Reopening safely: trends in the logistics and supply chain industries

Industry Trends | By Rob Charters | 17 Jun 2020 | 4 minute read

As COVID-19 swept across the world, businesses have watched on, powerless as external forces disrupted their supply chains. The crisis has impacted logistics operations from every angle with supply, demand, and labor all hit simultaneously. Businesses have struggled with over 75% experiencing transportation issues within their supply chains.

Export powerhouses that traditionally required huge daily freight volumes closed their doors in an instant, canceling shipments immediately. Large retailers around the world turned off their lights, causing consumer demand to slow down to a trickle. Passenger cargo space evaporated, as airlines grounded entire fleets of aircraft, forcing prices to skyrocket. Logistics workers became isolated from processing centers, as lockdowns kicked in across the globe. Governments formed task forces with logistics providers to expedite deliveries of life-saving medical equipment. Cargo ships sit idle at ports for weeks, while new quarantine clearance processes occur. Manufacturers scramble for ways to decentralize their operations and build supply chain resilience.

In a few short months, everything has changed, and supply chains may never be the same again. Now, as businesses begin to recover, we’ve put together a list of common insights and trends occurring in the logistics and supply chain industries. Use these insights to craft your own reopening plan, be prepared, and to get safely back to business.

Common insights in the logistics and supply chain industry

Ecommerce avalanche

Government restrictions around the world have forced consumers to remain at home, accelerating existing trends toward online retail. As consumers alternated between watching Netflix and shopping online, an avalanche of consumption began. Ecommerce businesses have experienced unprecedented levels of demand, with many reporting 200-300% sales growth year on year. Traditional retail companies have also adapted their business models to capitalize on this new opportunity. Disruption is affecting every industry, from online car sales to bake at home restaurant products. This unexpected explosion in ecommerce deliveries is presenting logistics providers with new opportunities, unexpected competitors, and many challenges. As last-mile freight volumes surge, logistics providers are increasingly looking for new ways to remain competitive and maintain delivery times. Competing organizations are teaming up to achieve economies of scale through specialization. Digital adoption is surging, as data insights become more valuable than ever. Seven-day delivery schedules are becoming standard in many locations. Delivery workers are recruited and trained faster than ever. The package avalanche doesn’t look set to end anytime soon, so adapting is essential for success.

Safety processes under the microscope

The crisis has created new compliance demands for logistics providers. Brand new regulations have appeared overnight, and expectations surrounding corporate responsibility have increased. Governments continue to issue industry guidelines that must be quickly adopted, and the safety of each interaction is under the microscope like never before. Increased compliance has underscored the need for robust safety processes. Businesses must now prioritize the safety of their employees and customers or risk damaging their brand permanently. As the world reopens, logistics organizations have recognized the vital role of safety processes in building supply chain resilience.

Free safety checklists for logistics and supply chain leaders:

Race towards automation

Dependence on labor has been exposed as a significant weakness throughout the crisis. Organizations have been unable to complete tasks due to gaps in labor supply, creating frustrating bottlenecks. Many existing processing facilities are dependent on humans to complete manual tasks in collaboration with machines. The crisis has renewed focus on labor supply issues and solutions that automate processing entirely. Interest in IoT and industrial automation technologies has increased as businesses look to build redundancy. Further investment in technology is now considered essential for the long-term survival and growth of logistics organizations.

More suppliers shake things up

Unexpected disruptions to global supply chains have left businesses scrambling to find more suppliers. Existing supply relationships have been tested during the crisis, with many falling over. Low inventory levels forced suppliers to decide which orders to fulfill. Larger accounts or favored customers received orders, while others were left out in the cold. As existing suppliers failed to meet agreed order volumes, new suppliers were required to fill the gaps. Many of these crisis-induced supply issues will not be easily forgiven and forgotten. Businesses will now have more suppliers to choose from with alternative suppliers that helped out with inventory staying the course. Supply contracts will also be on the agenda as businesses return to normal. Existing supply contracts will be closely scrutinized with any ambiguous terms immediately clarified. Expectations will increase for new dropshipping suppliers US or European companies provide, as well as other supplier types, with firms seeking to reduce supply discrimination or termination of supply going forward.

Digital transformation surges ahead

Many logistics businesses have fast-tracked adoption of digital tools as the need for timely data increases. Previously, digital transformation programs were luxury items with real-time signatures and data modeling considered non-essential. The crisis has changed this perception with access to timely data now more crucial than ever. Demand for digital scanning devices, software, and GPS tracking devices has quickly increased. Paper-based manifests create unnecessary contact between workers and provide unreliable, slower data for leaders. Digital tools are allowing organizations to use sophisticated data modeling to improve efficiency, provide customers with data instantly, and monitor compliance with safety checklists in real-time. Leaders can now make decisions quickly on everything, from social distancing practices to staffing levels. As the new focus on safety continues to evolve, businesses have recognized that fast access to data is now a competitive advantage.

Contactless is key

Logistics workers are more exposed to viruses than other industries due to the level of contacts occurring on any given day. From higher internal interactions to increased connections with other businesses or individuals, their risk is exponentially higher. Consequently, logistics organizations are playing an essential role in reducing the spread. Previously, contact with parties receiving deliveries was the standard operating procedure. Workers would regularly check identification documents and complete paperwork for receiving parties. Now, the priority has shifted from the security of consignments to the safety of workers and customers. Deliveries are occurring with zero interaction between parties to maximize separation and increase safety for everyone involved.

Free checklists to keep your workers and customers safe:

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