COVID-19 has been affecting all aspects of our lives. The extent of its impact is still unclear at this stage. Nevertheless, we’re sure that businesses are slumping and the number of confirmed cases continues to rise worldwide. The US is bracing for more impact from the pandemic, and the negative outlook continues to drive the global stock market towards harsher volatility. Some say the effects are short-term, while others are bracing for a recession.

What we know so far

The pandemic’s impact on the logistics industry continues to change as the situation develops. Delivery and manufacture are slowly picking up. Big companies like DHL are putting post-pandemic measures in place, and factories in China are steadily resuming operations, with productivity and activity coming back online. But there are two reasons why we can’t be too optimistic about this. Firstly, like in every other country, it’s too early to comment on the pandemic situation - one can only wait and see. Secondly, even if the country is on a steady recovery trajectory, we can’t expect too much in the short run. A successful recovery requires equal growth in supply and demand. If procurement can’t pick up as fast as demand, the results won’t be optimal, and vice versa. In China’s case, domestic and overseas economic activity hasn’t picked up as fast as its supply chain, so the overall progress is limited in the short run.

Besides manufacture, air freight remains a challenge for the logistics industry. Despite air hauliers remaining available, the mass cancellation of flights worldwide and the surge of demand continue to drive prices upwards. Business owners should be aware that air cargo will significantly drive up operational costs in the short run, and should consider sea freight for now.

Will this last?

We expect significant shake-ups in the supply-chain industry worldwide in the months. A recent PriceWaterhouseCoopers survey revealed that companies are anticipating substantial changes in how logistics will operate in the future. Fields expected to change are communications, technology and culture. But the timeline for these changes remains unknown. Meaningful transformations will depend on when a robust recovery will begin, and to that, no one has the answer.  

How can we cope?

The COVID-19 has undoubtedly caused much disruption to businesses and livelihoods alike. But this can also be an opportunity. Small companies and eCommerce can take this time to rethink their supply chain system and explore ways to mitigate risks for the current situation or the future. We’ve identified a few areas that businesses can explore:

Communications

To stay ahead of the developing trends and act fast, you should focus more on communications. Stay in regular contact with your partners and clients and pay close attention to how things unfold. Social distancing has proved that businesses and office employees are resilient and can even be business-as-usual when working from home. In this case, regular communication will be the cement between all parties involved. Organise regular conference calls, email updates, short stand-ups or even virtual gatherings. There is an abundance of tools you can use, such as Jabber, Google Hangouts and Skype.

Also, pay close attention to the news in the countries you operate. Things like border closure, flight cancellations, restriction of movement and sudden compliance changes can disrupt your supply chain model. Staying informed can help you adapt, react appropriately and avoid penalties and unpleasant surprises.

Contingency on delays

In times of uncertainty, delays and cancellations are inevitable. Delayed air freight can bring as much disruption as using sea freight for an urgent delivery - not to mention the drop of supply for both methods. In this case, it is wise to work on a contingency plan. An excellent way to start is drafting communications to affected customers or partners for when delays occur. Also, make sure you’re in a position to be flexible and balance different aspects of your supply chain, such as lead time, storage and shipment. More important is that every employee understands the situation, and you have aligned your objectives with your partners. Having a basic understanding can help you act when changes occur. You can make your contingency efforts even more effective by adopting a robust technological system.

Technology

A robust logistics solution cannot exist without a reliable technological system. Adopting in software or logistic partners that use cloud-based systems can be hugely beneficial. Cloud gives instant access to critical information for everyone, and you can track your shipments’ status conveniently. Also, cloud systems can let you share actionable updates in real-time to multiple parties. Once you consolidate these actionable items over time, they will become valuable insights to and will guide you through future situations.

Two types of logistics partners handle technology and management for businesses: fourth-party logistics (4PL) and fifth-party logistics (5PL). The former focuses on integrated logistic solutions for businesses, and the latter specialises in technological logistics solutions for multiple eCommerce businesses. Spending time in understanding your potential partners now can be hugely beneficial.  

Work culture

Social distancing has fundamentally changed the way we work. Since few office workers can work in the office, we’ve seen an unprecedented phenomenon of working from home. Suddenly what conventional wisdom regarded as impossible becomes the norm: office workers worldwide are working remotely and functioning as usual. For eCommerce startups, this is a time to create a more accommodating culture. A flexible work culture can benefit both productivity and work-life balance, and if implemented correctly, will pose little distraction to the usual workflow. Also, as a business owner, you can use this time to explore remote working plans to invest in to handle your infrastructure or cybersecurity needs. Nonetheless, the work-from-home phenomenon has initiated the trend of flexible working and valuing free time. Business owners who can adapt will prevail.

The COVID-19 situation is causing much disruption to businesses worldwide. It is a time of opportunity as it is a time of confusion. Staying ahead of the trend and developing your business robustness will help you a long way.