Logistics Challenges in the Time of COVID-19

The logistics industry is one of many that has been thrown into a state of flux with the advent of COVID-19. As many companies transition to remote-work operations or shutter entirely, logistics is unable to do so, with the global supply chain deeply impacted but still intact. Though widespread demand still exists, it fluctuates on a daily basis, with certain industries such as protective gear and consumable food seeing an upswing and others in decline. Even so, there’s no denying that many logistics companies, particularly those in ocean freight, are on the brink just the same as their counterparts in other industries.

The challenge for logistics is twofold — keep running and keep employees safe. The usual distancing tactics don’t apply here, where employees may come into contact with numerous other people over the course of completing their deliveries. On top of that, fluctuating customer demand makes the usual puzzle of logistics even more difficult as companies struggle to adapt to trends that may not last. Some companies have adapted disaster contingency plans — originally intended for hurricanes and other natural calamities — to the COVID-19 crisis.

Beyond this, different shipping channels have reacted in different ways. Airlines are expected to receive substantial bailouts from governments, and land-based shipping has been deemed essential and is operating more or less as normal. In contrast, ocean freight companies can’t rely on government funding and must fend for themselves in the face of reduced demand. Larger companies are able to hold ships in storage, but smaller organizations are forced to reevalute their operations in order to survive the downturn. Some have taken to liquidating assets or finding creative solutions to dealing with existing debt.

For some companies, solutions require leveraging technology that has already been deemed disruptive for the industry, such as IoT, AI, and 5G. These advancements don’t necessarily create more demand, but they do allow for more visibility throughout the entire supply chain, useful for both mapping out transportation for high-yield supplies and managing customer concerns about their shipments. Additionally, finding efficiency gains when it comes to resource allocation helps alleviate some of the financial burdens shouldered by these companies.

Expect to see logistics companies that survive emerge from the crisis with more thought-out disaster contingency plans as well as better risk assessment strategies. The possibility of a future global crisis throws into stark relief the need for these organizations to be able to absorb shock while still keeping critical supplies flowing.