How COVID has impacted the logistics industry
In our latest newsletter, our president, Steve Jones, talked briefly about managing final mile business during the pandemic. We wanted to expand on those thoughts and talk more about what COVID-19 is revealing about the industry and its future.
Major decline in consumer demand
We don’t have to remind you what happened when COVID-19 first hit this spring.
“When COVID-19 first took hold, it was widely reported that there was a huge run on essential items, like toilet paper, hand sanitizer, and groceries, with everyone staying at home and sheltering in place,” according to this article in Logistics Management. “That kept shippers and logistics and transportation services providers incredibly busy, to say the least, and showed those that may not have been in the know, the incredible importance and reach of logistics and supply chain operations.”
When our economy was first shut down, we weren’t sure what that would do to the logistics industry. Manufacturing halted, consumer demand for services in effect died because those services were no longer available. Traditional supply and demand were greatly thwarted but that gave way to a different kind of supply and demand.
With people staying home, they were turning to the internet to fill their time but also to conduct business. Items they might normally purchase in a local store (like toilet paper!) became a hot commodity online. Home improvement projects, entertainment, and other stay-at-home activities increased e-commerce by nearly a third, according to some estimates. Our own deliveries increased to the levels of holiday rush traffic and we don’t expect that to die down anytime soon.
What the changes revealed
With the changes in demand, it has revealed a few things about how the logistics industry operates and what needs to happen in the future.
“There is no question that the crisis has tested the resilience and flexibility of distribution networks and logistics operations worldwide. Leaders should use this time of disruption to reset, rethink and renew logistics and supply chain management for the long-term benefit of their businesses and the communities they serve,” according to this article on Accenture.
Promising too much
As we shared in our newsletter, it quickly became clear that what we’ve been saying for a while now is true: the urgency to promise increasingly expedient deliveries would cause major problems in the supply chain. Deliveries that would normally take a couple of days started taking a week or more as retailers and logistics providers alike rushed to provide the essentials.
The entire world of logistics changed procedures both in the warehouse and along their respective delivery routes. We all quickly changed our procedures to keep both our employees and customers safe. This has required us to alter our white glove procedures and to find other ways to meet our customer’s needs.
Flexibility is always vital in a rapidly growing and changing industry. But during a pandemic, being flexible is the only way to stay in business. That will not change any time soon and in fact, the need to be flexible will increase.
Growth of digital tools
Whether it’s adding online ordering options to a company website or a logistics provider increasing their reliance on cloud technology, the growth of digital tools has burgeoned during the pandemic. Finding new ways to communicate where in-person connections are no longer possible, was immediately necessary. Even when we go back to “normal,” the economy is changed enough now that the push for even more digitization in the industry will increase. Companies that were holding out before will likely not have any option but to move to online platforms.
No matter what happens with COVID-19 in the future, it is beyond clear that quality and consistent communication is key. Communication along the supply chain—from the manufacturer to the end customer—helps prevent and solve lots of problems.
As we all navigate this economic and societal crisis, we at On Time Logistics are dedicated to serving our clients to make sure deliveries are made efficiently. Are you needing a courier service or final mile delivery service to maintain a high level of business? Give us a call.