At the beginning of the second quarter of 2020, the COVID-19 pandemic swept across the globe at lightning speed, leaving no country untouched in its wake.
Aside from the impact on public health, the resulting lockdowns, travel restrictions, and subsequent disruption to supply and demand had a significant impact on businesses, with the logistics industry being no exception.
The pandemic’s arrival on their doorstep meant an immediate need to adapt. With a massive disruption to both supply and demand across the board and across every country, logistical chains around the world were impacted in the following ways:
Shipping routes were disrupted with restrictions on travel both on the high seas and air travel. This led to an immediate need to adapt by manufacturers and retailers alike who needed to re-route their products via land, sea, or air.
The Shanghai International Port Group was one of many port operators around the world that immediately halted international shipments until they could figure out how to best safely handle the increased volume.
Because of shortages in shipping capacity and workforce in ports and warehouses, many manufacturers also found themselves either with excess products, a lack of material, or both.
Today, even with economies beginning to show signs of recovery, the world is in the middle of a shipping crisis. A pandemic-triggered global shortfall of shipping containers has caused bottlenecks in shipping, with its effects ripping up and down the supply chain: raised prices of finished goods and raw materials, as well as production and delivery delays.
Analysts claim that it will take many years for the shipping industry to return to pre-pandemic activity levels.
The situation hasn’t been much better for the overland transportation of goods.
The U.S Transportation Department estimated that the pandemic would have a profound effect on trucking, with nearly two million drivers unable to complete their routes due to suppliers and retailers being unable to receive or deliver goods.
In April 2020, more than 88,000 people lost their jobs in the U.S. trucking industry. The economic slowdown meant fewer goods to transport, which meant fewer trucking jobs. But this also led to what was left of the trucking industry being stretched very thin.
In addition, a large part of the trucking workforce is 45 to 60 years old, which is particularly at risk for contracting the virus. This led to even more labor shortages.
China experienced a severe shortage of diesel fuel and other vital trucking components, which led to delays in the transport of goods and increased prices for the largest exporter in the world.
Since then, governments around the world have tried to start their economies up again, and the trucking industry is showing signs of recovery. For example, in France, where trucking jobs were down 18% in the first quarter of 2020 compared to the same time last year, job numbers are starting to rebound, with an increase of over 6% in April 2020 compared to the previous year.
Warehousing and Logistical Centers
With many employees getting sick or being affected by lockdowns and restrictions on manpower because of social distancing requirements, warehouses and logistical centers around the world found themselves in dire straits.
They needed to find ways to be more automated and use fewer man-hours in order to keep their operations going. In Singapore, for example, automated warehouse systems have been implemented so that goods can be moved from automated conveyor belts to automated storage and retrieval systems, allowing fewer workers to operate the warehouse effectively. Driverless forklifts, sorting and storage/retrieval with robots, and automated sorting systems with conveyor belts became more commonplace in logistical centers.
While large companies like Amazon have always used automation to operate at their scale, it has become more commonplace in mid-sized and smaller operations as well.
Today, automated warehouses and automated transportation systems are the future of supply chains around the world. The pandemic has shown that if we want to continue to have a working economy, logistics must be as automated as possible not to increase costs or delay shipments and withstand future disruptions.
Society was forced to adapt to the pandemic, and logistics is an area that was greatly influenced by the pandemic. There were once massive layoffs in this industry, but now it is slowly recovering and adapting to the situation.
How long the recovery will take before we are back to pre-pandemic levels of activity will depend on how quickly the spread of the virus can be slowed down and how quickly governments and businesses can bounce back.