Economic Impact of Coronavirus on the Global Logistics Market
The logistics industry, viewed as an auxiliary for trade and commerce, enables industries to deliver the goods and services to the consumers by facilitating mobility throughout the supply chain. Logistics holds a major share of employment in emerging markets, and is considered a barometer for gauging the economy as it plays a role in driving inflation, GDP, and employment rate.
The supply chain disruptions during the COVID-19 outbreak had a direct impact on the logistics industry. Disruptions such as labor shortages, fragmented supply lines, weak infrastructure, and ambiguity with respect to the rules and regulations for mobility of goods.
When Covid-19 first hit China, the most affected global manufacturing hub, it spread operational difficulties across the globe. The supply chains were disrupted for the companies with manufacturing facilities in China, and trade of manufacturing goods and agricultural commodities declined. Procurement of components manufactured in China for other industries became a challenge as well. The contagion halted the cargo ports, caused a shortage in labor, and carriers were docked. As per the World Bank reports, between January and February, the trucking sector in China fell below 15% compared to that of 2019 levels, before showing recovery signs in March. The revival was associated with relaxing of lockdown measures and government actions towards the logistics industry.
In India, the outbreak led to a shortage of drivers, which resulted in containers piling up in ports around Chennai, Maharashtra and others. Around the world, with ports cutting down on labor as a precautionary measure, many containers remained unloaded well past their schedule.
Supply chain disruptions have led to delays in delivery, a surge in pricing, and a shortage in supplies. However, the impact was not felt in ecommerce shipping on an intra-regional level. To the contrary, that has seen an upward shift, with increases in online transactions compared to their offline counterpart.