The Coronavirus’ Effect on the Transportation, Supply Chain & Logistics Industry

One of the most stunning business and economic effects of the Coronavirus era was a nearly instant shortage of the products, components and services that consumers and business managers often took for granted in the past. The global supply and logistics system quickly entered crisis mode, and the effects and needed changes are going to be felt over the next several years.

The initial shock was the way that many factories and other businesses closed their doors temporarily and sent their workers home out of fear of spreading the disease. While factories came to a stand-still, many workers began to modify their work habits so that they could be productive from their computers and telephones at home. Many people simply left the workforce and retired early, while others in service businesses lost their jobs at hotels, restaurants and similar establishments, and those who were able took other types of work or got by on unemployment compensation.

These home-bound consumers spent their money on home improvements, remodeling and supplies for home cooking, gardening and hobbies. These consumers also switched to shopping online for items they had historically purchased in-person in physical stores.

The end result was that demand for many types of goods exploded, while factories were generally working under capacity or trying to catch up from being closed for several weeks. A global shortage of goods and parts quickly developed—the supply chain was overwhelmed, while stores and factories were under supplied.

At the same time, transportation and logistics services were flummoxed. Soaring ecommerce placed unprecedented strains on warehouses and delivery systems. Shortages of workers and dock space quickly created immense log jams in ports, railways and trucking facilities.

This crisis, still in full swing in mid-2022, more than two years after the onset of the Coronavirus, will continue to bring very significant changes and challenges to the entire global supply chain and logistics system. At the same time, many types of manufacturing and production are slowly reshoring and diversifying. That is, companies are making changes in their purchasing, outsourcing and manufacturing networks in order to become less reliant on distant suppliers or suppliers clustered in only one or two nations, such as China. For example, U.S. firms are now exceedingly interested in manufacturing and purchasing to a greater extent in Mexico—much closer to home.

Airlines saw an immense slowdown in early 2020 and eventually a slow recovery by early 2021. In countries around the world, governments stepped up to subsidize airlines. In the U.S., many airlines conducted major layoffs starting October 1, 2020 when federal financial support under the CARES Act of 2020 ran out. American Airlines announced plans to cut 19,000 jobs at that time, including thousands of pilots and about 8,100 flight attendants. This is a huge shift from 2019, where the industry was concerned about a looming shortage of qualified pilots. By mid-2021, American announced plans to rehire large numbers of pilots, as a rebound in passengers occurred.

A number of airlines declared bankruptcy in the early months of 2020. Britain’s Flybe entered administration (a practice similar to bankruptcy) in March 2020, as did Trans States Airlines and Compass Airlines in the U.S. Also, Virgin Australia entered voluntary administration in April 2020 while Columbia’s Avianca and Chile’s Latam Airlines filed for bankruptcy in May. Aeromexico filed in July.

Companies curtailed business travel almost completely, as significant numbers of employees are working from home and meetings are happening virtually via telepresence sites such as Zoom. On the airline side, many analysts believe that business travel will be slower to recover than leisure travel and may never return to pre-Coronavirus levels. This lack of business travel has a painful effect on related sectors, such as meeting planners, convention centers, restaurants, airport operators and car rental firms. Those company traveler expense account funds are sorely missed.

The Coronavirus pandemic spurred innovation and adoption of robotics and other kinds of automation to meet the soaring demand in ecommerce shipments. Not only does technology speed up operations and lower costs, it also enables social distancing for human workers in warehouses

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Become a Plunkett Research Online subscriber to gain unlimited access to our massive amount of vital industry data and market research.

✔ 100,000 Industry Statistics
✔ 500 Industries Analyzed for Market Size, Profits and Forecasts
✔ 150,000 Industry Executives Profiled
✔ 25,000 Companies Profiled, Ranked and Analyzed
✔ 1,000 Vital Trends Analyzed, totaling 1,000,000 words

Learn More

The Coronavirus’ Effect on the Transportation, Supply Chain & Logistics Industry, Business and Industry Trends Analysis

A Representative List of Organizations that Have Used our Research and Products:

How to access Plunkett Research data.

What data challenge can we help you solve today?

Take a Tour

Contact

Testimonials