What is the effect of the pandemic to Logistics?

The transportation and logistics industry performs one of the most vital services of the
modern globalized and interconnected world. Since the beginning of 2020, more and more countries
across the globe shut down their borders and limited transportation and travel to contain the
coronavirus (COVID-19) outbreak, thus, creating impediments for international trade and
transportation. The pandemic affects almost every dimension of economic activity and individuals
globally. As a consequence of the coronavirus outbreak, important supply chains in the logistics and
transportation industry are hampered, though differently across air, freight and sea sectors. The
coronavirus outbreak brought a meta-uncertainty. Therefore, there are various interpretations of its
potential consequences on the logistics and transportation industry.

Logistics firms, which are involved in the movement, storage, and flow of goods, have been
directly affected by the COVID-19 pandemic. As an integral part of value chains, both within and
across international borders, logistics firms facilitate trade and commerce and help businesses get
their products to customers. Supply chain disruptions to the sector caused by the pandemic could,
therefore, impact competitiveness, economic growth, and job creation.

The COVID-19 outbreak that started engulfing various nations across the globe is forcing
governments, national and international authorities to take unprecedented measures such as
lockdown of cities and restricting the movement of people to check and control the exponential
spread of the pandemic. This has consequently affected global trade and supply chain which has
come to almost a standstill.

Most countries have restricted or stopped international flights and air travel, which has led
to a deferred slowdown as far as the movement of goods are concerned. This has in turn shrunk the
air freight capacity limited to the available and operational cargo aircraft and ferry passenger flights
carrying only cargo. The shipping sector has also been hit as vessels are placed under quarantine for
weeks before being allowed into the ports thereby slowing down processes. Shipping containers are
stuck at the ports and on transit at state borders.

At the same time, raw materials or manufactured goods are unable to reach ports due to the
lockdowns. Moreover, the demand for raw materials has reduced for the most traded commodities
as most countries now require medicines, pharmaceuticals, medical supplies and medical
equipment. Hence, shipping lines are operating under loaded thereby disrupting the balance of the
ratio between revenue and the operational costs. Furthermore, there is a severe shortage of
manpower at the air cargo facilities, terminals, shipping ports, inland container depots, warehouses,
customs, and government authorities and so on due to lockdowns which again hinders any scope of
supply chain movement.

The first- and last-mile transportation and intermodal connectivity of goods within the
domestic segment of the supply chain has come to a standstill during the lockdown. This has
affected the movement of supplies that is directly proportional to the increase in the cost of
commodities. Only essential commodities are permitted to move.
 The impact of COVID-19 was first felt in China due to the role it plays in global manufacturing
(with Wuhan, the epicenter of the pandemic, playing a particularly significant role—more than 200
of Fortune Global 500 Firms have a presence there). China is also a major consumer of global
commodities and agricultural products.

Disruptions to manufacturing in China rippled through global supply chains. Cargo was
backlogged at China’s major container ports, travel restrictions led to a shortage of truck drivers to
pick up containers, and ocean carriers cancelled (or blanked) sailings. The resulting shortage of
components from China impacted manufacturing operations overseas. Major industries around the
world, including automotive, electronics, pharmaceuticals, medical equipment and supplies, as well
as consumer goods, were affected.

The pandemic spread to the rest of the world, leading to lockdowns and border closures that
restricted the movement of goods. Additional protocols (such as social distancing at warehouses)
introduced to ensure the safety of workers contributed to bottlenecks for freight.

Supply chain disruptions and the lockdowns are already affecting logistics companies.
Operational constraints are expected to lead to delivery delays, congestion, and higher freight rates.
However, not all segments will be impacted equally—companies that serve e-commerce are seeing
increased activity as consumers opt for online shopping of essentials, while those that serve other
sectors (such as auto and consumer goods) will see a downturn.

Strategies to get more investments during pandemic.

1. Speed can help overcome uncertainty. During the pandemic, speed has become a critical
value proposition. For example, with less capacity available, shippers are looking to quickly
lock in reasonable rates to guarantee fulfilment. Prioritizing digital tools, such as AI-based
instant quoting services, is one way brokers have begun to shift strategies. Think about
where increased efficiency can help employees and customers interact seamlessly. By
identifying specific tasks that can be streamlined through automated methods, businesses
can adopt sustainable technology practices that deliver powerful benefits.

2. Keep your eye on the bigger picture. Reacting with agility to supply chain disruptions
requires a flexible ecosystem that can adjust in real time to keep up with fluctuating
capacity. But supply chain leaders can't calibrate their networks to avoid these disruptions
without visibility to data insights and partner capacity. Management solutions that offer
real-time data across the entire supply chain have become a life preserver for many
operations during the pandemic—and they will become the expectation post-COVID.
Investing in new ways to harness machine learning and block chain technologies to capture
relevant data and develop prescriptive insights can help companies navigate disruptions.

3. Digital innovation doesn't stop when COVID ends. Building a culture that advances digital
solutions starts at the top—and requires buy-in at every level. Identify individuals in your
organization who can champion the right technologies and facilitate their implementation.
 Additionally, tap into consultants who can provide an outside assessment of your existing
tools and introduce powerful, new ideas.

4. Get better rates. Negotiate better rates by scheduling freight services in advance as much as
possible. Also, coordinate off-peak pick-up times and days for local/domestic shipping and
use a freight company to help lower costs.

