disruption

With the Covid-19 outbreak, a fundamental but unpredictable risk to the logistics industry has shown up. For many countries and companies, keeping up with the market has been nothing short of difficult and uncertain. The challenge Covid-19 presents has forced industry leaders to rethink the way forward and this includes analysing the risks and challenges of the supply chain in order to get back to business as usual.

take risksSupply Chain Risks and Challenges

According to Accenture, the pandemic has brought a new type of consumer to the market and while the demand for fast supply and delivery has increased, routes to markets have been blocked sporadically for unknown periods. Due to this, supply chains are becoming more costly and stakeholders expectations are not being met. The industry itself cannot hold onto sustainable agreements. To examine the impact of the Covid-19 pandemic on the logistics industry and its potential for the future, Cushman & Wakefield, a leading global real estate services firm, has released its 2021 Global Logistics Outlook. The report discusses the key drivers affecting growth, global leasing dynamics and provides an outlook for the logistics sector. According to the report, these key changes have been drawn out for each region.

 

 

APAC

The Asian Pacific regional market has shown to be resilient. Out of the 34 key markets covered within Asia Pacific, the status quo has largely been maintained year-to-date, with only Singapore showing any real change to potentially becoming more tenant friendly, although this is restricted to certain parts of the industrial market, despite the pressure of a weakening export demand.

APAC

This is a major difference to the office sector within the region, which has seen a much more definitive shift towards being more tenant-friendly. In China, the logistics industry as a whole has seen a 2.5% increase due to new consumer demands and the rise in online shopping. The table below (which can also be found here) puts this into perspective:

Logistic Table

EMEA

Europe’s logistics sector is said to be struggling with supply constraints, stemming from a combination of a lack of developable land and strict planning regimes. Lisa Graham, Head of EMEA Industrial Research for Cushman & Wakefield, explains that, “In contrast to the pre-Global Financial Crisis (GFC) when speculative development represented roughly 80% of new construction, post-GFC has been characterised by predominantly ‘built-to-suit’ development that has led to severe supply shortages in most of Europe’s core logistics markets. As speculative construction resumed post-lockdowns, more product came to market, pent up demand was released and leasing activity accelerated.”

Truck in Road

North America

Proving to be one of the strongest markets, the North American market experienced growth despite the pandemic and other local disruptions to the industry due to hurricanes and wildfires.

But how do we address this issue and overcome it?

Construction MenFive Key Ways to Address Covid-19’s Impact on Logistics

  1. Improving visibility into operations.
  2. Increasing flexibility of inventory and assets to balance supply and demand.
  3. Communicating effectively with onsite and remote employees, suppliers, carriers and customers.
  4. Supporting the labour force by protecting the wellbeing of workers within the supply chain as well as that of the logistics staff.
  5. Being creative in your approach to understanding how to find resolution to the issue at hand and how to address it moving forward.

Conclusion

The pandemic has set a hurdle in all industries, but the world depends on the logistics industry to stay afloat. It’s imperative that these hurdles be overcome as best as possible. To read more about the ways in which logistic companies and leaders can improve their approach into delivering better, despite what the pandemic has presented, click here.