The Coronavirus outbreak has had an unprecedented effect on logistics services and global supply chains. The virus directly impacted this sector because it involves moving high volumes of goods around the globe. Since the virus originated in China, the epicenter of global trade, the effects were felt immediately.
Within months of the first known outbreak of the virus, a global pandemic was declared. Governments urged logistics companies to play a role in distributing emergency medical equipment around the world. While this was necessary, it created further setbacks to the logistics and transportation industries.
Blank sailings have increased significantly for all major shipping companies. Despite the initial and on-going difficulties, logistics services are making concerted efforts to offer reliable alternative solutions.
How Important is Logistics to the Global Economy?
Global transportation and logistics play an integral role in the modern, interconnected society that we live in. Cheap goods, speedy delivery services, and eCommerce growth are reliant on a highly functioning international logistics industry.
One of the major COVID-19 effects has been travel restrictions and border closures. With limited travel possibilities, international transport has been difficult.
There has been an estimated 6.1% decrease in gross value added by the global logistics industry. This decline has been felt more severely in different countries. While China experienced a 0.9% decline, Italy had a more severe decrease of 18.1%.
All aspects of logistics are feeling the effects of the pandemic. In addition to ocean freight, freight forwarding is suffering. The market is projected to reduce by 7.5%. In the United States, the rail traffic reported over 25% fewer carloads in April 2020 than the previous year.
While these short-term statistics are expected during a global pandemic, the long-term effects are still unclear.
What Logistics Services are Doing to Combat the Coronavirus
Logistics companies were forced to act fast to mount an effective response to the Coronavirus pandemic. Here are some key developments.
Establishing More Comprehensive Services
Successful logistics has traditionally involved key business relationships to get goods from the source to the buyer. In many cases, large logistics organizations worked with local companies to handle the last stage of shipping.
Because many local companies ceased to operate during the pandemic, logistics businesses worked toward establishing more comprehensive, end-to-end services.
Prioritizing Most Important Trade Lanes and Markets
Logistics providers are prioritizing the most profitable trade lanes and markets in the current climate. This allows them to focus on core customers and maximize shipping volume.
Working with Government Agencies
Logistics services have had to work closely with government agencies to create policies and procedures that allowed for the safe distribution of goods internationally. This has been critical with regard to keeping food and medical supply chains open.
Investment in Technology
Automation and technology reduce human interaction and involvement in logistics operations. Logistics services are looking to technology to play a bigger part in their future.
With the vaccine now being rolled out globally, we are hoping for a more sustainable future in logistics, with far fewer disruptions to the supply chain. However, this process will take time, meaning irregularities and precautions are still commonplace.
If you have any queries about international shipping in the current climate, contact Asiana USA. As a world-class transport organization, we can provide the help you need. Contact us at (855) 500-1808 to learn how we can help you with your business goals.