The impact of the pandemic on the logistics

The global freight market is massive and complicated, it is a silent giant behind EVERY industry. Take VICO Logistics as an example, our freight consolidation services go all over Vietnam as well as Indochina, servicing across different industries. Logistics is a versatile but sizable industry. The rise of COVID-19 has definitely rained chaos and instability upon businesses and supply chains all around the world. In this article, let’s take a look at how the pandemic has transformed the logistics industry.

Supply chains disruption

The pandemic posed significant challenges for many supply chains as mentioned, with lockdowns coming and going, factories and general flow of raw materials have been disrupted or at least created an instability. With the uncertainty from raw material supply or general supply chain movement, logistics services all around the world were forced to play the waiting game, hoping for that very much needed resume.

During the pandemic, 57% of companies reported (from EY.com) serious disruption with 47% complained about workforce inconsistency. 

However, most of them saw the opportunity to go full force on developing the digital supply chain, it is indeed the future for the volatile supply and demand of markets. According to McKinsey & Company, the covid-19 pandemic has possibly cost businesses $5 trillion worldwide if the chains continue to fail.

Making changes through Identifying weaknesses

First it was the supply shock in China, then it was the plummeted demand that followed. It is because of this life-changing experience, many saw the weaknesses and strength of supply chains, identifying elements that they should keep or discard. Understanding where risks lie is really important for companies to protect itself.

The top 3 changes companies vowed to make are to increase efficiency, workforce consistency and increasing visibility. As mentioned previously, the digital supply chain is on the rise but so is integrated supply chain, with the idea that one supplier is too risky, especially after experiencing the pandemic. An integrated supply chain utilizes many different connections to ensure that at every step of the process, no one is fully dependent on anyone.

>> Find more on The Impact of COVID-19 on Logistics Report from IFC here

Development of digital technologies in logistics

It is also because of the digital switch of many foundational processes; companies have also decided to retrain their workers to be familiar with digital technologies and adapt to future companies' digital campaigns. The future of supply chains was projected to be more digital-reliable. After the pandemic, it is accelerated and further consolidated that it will be much more automated with various implementations of AI and machine learning within the global supply chain.

Obviously, there were more losers than winners in 2020, but the future of the logistics industry and global supply chain is looking promising. This wake-up call that everyone needed seems to be working wonders in terms of showing the world what is essential and what is not. We are still early into our recovery phase but VICO Logistics is certain that everyone that took a hit will ultimately turn this painful experience into tremendous achievements and opportunities. ​

Related posts on COVID updates:

> The COVID Impact To Garment And Textile Industry In Asian Countries

> Prepare to cope with Vietnam COVID-19 caused port congestions

Watch more: Distributing the COVID Vaccine: The Greatest Logistics Challenge Ever

*The article is available in Vietnamese and Chinese, please switch language to read more.