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COVID-19’s Looming Impact on Logistics

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The logistics industry has been facing quite a bit of upheaval lately. Now that ports are finally beginning to open again, even as inventory is beginning to move, some industry professionals still remain cautious that COVID-19 will only continue to impact the supply chain further.

Here’s a look at how COVID-19 is currently impacting the supply chain, and how we expect it to in the near future.

Shipment Backups

Ports across the world have been closed, which has been creating a significant backlog of inventory throughout essentially all industries. As these ports open, businesses rush to ship their goods, but they must compete against each other to accomplish that.

TOC is utilizing Foreign Trade Zones (FTZs) close to these ports to store inventory until the port is ready to go. That means that rather than shipping from the point of origin, goods can be sent from the FTZ directly to the port, which can cut down on time spent waiting.

As more ports close and open throughout the world in response to the pandemic, this practice will only become more crucial, especially for the transportation of personal protective equipment (PPE) and other necessary goods.

Supply Chain Disruptions

As inventory swells and routes change, carriers only have so many options to address the rising demand. This means the logistics industry will likely see a rise in tactics like blank sailings.

Steamship lines work together to operate a fixed sailing schedule that visits ports in what they call a “string.” A blanked sailing is a planned hole in this string. This is useful for the carriers because it means they can sell capacity more effectively to businesses in need of their services.

However, for supply chains, this can cause an issue, since destinations may no longer be visited as frequently as they were before. This means that even if the original port opens, it may be difficult to secure space on a freight option that visits the destination that a shipper needs.

Blanked sailings are currently scheduled out through September, and we anticipate that this practice will continue as COVID-19 sweeps across the globe.

 

Stay up to date on the most recent news by checking out our Market Advisories. If you need a 3PL to help you get your goods shipped efficiently, get in touch. We’d love to help you avoid as many disruptions to your supply chain as possible.

 

 

 

18 Jun, 20

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