If we look at the stats from 2019, the global logistics industry went through several ups and downs, due to geopolitical uncertainties, trade disputes, a stagnant global economy, and environmental regulations.
Now, in 2020, the coronavirus outbreak has created further difficulties for the world at large.
The Coronavirus pandemic isn’t only posing a threat to human health; at the same time, it is endangering our global economy.
The global financial crisis we are currently facing during this pandemic, is negatively impacting the supply chain and trade sector.
The container movement in the transpacific and transatlantic trade lanes has diminished to a large extent due to the Covid-19 crisis.
Manufacturing units in China are shut down, and the sudden recession conditions are creating trade issues in Europe and North America alike.
There is now an extensive backlog of port order. The pandemic has created an unbearable supply shock throughout the global markets and is leading to a major disruption in the supply chain.
The situation is almost the same devastating as the shock suffered by the logistics industry during the global financial crisis during 2008.
Global production logistics leading to deglobalization:
The global maritime industry has also taken a hit, due to the impact of Covid-19.
With less confidence in the manufacturing sector, less availability of raw materials, and low demands for commodities the transportation industry faces further uncertainty about what lies ahead.
Governments around the world have announced strict preventive measures to deal with the covid-19 outbreak, but logistics operators wonder if it’s enough to protect their industry from further degradation.
The dramatic halt in the Chinese supply chain has created a catastrophic ripple effect across global markets. Cargo volume has significantly reduced in Chinese ports, and domestic road freight supply chains are also suffering bottlenecks.
Usually, many industries are greatly dependent on Chinese supply chains for finished and intermediate products, therefore, Governments across the world are being forced to reassess their home-grown manufacturing industries.
Reports reveal that China hosts almost two-thirds of the world’s ten busiest ports, and meeting almost 40% of the maritime trade demands.
The shutdown of the economy has now created a shortage of supplies, putting greater strain on logistics companies.
Unfortunately, it is difficult to estimate how long this trend of uncertain market conditions will continue.
If this pandemic sustains, logistics companies will have to reassess their international business relations, trade and markets, having to rely on national operations instead, which may be highly competitive.
Even the companies with good credit records and healthy balance sheets are now finding it difficult to manage the condition of reduced inventories, reduced purchase levels and lengthened payments.
The suppliers are now short of funds and products are becoming harder to deal with across the board.
Most companies are now highly dependent on their banks and insurance companies to manage working capital, receivables, inventories and production.
The management of loans, payrolls and raw purchases have become a critical matter of concern for operators.
Workforce shortages and border closures impact logistics industries:
In order to control the spread of Covid-19, most countries have locked down their borders.
With states across the world following high-security measures, permitting vehicles very limited movement and access.
This issues has become a nightmare for road transportation and distribution service providers.
At the same time, the labour shortage on the terminal hubs and ports has created further challenges for the logistics industry.
As people are being told to ‘stay at home’, the situation presented by this pandemic has seen a surge in online grocery orders.
But limited transport capacity and resources are making it difficult to serve all distribution channels.
The challenges are intensifying with the panic purchase behaviour of buyers. Numerous countries around the world are suffering with supply shortages.
Additionally, with an increasing number of Covid-19 infected patients around the world, the demand for pharmaceutical drugs has skyrocketed.
With respiratory equipment becoming a major requirement at hospitals.
The demand for medical services, pharmaceutical goods, and medical devices continues to rise, governments and health care service providers are now finding it difficult to serve the rising number of patients, due to a lack of critical medical supplies.
With healthcare contractors now looking for new logistics service providers to bear the load of distribution. Efficient logistics companies can grab this opportunity to serve demands.
But at the same time, they need to get an active workforce to handle the fulfilment process.
The shortage of labour and space constraints have become a big issue for the medical industry, among many other industries.
Reliable planning to deal with the crisis:
The coronavirus outbreak proves how delicate the logistics industry really is.
The rising demands for emergency services has made it hard to ensure the proper flow of essential supplies.
During this difficult time, logistics companies need to focus on process flexibility, end to end visibility, agility, and collaboration so that customers can stay satisfied and crucial medical needs can be met.
One of the most trustworthy solutions in the current pandemic scenario is TMS (Transport Management System) software; it can help you to maintain higher transparency in services and boost logistics productivity.
With this new age logistics management software tool, it becomes easier to track the location of all trucks that are carrying supplies.
It means companies can manage their inventory and shipping as well. The adoption of IoT powered warehouse management systems and distribution operations can make logistics facilities more accurate and reliable.
Additionally, by employing TMS software, logistics companies can better organise their staff, fleets and security during an increasingly difficult time.
Such software will help to manage the rising demands due to the pandemic.
Although the world at large is in the midst of a major financial meltdown, there is still some light to be found during these times, by allowing key logistics management tools to help support your business and help ease the pressure of a challenging time.
Author Bio: I’m Jaylin: SEO Expert of Leelija Web Solutions. I am a content manager, and the author of freeopenbook.com and a full time blogger.
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