5. Leverage technology to your advantage. Some ERP systems have freight management built
into them and create a seamless, behind-the-scenes opportunity for finding freight
companies, scheduling the shipments automatically, measuring logistics KPI metrics, etc.

6. Develop relationships with carriers. When companies develop more strategic, longer-term
carrier relationships, they create transportation management advantages that have bottom-
line implications. Longer-term contracts give the carrier time to find other customers in the
area to create a more efficient network. If the carrier is more profitable, then you’ll receive
better rates. A longer relationship can also lock in a lower rate and provide better service.

7. Assess your freight program and challenge it. If you’ve always assumed that something
wouldn’t work, revisit it and question it. Take a step back and gain a better understanding of
your freight needs and logistics. You just might be surprised by how some creativity and
negotiation can change the status quo.

The threat of the Coronavirus has since turned into a crisis impacting workplaces, the stock
market and the health of individuals all over the world. While most organizations have a crisis plan in
place, many are ill-equipped to deal with the severity of the Coronavirus, also known as COVID-19.

Companies who were once resistant to the idea of allowing their employees to work from home
are now forced into making it a priority. Major tech companies such as Amazon, Apple and Microsoft
have asked workers to work remotely. Schools are shifting to working and teaching remotely and
even Capitol Hill staffers are preparing contingency plans in case of an outbreak.

As the confirmed cases and death toll rises, employees are becoming increasingly paranoid.
Morale is rapidly declining as many fear for their lives. In addition, they’re overwhelmed with the
change to their normal routine due to children being home and warnings becoming more urgent for
the elderly. The amount of fake news rivals the real and even the real news is more than enough to
cause concern. The reality is, businesses can’t simply stop operating because of the coronavirus and
remote work for many is not a possibility.

The rapid rise of COVID-19 cases in the Philippines continues to test the spirit and tenacity of
both small and big businesses. While we’re still in the middle of the extended Enhanced Community
Quarantine, many companies have stepped up to make sure that their employees are well-provided.
No matter what method, these are just some of the ways that employers are making sure that they
care about their employees’ well-being.
 Governments and employers must work together to promote economic stability while
prioritizing public health. Employers should offer emergency expansions of both paid sick time and
paid family and medical leave, as well as flexible work arrangements to enable workers to meet their
responsibilities at home and at work.

They must provide emergency benefits for workers. Working people are facing an
unprecedented need for paid sick time during this pandemic to recover from COVID-19, to
quarantine when exposed, and to care for family members who are sick. It is in the interest of
businesses and the public that workers use sick time to reduce the spread of COVID-19.

Workers may also need longer-term leave to provide care to children because of school and
child care closures that have affected tens of millions of families. With many workers juggling
providing care and instruction to their children while maintaining their jobs, paid family and medical
leave policies allow them to take time away from work to meet these needs without losing their pay
checks or their jobs. These policies also ensure that companies can retain experienced and talented
workers and better protect the health and productivity of their workplace.

People are facing unprecedented challenges in their daily lives, ranging from caregiving for
relatives and children, to managing their own health, to commuting and working in unsafe
conditions. Companies should implement emergency measures to increase flexibility for all workers,
regardless of job type.

The IATF have issued general guidance for protecting workers outside of healthcare, which
includes the following measures that employers must implement to protect workers and the public
and mitigate the spread of the disease.

1. Increase the physical distancing between workers and customers to six feet. This is the most
critical safety guideline for employers to follow to protect workers and the public. The IATF
recommends that social distancing in the workplace can be accomplished through
establishing policies and practices such as flexible worksites to increase the physical
distancing among workers and between workers and others; using barriers; and physical
distancing in worker-only spaces like break rooms.
2. Everyone should wear face masks and face shields. The IATF announced new guidelines
recommending that people wear face shields in public settings.
3. Provide hand sanitizers throughout the workplace and the ability to wash hands frequently.
4. Workers should be able to take frequent breaks to wash their hands and provided places
and supplies to do so. If soap and running water are not immediately available, provide
alcohol-based hand sanitizers containing at least 60% alcohol.
5. Do not share equipment. Workers should not use other workers’ equipment or work tools.
6. Increase ventilation rates. Increase the percentage of outdoor air that circulates into the
work environment.
7. Clean and disinfect facilities after confirmed COVID-19 exposure.

Customers have taken a number of steps to ensure that the consumer pipeline for goods is filled and
customer satisfaction is protected as much as possible. Price sensitivity is fundamental to their crisis
mode.
Crisis management plan. When these plans are in place and tested, the ability to cope with an
interruption in the supply chain is significantly enhanced.

Dual sourcing. Whether it may require two different ocean-going logistics companies, two or more
different manufacturers or two different carriers, transportation companies, logistics/supply chains
need redundancy to react quickly to interruptions.

Communication. The importance of continuous dialogue among all parts of the supply chain is
critical. If you can identify where the pain points will be, suppliers can react. Companies need to
know which part of their supply chains have the weakest links.

Rates. By negotiating rates before a crisis, the supplier can ensure that its cargo will not be bumped
by the e-retail giants of the world during a crisis. If there are 7,000 containers on an Asian ocean-
going vessel, companies want their containers to be the ones that make it to the Philippines.

Use of price optimization software to accurately uncover valuable information across all products to
maximize profitability as opposed to operating on a cost-plus basis, and to establish pricing
consistency on services.