The shipping docks are clogged with arriving containers. Warehouses are overflowing with goods that cannot be exported due to a lack of trucks and drivers. Factories are idle because the necessary components are not reaching them. Businesses are forced to reduce power because of social distancing orders. This is severely impacting the global logistics industry.

The industry has been growing for the last two years, with one report indicating that the market was worth over $4,730 billion in 2018 and that it was projected to reach $6,300 billion by 2024. Yet, COVID-19 has slammed the brakes on this growth, making it one of the most significant casualties of the deadly COVID-19 pandemic.

How Is COVID-19 Impacting Supply Chains?

The COVID-19 pandemic has put hundreds of millions of dollars worth of trucking and shipping business in jeopardy by forcing thousands of companies worldwide to power down, with manufacturing plants in the US, China, and Europe being temporarily shut. In fact, the word “disruption” does not even describe the impact of Coronavirus on the overall supply chain. Forget about making profits; businesses are concentrating on just keeping their heads above water.

In a recent global survey conducted by Statista, 73% of the respondents accepted that the Coronavirus pandemic had impacted their logistics and supply chain operations.

In addition, the Institute for Supply Management (ISM) conducted two surveys with a gap of three to four weeks to assess the impact of COVID-19 on logistics businesses and how they are planning to deal with the repercussions. The results were staggering. Almost 47% of the respondents reported, on average, a 22% reduction in revenue targets, while 36% reported a 27% reduction. This survey was conducted in two parts. The first part, conducted in early March, revealed that more than 80% of the respondents believed that their business would experience some impact due to the Coronavirus disruptions. In the second part, 95% of the respondents had already been impacted by Coronavirus-led supply chain disruptions.

Passenger Aircrafts Are Turning into Cargo Carriers

With COVID-19-driven lockdowns, air carriers have grounded their passenger air crafts in response to travel restrictions and plummeting demand. With severe capacity constraints, carriers are spot rating shipments and the rates are likely to rise with demand. Also, the curtailment of passenger flights on the trans-Atlantic route is impacting the belly cargo capacity. Many air carriers are using their idled aircrafts to move medical supplies and food across vital freight hubs.

The Commercial Shipping Sector Is Suffering Too!

A recent report indicated that 80% of global trade is done through commercial shipping. So, with the commercial shipping being disrupted by the pandemic, the tremors will be felt in the global supply chain.

Most shipping companies have already reduced the number of vessels on routes connecting China with the US, India, and Canada. According to one report, this curtailment is responsible for losses of more than $350 million per week in commercial shipping.The reason why global shipping has been the hardest hit is that some of the world’s biggest seaports are in China and factory closings and quarantines made access to those ports a challenge. There is still some uncertainty regarding how this pandemic will be dealt with.

The Trucking Sector Is in Dilemma

The trucking sector is in a catch-22. It is feeling the pinch of less supply, while also experiencing temporary spikes in demand. This peak in demand is due to customers stockpiling and store owners restocking their shelves more frequently.

Yet, with cities like New Jersey restricting non-essential retail businesses to close by 8 pm, further delivery problems are expected for companies that receive trucks after regular working hours. Delivery driver shortages, which has been an evergreen problem, is likely to become an even bigger issue since restrictions on delivery times and potential health issues are likely to complicate work schedules.

So, with fewer work hours and drivers, improving driver efficiency has become a necessity. One reliable way to do this is to use a map route planner to plan optimized routes that factor in the weather forecast, traffic conditions, and the customer’s preferred delivery time windows. Since the routes are shorter and faster, it will help reduce fuel expenses and the time drivers spend on the road. Also, because they spend less time on the road, the drivers’ exposure to potential COVID-19 infection is reduced.

What Does a Post-COVID-19 Logistics Sector Look Like?

The current situation is a stress test of the global logistics industry. Demand has dropped across all channels, including the shipping, trucking, and air cargo industries. The Coronavirus outbreak has slapped everybody in the face. While it is nearly impossible to make short-term forecasts for the global logistics sector, once the dust has settled, it looks like the post-Coronavirus years will be all about digital disruption. As the virus severity slows down over time, the industry will begin to return to normalcy. However, it might take some time to resume the operations in their pre-coronavirus state.

Dan Khasis is CEO of Route4Me.