The logistics and freight forwarding industry is the vein that keeps the modern globalized world interconnected. Due to pandemic, most of the countries experienced lockdown that resulted in shut down of borders. With limited transportation and travel constraints to contain the spread of the COVID-19 outbreak. This caused obstructions for international logistics industry and global economy was severely impacted, this impacted air, freight, and sea transportations. We are just interpreting the various consequences on the logistics industry.
The IFC International Finance Corporation reports, under ocean freight the container volumes at Chinese docks declined by 10.1% in the first quarter of 2020. The brunt has been suffered by both exporters such as Brazil, China, India, and Mexico, and importers such as European Union. The scenario depicted weak demand for the routes between Asia and Europe, United States, and Latin America. However, the land logistics remained operational with minimalistic use for supplying essentials such as medicines, etc.
Whereas another aspect to UAE’s central location provides a gateway to both east-to-west and north-to-south, provides access to more than two billion people within four-hour travelling time which is why our re-exports business is one of the most robust on global scale. Also, the minimal imports and exports tariffs with neighbouring countries and international trading partners program, double taxation agreements help limit imports & exports liabilities, for example, the active promotion of fair competition laws.
Even though disruptions around the supply chain have led to delivery delays, surged pricing, traffics, etc. The pandemic has disrupted the small trucking industry severely and also, larger corporations have suffered severely, even though they can develop a pathway to recovery but the smaller firm due to lack of technology and strategies will take a longer recovery time.
We have to consider the two-fold approach while tackling the situation;
First one – Short-Term Action steps where companies can perform carrier capacity and service capabilities shall help in identifying potential shortfalls, constraints, and determine mitigation strategies. Consider alternate strategies such as mode shifting, assess fleet strategies that can add to the exceeded load, and keep updated with the government regulatory.
The Second one – Mid-term to long-term It is time to think logistics industry with a three-dimensional approach, focus on agile technology that has complete visibility over the business, establish strategic collaborations and partnerships that can enable smooth compliance activities, adopt a newer delivery model, and making the transition from legacy systems to tech-driven logistics that makes operations smooth and easy.
Re-instating and harmonizing the global trade have become necessary to get the essential supplies delivered to countries to help citizens. We can say UAE can well act as an epicentre to do that. Logistics and supply chain managementcompanies such as ACI Logistics are emerging in achieving great success in supplying safe HUB for essential supplies into Asia and Africa. They are lending a helping hand into the countries in conflict, hard to reach places and austere environments to provide essential supplies efficiently and timely.
The world we live in needs regulars supplies due to the rise in global trade volumes, where consumers’ needs can be from anywhere due to the eCommerce industry’s rise on the globe. To ensure that in times such as these we need to find effective transportation and supply chain to keep their goods moving into the markets. However, we need to ensure that the essentials are always a priority in every scenario or until the world recovers from the pandemic. So that we safeguard people with whom we do business while sustaining our businesses for future growth.