How is COVID-19 Shaping the Logistics Industry

Corona Virus Parcel

The COVID-19 Pandemic that has swept the globe in the first half of 2020 has had a huge impact on businesses, their operations and planning. The logistics, warehousing and distribution services have not been spared from these shifts in the mindset of business operations.

During the lockdown, when airports, sea ports were closed, or operating with limited staff, restricted movements made delivery and pickups difficult, maybe companies lost sight of where in the supply chain their goods were. Shipments were stuck in ports, warehouses and distribution facilities across the worldwide network of logistics channels.

Many manufacturing industries practice a “just in time” lean manufacturing process, minimizing warehousing needs, parts on shelves. With a slick supply chain and logistics operation you can have new parts arriving just in time for the in house supply to run out. This fell apart during the COVID-19 pandemic, as new supplies failed to arrive on time, there was a shift from just in time to “just in case” manufacturing.

The Pandemic has had a positive impact in some ways also, it has forced companies to adopt new changes, and accelerated the transformation and digitising of the manufacturing, warehousing and logistics industry. It has also changed the way the logistics industry has been viewed. No longer is it only the moving around of packages, but it has been recognized as an integral part of the business continuity plan. Ensuring the supply chain, and smooth movement of goods is vital. So much so it is even shaping sales and marketing decisions some companies are taking.

Pre COVID-19 many companies were heavily reliant on Chinese manufacturing as an integral part of their supply chain. There was already an ongoing change in this strategy as many businesses realized the exposure of having all their eggs in the China basket. In recent years, increased risks of trade wars, nationalism and protectionism, as well as human rights issues, had led some companies to begin planning alternatives. The COVID-19 pandemic merely exacerbated the issue and has further pushed companies to rethink their supply chain strategies.

Over the past decade, the discussion of optimizing supply chains has mostly revolved around costs, how to improve efficiency and save money. Tis is changing, businesses must now also consider resiliency in their future planning. How resilient are your business and its operations when faced with a global pandemic. The uncertainty as to the future, the potential for a second wave mean that business continuity planning must consider how resilient their supply chain is, but also how agile it is. The ability to switch suppliers quickly, or shift production, re-routing goods and materials to different warehouses and hubs, but then the ability to switch back when the situation changes.

In a recent survey, 42% of respondents said that post COVID-19 they expected companies to make significant changes in their logistics and supply chain operations. 67% said they would make these changes through investing in technology. These technology investments include systems that allow workers to continue to work from home, even after restrictions are lifted. Automating processes allowing the staff work on higher level projects and cutting costs through getting rid of unnecessary office space. This even lessens the need to re-hire even when demand returns after the crisis is over.

2 thoughts on “How is COVID-19 Shaping the Logistics Industry

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to Warehouse TechKeep up to date with the latest news from the warehouse and logistics industry