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Infrastructure Upgrades, Policy Reforms, and Digitization will Transform the Logistics Ecosystem
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COVID-19 has been a disruptive force across every industry. India is facing several challenges amid its own country-wide lockdown: labor shortages, cargo capacity challenges, a manufacturing slowdown, order delays and stuck shipments, and demand and supply shocks. India’s real gross domestic product (GDP) is at its lowest in 6 years because of the COVID-19 standstill adversely affecting consumption and investment in the Indian economy. The manufacturing halt has reduced demand for logistics services, which likely will result in downward pressure on prices across warehousing, freight, and logistics. With countries around the world imposing lockdowns, minimal export-import movements have amplified the crisis in the logistics space. Restriction of air travel and international flights globally has contributed to the slowdown in the movement of goods, and India’s lockdown brought first- and last-mile transportation and intermodal movement of goods to a standstill.A reduction in vessel capacity and equipment shortages related to disruptions has had a major impact on the intra-Asia trade lanes. A large drop in freight volumes has prompted major carriers to report service cancellations and delays, and blank sailings to and from India and the Middle East, Europe, and the Mediterranean. Aviation is one of the worst-affected segments. The Indian government has suspended all passenger flights, only allowing movement of cargo flights. Air carriers prioritize on transportation of essential cargo and critical pharma/medical equipment. Staff shortages and delays in clearance of cargo has resulted in congestion at airports. The Internet of Things, blockchain, 3D printing, and autonomous transportation have gained renewed interest as technologies that will help companies survive and thrive during a pandemic or another crisis.Frost & Sullivan has recognized multimodal logistics solutions, digital integration, flexible solution models, and warehousing infrastructure as other areas that are expected to present opportunities.
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