covid-19 pandemic has impacted the logistics and transportation industry. The recovery will require more dedicated capacity, a tech-driven revolution, and more diversified and resilient solutions. BC Warehouse and Distribution Company offer third-party logistics services to help businesses weather the storm, recover, and forge ahead.