Post-pandemic Growth Opportunity Analysis in the Logistics Industry

Post-pandemic Growth Opportunity Analysis in the Logistics Industry

Insights on Flexible Solutions and Alternate Delivery Models and Strategies to Mitigate Emerging Risks

RELEASE DATE
01-Jun-2020
REGION
North America
Research Code: PB23-01-00-00-00
SKU: TP00199-NA-MT_24429
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Description

The global logistics industry had a turbulent 2019, registering 1.2% in merchandise trade volume growth due to the stagnant global economy, trade disputes, geopolitical uncertainties, and environmental regulations. In Q1 2020, the COVID-19 outbreak flipped the growth switch in every area of the economy, and the global supply chain is no exception. As the global economy grapples with the pandemic, its impact on global trade and the supply chain is mounting with rapid deterioration in global trade and investment flows. Stringent containment measures resulted in a sharp decline in economic and trade activities. Concurrent demand and supply shocks impacted the global logistics ecosystem, resulting in significant disruptions that forced governments to announce stimulus measures.

The dramatic contraction in Chinese output has hampered the global manufacturing supply chain, reducing the cargo volume in the major ports of China and increasing bottlenecks in the domestic road freight transport. Industries that rely on the Chinese supply base for intermediate and finished products, with lean and just-in-time inventory models, are expected to shift their production logistics using near-shoring by increasing inventories to warehouses in their domestic markets.

Shutdowns have led to supply shortages, and the pandemic is taking a toll on the global maritime segments, from oil tankers to container lines. Container movement in the transatlantic and transpacific trade lanes has contracted, with China’s manufacturing shutdown and sudden recession conditions in North America and Europe. The backlog of delayed orders, port calls, and blank sailings have escalated volume pressures on the containerized supply chain.

The air freight industry has been a vital partner in keeping the global supply chain functioning for critical and time-bound shipments. While COVID-19 spreads around the world, air carriers have grounded their fleets in response to plummeting demand and travel restrictions. The fall in global air cargo demand has been partly offset by increased demand for air shipments of critical relief supplies and other intermediate goods.
With severe capacity constraints, air carriers are spot rating all shipments, and the rates are expected to rise with demand. Further, the US ban on passenger flights on the transatlantic route is expected to impact the belly cargo capacity.

The outbreak has shown the industry how delicate the supply chain has become. During this difficult time, it is essential for logistics companies to have an immediate focus on enabling end-to-end visibility, agility, improve operational excellence, process flexibility, and collaboration to support their customers in anticipating disruptions and mitigating the respective impacts.

In the long term, robotics systems for warehouse operations, SaaS platforms for transportation management and control tower operations, and artificial intelligence-powered technology platforms for customer management will allow logistics companies to anticipate supply chain risk and promote sustainability goals with enhanced operational efficiency.

Author: Senthil Kumar Subbiah

RESEARCH: INFOGRAPHIC

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Table of Contents

Executive Summary—Recent Developments

Executive Summary—Freight Market Trends

Executive Summary—Regional Trends

Executive Summary—Supply Chain Disruptions

Executive Summary—Supply Chain Disruptions (continued)

Executive Summary—Business Mitigation Strategies

Executive Summary—Growth Opportunities

Research Scope and Methodology

Logistics Industry Segments

Key Questions this Study will Answer

COVID-19 Outbreak—A Snapshot

COVID-19: Significant Impact Beyond China

Government Response to COVID-19: Americas and Europe

Government Response to COVID-19: Middle East

Government Response to COVID-19: Asia-Pacific

Forces Shaping the Business Ecosystem

China has Emerged as a Major Source of Imports

China is Well-Integrated with the Global Value Chain

Economic Stimulus Measures

COVID-19 Impact on World GDP Growth

COVID-19 Impact on Key Regions and Countries

Impact of Various Global Crisis on Global Trade

Supply Chain Disruptions and Trade Dependencies

Economic Cycles and Seaborne Freight Volume

Ocean Freight Capacity Constraints

Ocean Freight Capacity Constraints (continued)

