Nationwide lockdowns, restrictions on the borders, and operational hindrances on account of the outbreak of the coronavirus situation have disrupted the supply chain across the world. China has a deep-rooted supply chain network in most of the COVID-19-affected countries, including the U.K., the U.S., India, Hong Kong, Singapore, Japan, Spain, South Korea, Germany, and Italy. Apart from China, these nations are also involved in extensive trade of various essential and non-essential goods with one another. All these countries have had to temporarily discontinue their trading activities to contain the impact of the virus.
COVID-19 Impact Analysis on Logistics Industry
The COVID-19 impact on logistics industry can be mostly observed on offline logistics services. There has been a subsequent shift from physical shopping to online shopping due to the social distancing norms in the affected countries. These nations are embracing social distancing as a means to mitigate the spread of the coronavirus. This has resulted in a substantial switch to e-commerce platforms for procuring items that might have been otherwise bought from a brick-and-mortar store. Moreover, the shutdown of retail stores in the COVID-affected nations has put the brakes on offline-mode logistics services.
To reduce the reach of this disease, most of the nations have imposed restrictions on the opening of retail stores selling non-essential goods. Furthermore, the automobile sector has also faced the wrath of this pandemic owing to the disruptions in the supply chain and a decline in sales. Due to the rapid spread of the coronavirus, governments were compelled to impose a complete or partial shutdown of manufacturing units of the automotive industry, which, led to a decline in vehicle production.
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This pandemic also had a significant impact on last-mile logistics services. Eminent e-commerce companies, such as Walmart Inc. (Flipkart Pvt. Ltd.), Alibaba Group Holding Ltd., and Amazon.com Inc., are facing issues in goods delivery. The contractual logistics partners of these firms are unable to deliver products in due time owing to the restrictions imposed on the movement of vehicles. Owing to this challenge, e-commerce companies have been coerced to tie up with on-demand last-mile delivery partners to cater to the sudden surge in product demand.
As per P&S Intelligence, other logistics-dependent verticals, such as the food & beverage industry, also witnessed a substantial downfall in revenue due to the closure of cafés and restaurants. As eating outlets went into hibernation, the requirement for logistics services in this sector decreased severely. These services were used by food processing units to transport packaged food and drinks to retail outlets, as well as to move raw materials and the finished products between the source, factory, and warehouse.