The Coronavirus pandemic has become a “black swan” event in recent times. Its presence has shaken things up globally across all industries, particularly the global freight field, causing significant impacts on the economy. The pandemic has exposed the vulnerabilities of numerous companies, especially those that rely on global supply chains and international trade.
The Coronavirus pandemic has revealed how the world is interdependent and interconnected. The restrictions that were put up to limit movement affected supply chains, trade and impacted other economies. When you look closely at the product supply chain’s ecosystem, it begins from the assembly of raw materials through production and transportation to reach the target consumer. Each stage has impacted this long process.
Some safety rules have impacted the supply chain ecosystem globally. These rules include:
- The lockdown and closure of borders by various countries have caused a decrease in the supply of raw materials to manufacturers who require them to produce goods.
- The transportation restrictions that were enacted slowed the delivery times of products resulting in numerous empty containers on the docks. And after the lifting of this restriction, we are now experiencing increased pressure to transport on the air, road, and rail.
- There has also been a shift in consumer demand. This change was evident when COVID-19 was declared a pandemic. We saw a lot of people binge shopping for essential products in large quantities. This move reduced the number of people that visited the stores in the weeks that followed.
These changes in the supply chain that we have observed in the last couple of months have also affected and shaped market trends. For instance:
- Enhanced digitalization
There has been an increased use of online systems such as the Electronic Terminal Information System (ETIS) to book their freight transportation online. Lineas, a company from Belgium, has adopted this process to keep operating in these pandemic times.
If you are looking to buy heating, ventilation, and air conditioning products along with refrigeration systems, you should order from a supply company such as Cold Air Central, which has also quickly adjusted to the supply chain crisis during the pandemic. This organization also supplies high-quality parts that have been tested and approved by reliable dealers to its customers across the globe. During this pandemic, this company has restructured itself so that you can get what you order in a timely fashion.
- Increased use of freight trains
The United Kingdom introduced rail freight to transport essential supplies such as food and medical consumables. The trains that ferry groups between China and Europe also increased from 15% to 18%, delivering 174,000 containers from the initial 1941.
- Increased use of e-commerce
Given that people would not move around much, the e-commerce sector was enhanced. Companies that never used to have websites quickly set them up to allow consumers to access the goods they require. A study conducted by ACI Worldwide on utilizing global online transactions reported a 209% increase in e-transactions among sellers and buyers in April alone. Additionally, there was also a rise in non-contact deliveries to minimize disease transmission among people.
- Reshoring of manufacturers
Manufacturers also saw the need to cut the long supply chains. A good example is Germany and France teaming up to establish an electric-car battery company based in Europe to minimize sourcing of batteries from Asia.
- Enhanced use of technology
Before the pandemic, there was minimal use of technology. However, at the moment, we have seen increased use of tech tools such as artificial intelligence, the internet of things (IoT), virtual reality, and robotics to enhance operations and visibility. Such technology has also automated supply chains significantly.
There is no doubt that the Coronavirus pandemic impacted the global supply chains immensely. The pandemic has caused people to change their view and revamp their supply systems to be more robust and accommodating to the current demands.
With all these changes, it is critical to note that global trade also plays a role in the flow of goods across regions and people. While we shift our focus to the new way of doing things, the approaches that have been adopted will have been revised after all this is over. A review of these methods will ensure that these approaches are agile, sustainable, and utilize technology to streamline the supply chain process.