Logistics risks that freight forwarders face during COVID 19
The hit of the pandemic COVID 19 have quaked global economic stability. Major industries that well supported the financial development of the world are facing a drop-down during this period. Being a major contributor to the global financial development, the effect of COVID 19 on transportation and logistics companies are neither less. This, in turn, affects the Freight forwarding companies which helps in the transportation of goods from one destination to another. To put an end to the spread of coronavirus being the major concern along with the sustenance of economic stability has put the world to a dilemma.
Freight forwarding requires the collective involvement of humans within various sectors of the industry. Apart from the other industries which implemented a work from home strategy, freight forwarders specifically require the working environment to maintain the movement of physical cargos. Though digitization to an extent has favored the documentation section, it could no way help the packaging and delivery of cargos. This ultimately requires human interaction which could somehow outbreak the spread of the contagious coronavirus. All three modes of transportation i.e the air, sea, and land are disrupted in some way and let have a detailed outlook of the impact of COVID 19 over these modes of transportation.
COVID 19 impact on Air/Sea/land freight forwarders
As per the studies, the commercial airline industry had a major backdrop in the revenue during March 2020 due to the drastic decrease in the number of traveling passengers. The perpetuation of this loss was done by expanding the air charter and airline cargo services. Due to the increasing spread of coronavirus, the consumers who were then a frequent in-store visitor have moved on to online shopping to meet their daily essentials. As a result, to maintain the customer commitments of speedy delivery, organizations rely on air cargos which in turn boost the air freight revenue.
According to the current global market scenario, the shipping industry is undergoing a crucial decrease in freight forwarding when compared to the previous years. Due to the outbreak of coronavirus in January 2020, there was a massive cancellation of container shipping by the mid of February 2020. Over 350,000 cancellations were registered during this period. Adding on to that over 310 container ships were marked inactive across the globe in February 2020. By April 2020, a large number of deep-sea blank sailing were announced worldwide due to the pandemic attack. In a nutshell, the impact of COVID 19 on sea freight forwarders is catastrophic.
Due to the lockdown and traffic restriction, the logistics industries in many countries are facing a traumatizing period. Transportation companies are being aloof as they find it difficult to move on to build the revenue. The national as well as inter-state borders being closed, the logistics and transportation companies are on a dilemma on how to make up the current industry fallout. Though COVID 19 outbreak has drastically affected all the transportation companies, the severity of the situation is worse for the land freight forwarders.
How to revive
Digitization of the supply chain is the way logistics and transportation can lean on to resolve the current disruption. With the aid of Big data analytics, organizations can rationalize the selection process. The widespread use of cloud computing technology can enhance the supplier relationship. The Internet of things could easily facilitate the logistics and shipping process. Along with all the above-said technologies, the use of Robotics within the supply chain management can replace the human intervention to a large extent within the industry.
The positive face within
While digging up the negative impacts of COVID 19 over the freight forwarding companies, a ray of light still remains within. Though the pandemic outbreak has shrunk the transport of major revenue-building goods and services, the import and export of essential goods have been hiked up. Specifically speaking, the import and export of preventive medicines, masks, gloves, sanitizers, face shields, etc. Have increased such that this can, to an extent, makes up the loss of the transportation and logistics sector due to the pandemic. At the same time, online purchases of the above said as well as other necessities have been extensive support for the freight forwarding companies.
As a late note, the COVID 19 pandemic attack has had a massive hit on the logistics and transportation companies. The freight forwarding companies are facing a major fallout in the revenue when compared to the previous years. A renewed urgency for the digitization of supply chain management has aroused which can act as a support system against the current disruption. As the coronavirus spread is still not under control the future of these sectors remains uncertain.