At the start of 2020, the world may have been looking at what new developments or increases we may have seen in the global shipping industry over 2020. Instead, the industry has to assess how it can recover from the Coronavirus crisis that stopped global trade temporarily.
Before COVID-19, China and the United States, two of the world’s major trade partners, had been at a trade war, straining trade relations. 2020 offers new challenges for the shipping industry, as it finds new ways to adapt to interrupted supply chains.
Where We Stand Now
The global impact of COVID-19 has major effects on logistics and supply chains at every level. With priority being given to essential items such as food, medical supplies, and some raw materials, many parts of the industry have grinded to a halt.
Given that some areas of the logistics industry had suffered a downturn as a result of the China-U.S. trade war, there are justifiable concerns that this global pandemic may force some businesses into bankruptcy.
Another effect of the current crisis is that we are seeing rising prices at every stage of the supply chain. With many consumers panic buying, goods are in greater demand and producers are struggling to meet orders. In the U.K., sales of pasta rose by over 168% in a single week, and the knock on effect of that is that costs at each stage are rising, from the raw materials (durum wheat) through to the price on supermarket shelves.
What Can You Do?
When facing interruptions in your supply chain due to factors out of your control, there are a number of steps you can take to mitigate the downturn in business and breaks in your supply chain.
- Keep in touch with your suppliers and customers. Look at where your goods are originating from and if there are issues there. If so, approach alternate vendors that may be closer to you, or offer a more direct trade route.
- Evaluate switching to different delivery options. Air freight may be a good alternative if oceans carriers are delayed. Look for options to switch to ocean shipping for international cargo or to road or rail transport for shipments within the U.S.
- Increase communication levels. Talk to every link in your supply chain at least once a day. This is not just about providing a positive customer experience but about sharing information.
- Monitor information. This covers every reliable information source available from industry-specific sites through to organizations that manage global crises.
- Look after your staff. Issue daily bulletins to apprise them of the situation. Where possible, allow staff such as admin, HR, and accounting, to work from home. Ensure that essential staff are equipped with the appropriate safety equipment and that hygiene and safety processes are in place. Where possible, especially in communal areas, have your staff maintain social distancing.
- Keep track of the latest information from carriers.
- Plan ahead. Develop strategies to prevent heavy strains of your business in case of interruptions.
- Entertain new ways of doing business, new technologies you can integrate into current processes, and identify new opportunities and partners.
The Second Half 2020
While much of the first half of 2020 has been dominated by news of COVID-19 and its effect on the economic systems of the world, the second half may present a more solution-oriented approach. As operations begin to resume, the shipping world will adopt new strategies, regulations, and supply chains to rebuild and restore trade systems. Fuel costs saw a reduction in the first part of the year, encouraging trucks, ocean carriers, and air freight carriers to continue moving cargo more cost-effectively.
The second half of 2020 will see a strong global response to recover from the interruptions in shipping and commerce that began the year. Fuel and oil prices will accommodate continued trade, making up of lost time.
Economies and trade partners may look at more sustainable approaches to shipping and optimizing trade routes further. We also may see a change in the consumption habits of many people around the world, which will also affect global shipping trends.
The logistics industry is facing a tremendous challenge in 2020 that it will have to learn to adapt to. Finding ways to ensure that essential goods such as food and medical supplies can continue in a crisis, supporting companies who have to deal with sudden change, or finding local vendors to source materials from are all challenges the logistics industry is prepared to address.
At Asiana USA, we are constantly finding new ways to support supply chains. We value daily communication with all our offices, customers, and partners around the world so we can continue to provide efficient solutions. If you have any questions about our logistics services, then please give us a call at (855)-500-1808.