Challenges Facing the Logistics Industry

Posted by Erika

Though no one can truly predict the exact consequences the pandemic, organizations might begin to see impacts across the supply chain, including materials, labor, and logistics.

READ MORE about how COVID-19 has affected supply chains.

The logistics industry has always helped global trade and acted as a fundamental lever of global commerce and economy. But now many companies, especially consumer businesses, looking to revive their revenue will need to effectively leverage the logistics industry to cater to the new consumer behavior. READ MORE about how COVID-19 is changing consumer behavior.

With the lockdown in full effect across the globe and only parts of it open for business, the logistics industry on the whole is experiencing very turbulent times…

A decrease in production, as well as demand (barring essentials), has seen reduced cargo shipments across the world. As a result, many container carriers are also at risk of bankruptcy with contractual payments on hold due to force majeure, a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance occurs beyond the control of the parties.

­This is also affecting small scale suppliers who are suffering due to retailers and wholesalers multiplying their cancellations, factoring in the reduction in demand and existing inventory on hand. Similarly, when production does pick-up post the lockdown, suppliers are expected to not be able to match up to the scale of production due to simultaneous spikes in production across the world.

Since the outbreak, more than one in three of consumers admit to either beginning or increasing our online grocery shopping. As consumers are increasing their online grocery orders, suppliers are lacking infrastructure with regards to cold storage.

As cities slowly reopen with the rollout of the vaccine, it is unknown whether this trend will continue to increase or fade away over time. READ MORE about the way forward for the industry as a whole.

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