Impact Of COVID-19 On Logistics Sector


Posted July 22, 2020 by sumpaplogistics

The COVID-19 pandemic has shown what a crucial component the logistics sector is to the globe. As organizations seek to form their supply chains more effective, the adoption of digitization, mechanization and automation.

 
The COVID-19 pandemic has shown what a crucial component the logistics sector is to the globe. At the end of year 2020, e-commerce sales achieved record growth (US$ 39 billion in 2017 to US$ 120 billion in 2020), as organizations complied with coping in the challenging social and economic environment. As per to the Office for National Statistics, the last and first time online sales broke the US$ 2.54 billion was in December 2019. As organizations seek to form their supply chains more effective, the adoption of digitization, mechanization and automation into operations is becoming more popular.

Having handled the unusual global circumstances well, the logistics industry will have to monitor the forthcoming challenges that manufacturers face over the subsequent 12 months. This is all because of the current situation where the global demand for some products has decreased. It is predicted that in the short-term, this will hamper the industrial space to reach the record levels of occupational activity that were assumed in 2020.

It is predicted that online demand will surpass demand for warehouses. Buyers are thought to be more used to buying products online and occupiers must be able to acclimate accordingly, and will observe supply chain models reviewed in a bid to increase capacity.

Demand for urban logistics has significantly scaled over the past five years up until the outbreak of pandemic COVID-19. Due to the initial interruption, there was diminished activity for smaller distribution warehouses as some occupiers took a stop from their development plans. However, in spite of this, the market expanded as larger distribution warehouses reached 100,000sq.ft. It is expected that demand for units sized between 30,000sq.ft and 150,000sq.ft located in proximity to urban town areas, will back as businesses transformation from crisis management mode to future planning.

It is expected that last-mile logistics costs consist of around half as much of total shipping fees, while fulfilling online orders requires more than double the storage space required to supply the store network. Peak periods are becoming more uncertain and occupiers will be required finding scalable and versatile solutions throughout their complete supply chains. Some retailers’ conceit has left them disclosed to this shock and it is predicted that over the medium to long-term, demand for warehouse space will scale up in 2021.

Some consolidation of hypothesis will happen for those occupiers that are managing legacy issues of their distribution chain as they seek to make their supply chains more sharp, lean and effective. As a result, regional and national distribution centers will require more space and cubic capacity, with an increased use of racking, to facilitate a higher level of mechanization and automation. Over the upcoming few years, it is predicted that consumers will stay the driving force in the industry as innovations move uphold and demand remains robust. The key for developers, agents, landlords, town planners and occupiers to grasp these changes to assure the industrial and logistics sectors can extend to meet the needs of the evolving consumer landscape.
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Last Updated July 22, 2020