A supply chain is the backbone of an organization and logistics is one of the important segments. Logistic services is a great partner of traders globally. It allows many industries to ship their products and services to their consumers.
The pandemic has impacted the logistics industry worldwide in a manner that no one could ever have thought of. The pandemic period cause businesses to shut down. It impacted greatly on the logistics industry, as many countries went under strict lockdown. Almost every country stop their trade with other Countries.
Threat for some, and opportunities for others
However, you know when something bad happens it creates difficulties for ones and provides opportunities for others. During these difficult times, we saw that many consumers were shopping online. Due to boom in e-business, products are going into the hands of the customers through delivery which create a big opportunity for the logistic industry to earn more from this time.
But it still has a huge negative impact in the field of petroleum, construction, and production sector. There is an extreme reduction in the demands, it is due to many factors.
Current Challenges for logistics
There is a strict lockdown going on in some countries. Due to the closure of many businesses in many countries, for instance, in America, Canada, UK, etc., there is a decrease in the production of goods, and now services of express shipping Singapore as well as in other countries are facing struggles to gather data and make serious assumptions about the risks and potentials.
Even logistics companies are shutting down or are at risk of bankruptcy. As the payments are on hold by most of the businesses.
Small suppliers are now facing the bullwhip impact. As many retailers and wholesalers are now canceling their contracts with logistics companies. Airlines are also not operating due to the shortage of passengers.
Lack of PPEs also put the logistics industry at risk as companies failed to provide safety to their employees. These are the challenges, which we highlighted, logistic firms are facing.
More Inventory on Hand
Businesses have to move their inventories as fast as they can. So that they don’t have to pay for holding excessive inventory. Before the pandemic breakout, manufacturing companies have estimated results of how much they have produced. Also, how much they have stored to meet the demands of customers. However, it all turned out to be a nightmare in terms of holding inventory.
You must have experienced in your business that how important inventory management is. But it also creates problems when you hold more than your capacity, also in situations like this it becomes worse. Some inventory gets waste by the manufacturing side due to holding excessive inventory.
Unexpected from expected
This situation was even worse for food items as they need cold storage. And due to the current situation, the shortage of cold chain storage has begun. Results in, foods and dairy products to get spoil, waste or damage as they are perishable and not stored properly.
This is why logistic firms get an impact by the pandemic, and as businesses are also not operating. Many companies are just selling their remaining inventory. Now you have to manage the inventory accordingly as the situation is going towards the betterment.Businesses have to move their inventories as fast as they can. So that they don’t have to pay for holding excessive inventory. Before the pandemic breakout, manufacturing companies have estimated results of how much they have to produced. Also, how much they have to store to meet the demands of customers. But it all turned out to be a nightmare in terms of holding inventory.
You experienced in your business how important inventory management is, but it also creates problems when you hold more than your capacity, also within situations like this it becomes worse. This lean tactic during Covid-19 left the excessive inventory for manufacturers which somehow spoiled or wasted as they were delivered to the customers.
This situation was even worse for food items as they need cold storage, due to the current situation the shortage of cold chain storage has begun. As well all know that foods and dairy products are all perishable items, and they are easily get spoiled, wasted or damaged if they are not stored properly.
That is why the logistics is so affected due to covid as companies are now shutting down or reducing their productions, Many companies are just selling their remaining inventory. Now you have to manage the inventory accordingly as the situation is going towards betterment.
Local exporters were left halfway
Around the world the exports have decreased, due to changing financial situations of people. For this reason which include many other aspects, the local exporters are left in limbo, that is creating problems for them both personally and financially.
Singapore in pandemic
In Singapore, which is considered the hub of the supply chain or logistics, pandemics also greatly impact courier companies who deliver parcels, goods, and manufactured products from companies to consumers. Local exporters are facing many hurdles. And faced difficulties in financial terms that they cannot even cope with in situations like this.
The pandemic has left them helpless, they cannot do anything until the pandemic is over, or there is an ease in lockdown in such countries around the world. Govt. of respective countries need to do something, as this is in the benefit of the country itself.
Role of Government in this critical situation
Governments in Singapore or your governments anywhere in the world need to provide incentives and relief, so that they can do business with their current capacity. Leaving the exporters halfway is not the solution to this problem.
Fluctuating Demand
At the start of this pandemic or when it was at its peak, the purchasing power of consumers was reduced. That is why there was a slow demand for the products of any type. Due to the slow growth, the companies had shut down their operations entirely or some went bankrupt, as there was no demand at all, or they couldn’t meet because of some factors involved in it.
E-commerce role in pandemic
You see that the consumers are now shifting towards an online purchasing, even you may have bought something for yourself online. E-commerce sales are booming, as everything has been purchasing online, this also creates positive impact on logistics to deliver local products to the local consumers, but due to the increase in demand, logistic companies are not able to meet that demand.
Companies have to move with the flow in these severe situations, but if they fail, then they cannot step up after the pandemic is over. Through careful planning and strategies, logistics companies can do a lot better and take advantage of this boom in E-commerce industry.
What Needs to be Done?
The pandemic left us in the worst scenarios the world has ever witnessed. Every industry has been impacted, and there is a huge need to do something before the crises grow even stronger. While we are looking at the revival of the economy and industries, at the same time we also have to consider the fact that after the pandemic will over, there will be a huge requirement of materials that will fill this gap.
Industry experts, organizations, and governments need to take steps that must be overwhelming at the time of revival. They need to analyze the situation and act accordingly. The expert’s help is better. Experts should come from various fields such as economists, logistics experts and government representatives who can sit together and find the solutions of the current problem.
Logistics companies can get the idea from many governments as they are lifting restrictions not once but in phases, the similar approach can be helpful in the revival of logistics, and bring the demand back steadily and gradually.
Conclusion
Covid-19 has impacted many businesses around the world, and logistics is no different. As of now, the situation is becoming better and under control. It is the time that we should take the correct measures with many factors in mind. One important lesson taht pandemic has taught us is that there is less usage of technology in these situations as said by Biju Kewalram, and we quoted that “Technology does not make useful itself, we make technology useful”.
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