COVID-19 Outbreak—Disruptions in Air Freight

Air Freight Growth Trends

Air Freight Capacity Under Severe Strain

Europe-China Rail and Freight Demand

COVID-19 Impact and Measures: North America

COVID-19 Impact and Measures: Europe

COVID-19 Impact and Measures: Asia-Pacific

COVID-19 Impact and Measures: Middle East

COVID-19 Impact on Industries

Disruptions in the Automotive Value Chain

Disruptions in the Healthcare Value Chain

Disruptions in the Manufacturing Value Chain

Disruptions in the Retail Value Chain

Disruptions in the Chemicals Value Chain

Disruptions in the Food Processing Value Chain

Disruptions in the Electronics Value Chain

Disruptions in the Energy Value Chain

Disruptions in the ICT Value Chain

Supply Chain Disruptions and Digitalization

Key Challenges

Supply Chain Disruptions and Trade Dependencies

Global Economy and Logistics Industry

A Framework for Risk Mitigation

COVID-19 Responses in the Transport and Logistics Industry—Respond, Recover, and Thrive

Risk Mitigation Strategies for Logistics Service Providers

Transformations to Embrace

Growth Opportunity 1: Sharing Economy for Collaborative Operation

Growth Opportunity 1: Sharing Economy for Collaborative Operation (continued)

Growth Opportunity 2: Agile and Flexible Logistics Solutions

Growth Opportunity 2: Agile and Flexible Logistics Solutions (continued)

Growth Opportunity 3: Exercising Alternate Delivery Models

Growth Opportunity 3: Exercising Alternate Delivery Models (continued)

Growth Opportunity 4: Digital Tools for Customer Engagement

Growth Opportunity 4: Digital Tools for Customer Engagement (continued)

Growth Opportunity 5: Fleet Conversion for Capacity Challenges

Growth Opportunity 5: Fleet Conversion for Capacity Challenges (continued)

Companies to Action

About the Growth Pipeline Engine™

Next Steps

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Related Research
The global logistics industry had a turbulent 2019, registering 1.2% in merchandise trade volume growth due to the stagnant global economy, trade disputes, geopolitical uncertainties, and environmental regulations. In Q1 2020, the COVID-19 outbreak flipped the growth switch in every area of the economy, and the global supply chain is no exception. As the global economy grapples with the pandemic, its impact on global trade and the supply chain is mounting with rapid deterioration in global trade and investment flows. Stringent containment measures resulted in a sharp decline in economic and trade activities. Concurrent demand and supply shocks impacted the global logistics ecosystem, resulting in significant disruptions that forced governments to announce stimulus measures. The dramatic contraction in Chinese output has hampered the global manufacturing supply chain, reducing the cargo volume in the major ports of China and increasing bottlenecks in the domestic road freight transport. Industries that rely on the Chinese supply base for intermediate and finished products, with lean and just-in-time inventory models, are expected to shift their production logistics using near-shoring by increasing inventories to warehouses in their domestic markets. Shutdowns have led to supply shortages, and the pandemic is taking a toll on the global maritime segments, from oil tankers to container lines. Container movement in the transatlantic and transpacific trade lanes has contracted, with China’s manufacturing shutdown and sudden recession conditions in North America and Europe. The backlog of delayed orders, port calls, and blank sailings have escalated volume pressures on the containerized supply chain. The air freight industry has been a vital partner in keeping the global supply chain functioning for critical and time-bound shipments. While COVID-19 spreads around the world, air carriers have grounded their fleets in response to plummeting demand and travel restrictions. The fall in global air cargo demand has been partly offset by increased demand for air shipments of critical relief supplies and other intermediate goods. With severe capacity constraints, air carriers are spot rating all shipments, and the rates are expected to rise with demand. Further, the US ban on passenger flights on the transatlantic route is expected to impact the belly cargo capacity. The outbreak has shown the industry how delicate the supply chain has become. During this difficult time, it is essential for logistics companies to have an immediate focus on enabling end-to-end visibility, agility, improve operational excellence, process flexibility, and collaboration to support their customers in anticipating disruptions and mitigating the respective impacts. In the long term, robotics systems for warehouse operations, SaaS platforms for transportation management and control tower operations, and artificial intelligence-powered technology platforms for customer management will allow logistics companies to anticipate supply chain risk and promote sustainability goals with enhanced operational efficiency. Author: Senthil Kumar Subbiah
More Information
No Index No
Podcast No
Author Senthil Kumar
Industries Transportation and Logistics
WIP Number PB23-01-00-00-00
Is Prebook No
GPS Codes 9800-A6,9B01-A6,9674-A6,9694,9968-A6,9965-A6,9AF6-A6