Navigating supply chain disruptions under COVID-19

The coronavirus has disrupted the world in an unprecedented manner. Mere months ago, the novel coronavirus, as it was then called, was indeed novel, and perceived by many to be a localized outbreak. “Whew,” was the collective sigh of relief for many international business owners as decisive lockdowns seemed to bring the virus under control.

Fast forward to today where businesses, cities, and even whole countries have seen daily life as they know it grind to a halt. The widespread social and economic impact felt by big and small businesses alike is expected to persist for the next 12 months or even longer. Amid the pandemic today, even as businesses deal with near-term challenges, they need to also take the long view to prepare for the post-coronavirus world.

There is no telling how, or when the next black swan will arrive, but drawing lessons from the current crisis, businesses need to be able to adequately address the four biggest logistics challenges defining the landscape today: the closure of retail shops as a result of lockdowns, reduced airfreight capacity from virtually no passenger flights, shifts in e-commerce fulfillment, and production shifting offshore.

First, the closure of retail shops amid lockdowns and quarantines around the world. Once a nagging call for brick and mortar establishments to take steps toward click and mortar hybrid sales models has now become a deafening roar. From department store chains to the neighborhood sari-sari store, business-owners need to accelerate their pivot to digital channels to keep revenue streams flowing in the face of restrictions imposed by governments around the world. To be able to effectively operate and ship on e-commerce channels means ensuring that businesses have the right tools to support their consumers, allowing for greater visibility, flexibility, and automation.

Second, working around reduced air freight capacity. Border closures and restrictions on domestic travel have forced passenger airlines to ground their fleets, significantly reducing common carriage air freight capacity – up to half of all air freight previously traveled in the cargo holds of passenger airlines. However, the demand for air cargo space remains for various reasons, including increased demand for cross-border e-commerce, the restart of China’s industries, and perhaps more so now, the flow of critical goods and services including healthcare shipments.