How Logistics Companies Are Coping With Covid-19

When you say the word “Covid-19” in the logistics companies, most freight forwarders reactions would be very similar (use your imagination here). Why? The pandemic has impacted the transportation industry tremendously by affecting the flow of goods, storage, cargo and freight prices… I would be pulling a funny face too, wouldn’t you?

Ocean freight saw the total container volumes handled at Chinese ports drop by 10.1 percent which in return, had a huge impact on ocean freight around the world. However, unlike ocean and air transport, land transport has generally remained partially available globally as roads have remained in operation.

Global Trucking has seen increased demand due to increased food and medical supply transportation—combined with reduced employee availability (due to COVID-19-related restrictions), leading to higher rates and bigger delays. Finally, as shippers and governments turn to air cargo for essential goods, air freight rates have increased as some carriers are seeing delays with increased congestion at airports.

Challenges were increased even further when lockdowns were introduced due to Covid-19. Managing Director of Across the Ocean Shipping, David Aherne, can relate to this as he states, “due to reduced air and ocean freight capacity, rates and transit times have increased dramatically over the last twelve months. We have had to adopt a range of responses to overcome these uncertainties through concentrating on clear real time communication with our clients, adding value add tools such as 24/7 online tracking, all while keeping overheads under control. I am very proud of the way my team pulled together and continue to support each other during this time”.

Like Across the Ocean Shipping, the impact of COVID-19 on the Australian freight and logistics industry has forced operators to change the way they conduct business in order to cope with increased demand. Whilst e-commerce deliveries were increasing prior to COVID-19, the pandemic has only accelerated this trend as Australians rush to purchase goods online. Lack of technology and burden of adhering to preventive measures have led to collapse of the small trucking logistics firms. As per the IMF report, the effect of the pandemic is expected to cast an exaggerated impact with 3% contraction in global economy. The expected downfall in the economy will be a blow to the industry demand for logistics, manufacturing, and the demand for the goods. Supply chain disruptions have led to delay in deliveries, traffics, surge pricing etc. However, the impact is volatile and unequal as ecommerce shipping at intra-region level has seen upward shift with increase in online transactions while those which facilitated through offline networks have taken a setback.

Future Outlook

On a much more positive note, recent trade data is signaling that the global economy is springing back from the effects of the pandemic faster and harder than anticipated: $US1.9 trillion ($2.5 trillion) of further US stimulus provided by the Biden administration’s new fiscal package — supports the more optimistic view of the prospects for the global economy (and Australia’s economy) depicted in the OECD’s latest forecasts issued this week, which have upgraded the outlook for global growth this year from 4.2 per cent to 5.6 per cent.

2021: Onwards and Upwards for the Logistics Industry!