Globally, activities along every facet of life and sectors slowed to a painful stroll when the menacing impact of the COVID-19 pandemic caught us off-guard. The impact of the virus left many organisation grappling for survival and the freighting and logistics industry were not left out of the murky scenes.
Logistics firms, which are involved in the movement, storage and flow of goods, have been directly affected by the COVID-19 pandemic. As an integral part of value chains, both within and across international borders, logistics firms facilitate trade and commerce and help businesses get their products to customers. Supply chain disruptions to the sector caused by the pandemic could, therefore, impact competitiveness, economic growth and job creation.
Logistics companies connect firms to markets by providing various services, including multi-modal transportation, freight forwarding, warehousing, and inventory management. They are important for global manufacturing, which is complex and multi-locational.
Disruptions to manufacturing in China rippled throughout global supply chains. Cargo was backlogged at China’s major ports, travel restrictions led to a shortage of truck drivers to pick up containers, and ocean carriers cancelled sailings. The resulting shortage of components from China impacted manufacturing operations overseas.
Major industries around the world including automotive, electronics, pharmaceuticals, medical equipment and supplies, as well as consumer goods, were affected. Although manufacturing picked back up by end of February, about 70 percent of large industries had restarted operation; a return to full production capacity is unlikely in the short term because of the spread of the pandemic to China’s trading partners.
With hopes that life will return to normal sooner rather than later, some changes are here to stay, many relating to delivery and product availability. An efficient, lean and profitable supply chain is about being proactive rather than reactive, forcing many businesses to re-calibrate their logistics in 2021 and beyond.
Supply chains must be evaluated for efficiency. Companies need to seek out more streamlined and cost-effective ways to continue delivering on customer expectations for the long term. As logistics companies reflect and begin planning for the future, there’s a lot to consider. A thorough analysis of the supply chain in its entirety is crucial. The price of this inspection is minimal when compared to the cost of damage created by an unfixed vulnerability. Risk and contingency planning is more important than ever. While no one could have predicted the pandemic, many of the reasons that supply chains suffered (including lack of supply, loss of staff, and inventory bottlenecks) could potentially have been avoided, or at least mitigated.
Finally, it’s crucial to consider how you deploy inventory to allow for optimal servicing of customers, while mitigating situations where backup stock levels aren’t available. If there’s demand, there needs to be supply.