Impact of Novel Corona virus On Transportation & Logistics Service Provider
There is no doubt that corona virus has crippled the entire world economy from its roots. Each and every sector, be it the service sector or manufacturing sector, has been experiencing a major jolt by this pandemic at the moment.
The adverse economic effects of this pandemic seem to be long-lasting and are expected to take years to fade away, and the impacts have already been felt throughout the world.
The transportation sector or transportation service providers have not even been spared from this vortex. It is a known fact that the transportation and logistics industry plays a significant role in keeping the world interconnected.
But from the beginning of 2020, more and more countries have closed their borders and reduced transportation facilities in a bid to contain the corona virus outbreak. These exercises have affected the logistics services providers.
Next, we will understand how coronavirus has affected the transportation & logistics service providers across the world.
The 5 major factors affecting logistics service providers during the ongoing Coronavirus pandemic are:
B. Ecommerce Breakdown
C. Decrease in Manufacturing
D. The Drop In Import & Export
E. Grounded Aviation Industry
We will understand each of these factors in detail.
Lockdown was the principal reason for the devastation of logistics service providers. Many countries have declared a lockdown to contain the coronavirus spread, which has not only paralyzed human life but also crippled the world economy.
Transportation, which plays a vital role in keeping the world connected, also lost its wheels due to the lockdown. The closure of all the places like cinemas, clubs, restaurants, gyms, schools & colleges and religious places has significantly reduced the need of the people, which in turn hit the supply of the goods. This chaos ultimately affects the logistics and transportation service providers.
B. Ecommerce Breakdown
Ecommerce has made a valuable contribution to sustaining the transportation industry and is an invaluable source of revenue for logistics service providers across the globe.
But, as soon as the governments across the world implemented lockdown in their countries to contain coronavirus spread, the entire system collapsed dramatically, including the ecommerce industry. The collapse of the eCommerce industry ultimately hit the local transportation services.
The decline in consumer demand was another key reason for the slowdown in the ecommerce sector. With the closure of places like cinemas, gyms, restaurants, schools, colleges, the purchase of many related items has also come down drastically.
All this led to a decline in ecommerce orders, which ultimately affected the logistics service providers.
C. Closure of Manufacturing Units
The fear among the people, lockdown announced by the governments, shortage of men power, and reduced consumer demand led to the closure of manufacturing units. The closing of the manufacturing units also hit the logistics and transportation sectors closely associated with it.
As per an estimate, the manufacturing sector accounts for more than 40 percent of the logistics sector’s revenue. The closure of these manufacturing units proves to be a fatal blow to many logistics service providers. They lost their business and a major source of income. The transport service providers that relied solely on manufacturing units had to shut down their businesses.
In this way, coronavirus also marked a very adverse impact on logistics service providers associated with the manufacturing sector.
D. The Drop in Import & Export
The sudden drop in import and export demand is another factor that affects the logistics service providers. Since the end of January, many countries have sealed their borders and imposed a ban on transportation.
This has generated unexpected and unprecedented chaos in the import and export industry. For example, where there was a demand for goods, there was no supply, and where there was supply, there was no demand. This import-export imbalance has ultimately affected the logistic service providers.
Their businesses came to a standstill because of this uproar. They stopped getting new orders. Also, their old payments were put on hold for an indefinite time. As a result, many transportation service providers got trapped in debt. For them, coronavirus proved to be a fatal blow, forcing them to close their logistics services company permanently.
E. Grounded Aviation Industry
Compared to other sectors, the aviation industry is the worst hit by the coronavirus pandemic. Since the beginning of February 2020, many countries have banned or canceled passenger and cargo flights.
Air cargo shipping is one of the key revenue sources for the logistic service provider. But its closure severely impeded the transportation industry. According to an estimate, between March 2019 and March 2020, air freight volume globally declined by 19 percent.
Besides, there are many other small to large logistics industries that solely depend on the cargo shipping industry. All of them were hit hard by this step. Even the large and small logistics service providers felt the brunt of this action equally.
The aviation sector is still not fully operational. There is still a partial or complete ban on flights across many countries.Conclusion: Like all other sectors, the corona virus has hit the transportation and logistics sectors too. Besides, it is obvious that it will take years to get out of this unfortunate situation; to revive. However, if we- logistics service providers, bounce back with full vigor and courage; we will overcome this disaster very soon. If you are looking for a transportation service in Miami FL, contact us.