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COVID-19 Accelerates Innovation in Supply Chain Industry

Realigning Supply Chain Industry, Post-COVID-19
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The world has evolved in recent months as mankind has been hit by the coronavirus epidemic. We thought little of the virus, and were probably shocked by its spread, then panicked into lockdowns in order to draw an approach to live with it until we invent a vaccine to get rid of deadly disease. During this time there have been shifts in the ways we conduct business, educate young members of the society, cure the ill, and keep the unstoppable wheels of supply chain moving. The supply chain sector has demonstrated incredible resilience and ability to evolve in the midst of the COVID-19 epidemic. While most sectors have come to a standstill, retail has suffered loss on a massive scale, the logistics sector has continued to thrive to support the movement of healthcare equipment, drugs, food and consumer goods across the globe.

The gradual shift towards e-commerce has accelerated as more of us now order online instead of going out. Logistics providers, who are being overwhelmed, have continued to keep up with the dramatic increase in demand from online orders. Supply chain and logistics management will see massive disruptions over the coming years due to efficiencies at ports, road borders, shipping lines, and impact on manufacturing and distribution businesses.

Innovation in Road Freight

Innovation is at an inflection point for the supply chain and logistics sector. Businesses and teams that are able to technologically advance and adapt will end up being the pioneers of tomorrow and disrupt traditional businesses permanently. Technology will drive the following functions faster than it has ever done. More and more businesses, consumers and supply chain participants will now move towards digitization of the processes and business functions. Several companies have been pushing towards paperless transactions this will now further accelerate.

There has been significant loss amidst the pandemic and the impact has made businesses more price sensitive. This will further give a lift to digital platforms that aim to create solutions based on efficiencies through shared economy standards.

Supply Chain COVID-19 Innovations

Logistics providers, who are being overwhelmed, have continued to keep up with the dramatic increase in demand from online orders.

Automation on various tiers of the supply chain industry is one thing to look out for. Businesses must address the upgrade required to survive in a post-pandemic world. The innovation needs to be created from ground-up, adapted and implemented for workers at every level of the supply chain and logistics industry.

The international freight forwarder industry is one of the most complex with regards to the number of parties involved in the shipment process. In order to enable innovation, robust structures for collaboration have to be created with all the parties involved namely, port authorities, customs, clients, transporters, shipping lines, stakeholders and even regulator. Several businesses in the supply chain and management industry are now moving forward with multiple collaborations.

All the tech stuff of new age innovation like AI, ML (Machine Learning), Blockchain, IoT and other technological innovations must be applied in the freight and logistics industry. Businesses must take advantage of innovations in autonomous vehicles in order to developed commercial trucks that are much faster and safer than cars.

Impact of Innovation

Across the globe, businesses in the supply chain industry should deal a twofold effect of Covid-19 and low oil costs. As urban communities and locales come out of lock-downs, there is consistent pressure on the health care infrastructure of our society and several businesses will need to learn to operate at lower outputs. Global supply chain and logistics management infrastructure spend along with government backed projects might now face a lag results in substantial impacts on sectors connected to the supply chain industry. As a result, every sector will need to shift to cost saving mode.

Technology-reliant businesses in the supply chain sector must be adequately financed to capture market share that will not only benefit and accelerate their growth. Even the most traditional businesses have recovered since March 2020 as the supply chain industry is recovering from lockdown. However, small business owners involved in the international cargo movement will continue to operate at a loss due to border closures.

The losses faced by global transporters have been intense as their jobs have been replaced or cut due to COVID-19 pandemic. Businesses are starting to realize that they must use their trucks for other projects and lanes within their country including for port movements, especially as their partners have started moving cargo by sea due to restrictions on lands and the massive price increase for international road freight. It is estimated that road borders will begin to relax from July 2020 and the sector will witness a V-shared recovery (as seen in the banking sector) as they continue to cater to large volumes of cargo waiting to be moved due to the increased demand in the second quarter of 2020.

The road freight sector is not integrated across cities, state, countries or even across the world. There are hundreds of thousands of individual owner operators, along with similar mini labyrinths in the business. The full truck load (FTL) sector is highly competitive but is missing analytical information in its everyday operations. Large fleet owners make less than 5% of the total supply chain of trucks. Moreover, they also control long term contracts with large enterprise businesses. Meanwhile, small fleet owners and single owner operators continue to work as sub contractors to support the supply chain ecosystem made up of freight forwarders and other brokers.

Digitized platforms are now disrupting the industry at an unprecedented rate. This has helped empower small businesses and proprietors with sophisticated tools and technology that can support their clientele with standard service quality and competitive pricing.

The innovation takes into consideration fundamentally less complex operations and the ability to scale across markets and geographies. Businesses in the supply chain sector continually automate their operations while also keeping up with the demand and capacity for addressing every minor hiccup in the process. Here, the focus lies in the execution process. Technology, especially automation, can help the supply chain and logistics industry with not just operational and process excellence but also in cost-saving.

Businesses are now investing heavily into the supply chain infrastructure to cope with future challenges. In the coming months, several major businesses will be announcing major investments focused on the driver welfare and infrastructure for cargo safety and security. Industry leaders in freight platforms are keen on transforming the unorganized sector into a standardized, reliable and optimized platform with significant commercial and environmental wins in the future.

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