For the past several years, the logistics sector has been growing rapidly worldwide. With the advancements in technologies, the supply chain is being revolutionised by the day. With top logisitics companies performing flawlessly deliver goods to across the world, serving international markets. However, the Covid-19 crisis has changed the landscape, forcing logistics operators to reassess their business models and strategies. Experts say that the economic losses incurred due to this pandemic may destroy the growth in the logistics arena, built over the last ten years. Making it increasingly difficult to achieve those previous levels of international productivity. Think tanks and thoughts leaders alike are now joining forces and doing their best to devise strategies to ensure the transport and logistics sector doesn’t fall a part during and after this pandemic.
As per earlier predictions, the market size for the logistics sector was expected to grow up to $215 billion by the end of 2020. It was logging an amazing growth of 10.5% compounded annual growth rate after 2017. It is important to mention that the logistics sector earned the status of ‘infrastructure’ in 2017. At that time, its market size was estimated to be somewhere around $160 billion. However, the coronavirus crisis has significantly changed global logistics operations, and now small-scale industries are finding it hard to sustain themselves in this pressure-cooker of a market. Meaning, global economic losses have posed a serious threat to logistics companies.
Investors and business owners in the logistics and manufacturing sectors are now keen to assess how long the current scenario will go on. Both these industries need to make hard decisions to promptly recover from this outbreak. Estimations suggest that it may take many years again for business to bounce back to their original growth levels, if, in fact, it’s even possible.
As the Covid-19 pandemic continues to spread, people are locked inside their homes, and the governments around the world have implement serious national and international travel restrcitions. In this scenario, both local and global logistics companies are facing a wide range of difficulties. The issues include a shortage of labor, road closures, struggle in ramping up the manufacturing capacity, financial crisis, amoung others. Both long and short-term implications of these challenges will undoubtedly leave the logistics sector in a difficult position moving into 2021 and beyond. At present, we can see that logistics companies in the United States are greatly affected by this pandemic. They are not able to find drivers for the supply trucks, and lack of labor is causing trouble in loading and unloading stock. Suppliers and retailers are also finding it difficult to get products to the stores.
Lack of resources and restricted movements may challenge business sustainability
According to professionals, the lockdown has created a grinding halt to the entire domestic supply chain. The supply is greatly jeopardized from the factory outlet to the warehouses and then to the end-users. As most of the countries around the world announced lockdown, the import-export movements are greatly affected. With this, the cost of business management will rise for small ventures. The prices of petrol and diesel are also rising in most countries as the government needs to shore up some revenue to continue to handle the crisis Covid-19 is putting forward.
When the foot traffic is falling down in the city streets, people are now more dependent on online shopping and shipping. But to achieve the rising demands, the logistics service providers need to prepare themselves to sufficiently meet these challenges. As the lockdown has created a shortage of labor in companies, deliveries have been disrupted. Furthermore, the lockdown of other supporting services and businesses has made the situation more difficult. Public transportation facilities are also restricted, and due to this, workers need to reach workplaces on foot. Those who are residing on the outskirts of cities are exhausted, which leads to lower productivity levels.
This crisis has reduced the gains of logistics companies all over the world. Operators in this sector are now finding it difficult to maintain operational costs. If this situation of crisis grows further, the companies may not be able to recover these losses in the long run. Although the big brands may find some strategies to rise with time, small businesses are mostly dependent on government hand-outs, insurance and banks, as they need additional monetary support to keep afloat.
Manage logistics with advanced software tools
In order to sustain the logistics market, companies and supply chain operators need to consider supporting themselves with the latest logisitics software and technologies. The best idea is to utilize warehouse software to handle the inventory and the shipping. It may help business owners to maintain a track of all the movements and streamline all of their data to better serve themselves and their clients. Even if you are looking for new suppliers due to lockdown in most of the areas, the software tools may help you to maintain information online.
It is good to train your teams to work with warehouse software to ensure higher productivity. These tools may reduce manual workload while avoiding errors in the processing. The best part is that it may help you to save time and money on supply chain management. Moreover, these software tools are least expensive to install and maintain in the long run. When the growth of the logistics industry is surged due to crises, these software may promise a sound solution for long term sustainability.
No one is clear when the coronavirus crisis will end, as cases are increasing in most countries. Meaning, all business owners need to plan for the long term in order to deal with the financial losses they may incur due to the pandemic. Logisitics operators will need to prepare for a slow growth rate for the coming ten years. But the great news is that strategic planning may help you to maintain stability and better adjust to this changing world.