When we predicted at the start of the new year that COVID-19 would continue to affect the logistics industry, even then, we called it a “no-brainer.” Today, we are focusing on how this prediction has proven true about two years after the virus started showing up in China before it spread worldwide.
Increase in deliveries
As the world shut down, people needed items delivered to them. This means there was more of a strain on the logistics industry. This phenomenon has continued even though the world is starting to reopen thanks to the COVID vaccines. Customers became accustomed to the ease of online ordering and have stuck with it! This growth showed weaknesses in the supply chain that made it even more difficult to comply with the increasing demand in the last year.
Vaccine
At the start of the year, vaccines were still in development, and talk of how they would be rolled out was still happening. We, along with many in the industry, wanted logistics workers, especially those whose work takes them around people to receive the vaccine in the first round. Between our high risk related to being out in public and going to people’s homes and the sheer fact that the supply chain would shut down if there were a drastic loss of personnel to make deliveries, getting the vaccine to people in the manufacturing and logistics industries was paramount.
Continued absenteeism
Like any other industry, the logistics and transportation industries have been plagued with actual COVID cases and required quarantines made making deliveries problematic across the country. The gap (between the number of deliveries and having enough staff to make those deliveries) widened with the drastic uptick in deliveries.
Supply chain-wide issues
The first two points focused directly on the logistics industry, but logistics are also drastically affected by issues across the supply chain. Like any relay or chain, if the earlier components have problems, it affects everyone down the line.
According to this article, labor shortages continue to plague pretty much all sectors.
“Labor shortages continue to be one of the biggest concerns in stabilizing the supply chain. New and total unemployment claims fell to 4.8% in September from 5.2% in August but is still higher compared to the October 2019 rate of 3.6%,” the article reads. “This large drop in long-term unemployment exceeded expectations, and many attribute this to the extended federal unemployment benefits that expired on September 6.”
The article also talks about sharp declines and shortages of many supplies that need to be delivered for manufacturing and construction. Those delays cause further problems with the delivery of the final product. The shortages have almost forced sharp price hikes, causing headaches for consumers.
“We expect continued pricing pressures due to raw material costs through the balance of this calendar year and likely into 2022. We do expect some market corrections to occur likely in the back half of 2022 as supply and demand correct from the challenges of the economic restart but may not return to levels seen before the pandemic,” the article reads.
The driver shortage, increased freight, and the huge increases in freight costs due to oil and other costs rising continue to make freight movement a concern. “Freight challenges continue — both internationally and domestically — and we expect these challenges will continue through the holiday season and into 2022,” according to the article.
The pandemic has both exposed and created problems in our industry. Yet, we can also say that it’s made opportunities for new processes, growth, and enhancement.