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  January 22nd, 2021 | Written by

Logistics Challenges and Opportunities In the Post Covid-19 World

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  • Logistics companies will now have to offer companies with digital solutions to manage customers relationships.
  • Due to massive changes in every area of business operations, businesses will now need to optimize their operations.

The world had a good business run in 2019. March 2020 happened – when Corona ravaged globally erasing all the gains the economy had achieved. Lockdowns were affected in many countries, which significantly impacted businesses ability to carry out operations effectively, China – the world’s largest outsourcing hub, got locked down, crippling the majority of industries that relied on China’s cheap workforce to produce goods.

Ports and airlines were closed, effectively halting major transport of cargo, which impacted businesses negatively. People panicked and hid away in their homes, resulting in the closure of many businesses such as restaurants, entertainment joints, and theme parks that relied on people going out. Most businesses retrenched a lot of workers resulting in the economy performing poorly since most people had nothing to spend.

Governments all around the world started by limiting air and sea travel to avoid carriers of the disease entering and spreading further infections in their territories. This proved detrimental to airports and seaports since the majority of their revenue depended on ferrying people. Further, packages from China were suspected to carry the virus so sea freight was strictly halted. This led to air cargo taking on the mantle of transporting goods all over the world. Airports are now using this channel to recuperate profits lost during the Covid-19 onslaught. However, even as air freight becomes popular, the demand is too high the airplanes are having trouble fulfilling demand.

The biggest problem business faced when Covid-19 hit was supply chain disruption. This affected large businesses whose supply chain might run through different regions or countries. Most affected were companies that used China’s manufacturers to make their products. Most businesses lost suppliers due to various reasons caused by Coronavirus leading to them starting the search for new suppliers which obviously disrupted business operations. Suppliers resorted to collaboration with the few available other suppliers to satisfy the demand to mitigate this disruption.

Most businesses have now realized how vulnerable their supply chains are and are already looking to diversify, move from China, and find new suppliers close to home. Also, logistics companies have seen the unprecedented business from these companies who want greater visibility of their supply chain to avoid future disruptions.

Technology has been a major savior for companies during this period. Warehousing companies are now using robots to help them package and move packages in place of workers that are not available due to Covid-19. Embracing IoT to help monitor machines and packages remotely, robotics to provide labor around the factories, and AI to help in forecasting, analysis, and management of different processes in business has helped companies survive the pandemic. Logistics companies will have to know how to assist companies leverage technology to achieve an edge in the industry.

Another big transformation globally is the shift in focus to selling directly to customers. Businesses are finding it easier and more advantageous to sell directly to customers rather than using the normal distribution chains traditionally once relied upon. Modern technology; robotics, Saas software, ERP systems, and AI have made manufacturing simpler, easier, and more efficient. This shift is beneficial for both customers and manufacturers. Customers can now get new goods straight from factories very cheaply due to the elimination of the distribution chain bottleneck that added fees on products. Also, these businesses will enjoy more profits while having more control over their brand. They can now manage their brand visibility and have relationships with customers which will allow them to get feedback.

Online shopping practically exploded during the first months after Corona hit – March, June, and July. This is due to a major shift in consumer habits precipitated by a necessity to stay indoors for health security and a need to shop easily. Online demand was so high that most businesses could not fulfill this demand. Now every company worth its salt is working on its online presence and on how to effectively sell online including doing online marketing and having online content to attract shoppers.

Due to massive changes in every area of business operations, businesses will now need to optimize their operations. This is to ensure they are efficient in performing business activities. An example is the growth of online shopping which means a lot of deliveries are going to be made. However, delivery drivers are in short supply which means a business needs to optimize that operation to make sure there are enough drivers to fulfill customers’ demands.

Efficiency conscious companies are relying on sensors to make sure their operations run smoothly. Packages are now getting trackers so that they can be monitored from factory/warehouse to customer’s drop point. This is to ensure the package arrives safe and did not get tampered with along the way. Data from these sensors are being used to make delivery better and analyze package delivery times.

Effective business operations in many businesses now are due to Saas platforms that offer businesses of all kinds, large and small access to logistics that are agile, flexible, and can be used remotely in the same organization by multiple workers. Also, AI is helping by providing forecasts and analyses of markets to provide businesses with insights that can help them tweak or adjust operations in case of a market shift. For example, Amazon now knows demand will peak during black Friday and adjust operations in anticipation of these events.

The best thing that has happened during this pandemic is the adoption of last-mile contactless delivery. Businesses are making sure that packages reach their customers safely, without any contact so as to mitigate the spread of the virus and make sure packages arrive in perfect condition. Logistics companies will have to ensure most packages are delivered safely for the customer.

Also, logistics companies will now have to offer companies with digital solutions to manage customers and customer relationships.

Most companies now realize that in order to reduce shocks in business operations, supply and distribution chains will have to change. The best solution is to shorten supply chains, bring them closer to home and shorten delivery times.

Covid-19 presents a lot of opportunities in helping businesses recover from the pandemic and streamline operations to recoup losses made.