How the world of logistics is dealing with a pandemic
Stardate May 2020: the world has been in various forms of lockdown for the past few weeks with a huge percentage of us working from home. Industries the world over have either ceased functioning completely or have pared down their output to manageable levels based on how many staff are able to safely continue working.
Put simply, the commercial and industrial sectors have ground to a halt. Except they haven’t. Hundreds of millions of goods are still circling the globe as we collectively increase our online purchasing; logistics, freight and supply chain providers are still having to function at differing levels of capacity. Consumer goods are just one part of the challenge – the provision of critical products from and to those sectors still working flat-out (emergency services, healthcare, pharmaceutical) is equally difficult. Oh, and I haven’t even mentioned China yet. The first country to be affected by the virus, China accounts for huge swathes of products in most sectors (e.g 40% of the world’s APIs – Active Pharmaceutical Ingredients) and most of its factories have been closed since January.
So how is the mass transport industry coping? Interestingly it spends much of its time planning for unexpected scenarios. As an example in the last few years it has focused much of its risk management effort on the impact of Brexit, along with ongoing monitoring of the global oil stock price etc. However, when force majeure occurs at the scale that Covid-19 has, all bets are off. The one thing that wasn’t factored in was ‘what if China suddenly shuts down?’. Why would that question even crop up?
Suddenly alternative, more localised product sources have had to be found at increased cost and logistical impact. Risk management planning has become redundant as all effort has turned towards keeping the world’s economy moving. The logistics and mass transportation industries have for many years focused on optimising a globalised, long supply chain-based model, which works well and is robust if its infrastructure is not subject to major impact. In the space of four months that infrastructure has been effectively broken, meaning a shift to shorter supply chains and a knock-on effect to those smaller companies previously part of the bigger picture.
Conversely, it has forced the industry to quickly become more agile, and it is demonstrating its ability to move (sic) quickly and demonstrate greater resilience in the face of a global crisis. This will have a profound effect on the way in which logistics is managed in the future and through the continued leveraging of tools such as technology (everything from AI to advanced easy clean or antimicrobial coatings – protecting people is key) the industry should continue to find itself in a good place for years to come.
