March 30th, 2021
Working with Covid – One Year On
Signs of Spring Hope as 2021 Lockdowns Ease
As the now-distant memory of 2019 drew to a close and 2020 unfolded, the world faced the threat of a completely new virus – COVID-19. As we all began to find our way through a wholly new and tough set of challenges within our personal and working lives, many British industries were at the forefront of the pandemic, facing it head-on.
Of course, many of us wouldn’t be here today if it weren’t for the frontline heroes of the NHS, supported by those across all major logistics sectors over the past twelve months.
As we now mark one year on since the very first lockdown began, we’re going to cover how some of our key partner industries here at RollPallet UK have been affected by the pandemic, to find out more about the reflections that happened during this time.
Let’s get started.
Food Distribution Industry
First up, the food distribution industry. The COVID-19 pandemic has overwhelmed the industry with unprecedented stresses on food supply chains, with bottlenecks in farm labour, processing, transportation and logistics, as well as meaningful shifts in demand.
Most disruptions are results of government policies forced upon the industry in order to contain the spread of the virus. However, the food distribution industry has demonstrated remarkable resilience in the face of stress.
Supermarket shelves were replenished over time, as stockpiling behaviour became a thing of the past. Supply chains responded well to the increased demand. Long lines at the borders also disappeared quickly as the unnecessary restrictions due to Brexit became alleviated.
Sure, the impacts of COVID-19 on the food distribution industry are still unfolding, and it will continue to do so for quite some time. However, the experience so far shows us the importance of an open and predictable international trade environment to ensure food can move freely to where it’s needed most.
Now, the pandemic one year on showed us that the most significant risk for food security is not with food availability, but with consumers’ access to food. The industry now knows that safety nets are essential to avoid an increase in hunger and food insecurity.
3PL and Logistics Operators
The pandemic impact on logistic and 3PL operators has been significant. Let’s face it; logistic operators are an integral part of value chains, both within and across international borders. They exist to facilitate trade and commerce to help businesses get their products to customers, and in turn, get the customers what they need. Supply chain disruptions to the sector caused by the pandemic has, therefore, impacted competitiveness, economic growth, and job creation.
This wasn’t just in the UK; in fact, like the pandemic, it all started in China. As disruptions to manufacturing in China rippled through global supply chains, cargo became backlogged at China’s major ports. Travel restrictions led to a shortage of truck drivers, and ocean carriers trips were cancelled. The results showed a lack of components from China began to impact logistic industries around the world.
One year on, we see that for the most part, governments have responded to the crisis by designating ports, shipping, and trucks services as essential – thus meaning that they became exempt from any lockdown measures taken.
Whilst many airports around the world closed to passenger flights, most still opened to cargo – which was essential to the covid-19 response.
There are now closer collaborations between governments and 3PL logistic companies that were essential to address the supply chain bottleneck and facilitate clearances.
The pandemic impact on logistics pushed 3PL logistic companies to adopt a range of responses. One year on, this is now what we’re looking at:
- New safety protocols: To guard their staff’s health, some companies have introduced new protocols on social distancing to ensure warehouse safety, sanitising work areas, or granting protective gear, while giving staff unlimited unpaid time off.
- Alternative modes of transport: The pandemic impact on logistics created the use of alternatives to their go-to transport modes. Since passenger flights have reduced airplane belly cargo capacity, companies such as DHL have used charter flights to transport shipments to and from China.
- Adapting service offerings to current demand and safety protocols: Some more prominent players have been executing a vital role. For example, UPS provided free air transport for two million masks and protective gear to Wuhan in February.
Hospitality and Events Sectors
One of the first to feel the pandemic’s devastating impacts was the hospitality and events industry. The global ties instilled within each business are far-reaching, and events with an international presence saw early warning signs that this wasn’t business as usual, as international attendees started pulling sponsorship and cancelling travel plans early in the year.
The pandemic impact on hospitality struck a blow. Businesses were battling event and hotel cancellations, whilst facing an entirely new way of working with takeout and delivery.
One year on, restaurants continue to shift to online orders, which earlier on in the year, had represented only a fraction of order volume before COVID-19. One year on, these orders have now become the primary revenue driver as business shifts entirely off-premises.
The pharmaceutical industry, although not directly impacted by lockdowns, did see a decline. Like some of the industries listed above, restrictions on international travel exposed frailties in supply chains, and lockdowns prevented access to healthcare providers, ultimately cutting out critical care and prescription arrangement.
Put up against such strong headwinds, the pandemic impact on pharma was, again, not something to be taken lightly. With revenues drastically declining within the first second-quarter and first-half, something had to be done.
One year on, we see that the industry learned how to respond in kind; and they did so ever so smoothly. Pivoting to digital-led communications and more sophisticated logistics, distribution localising was supplied where it was possible, and revenues started to rise once again.
Postal and Courier Services
Although the pandemic accelerated the decline of letters, it massively grew the delivery of e-commerce parcels. Since everybody started shopping at home, this was the new way of life.
The pandemic impact on delivery companies caused it to dramatically scale-up because of all the demand. For many postal operators, it was Christmas-like peak time every day.
One year on, we see that the effects of this led to parcel volumes rising by up to a whopping 90%; however, we also took note of all the additional problems like huge capacities of staff being burned out, overwhelmed, and a decline in-service performance.
In addition to this, the pandemic made it clear just how much the postal network depends on the global transportation systems. With this in mind, we now see postal operators taking any challenges as an opportunity to evolve, adapt and speed up transformation.
Retail and Wholesale Industries
The pandemic impact on both B2C and B2B retail saw sales volumes fall by 1.9% at the beginning of 2020, compared to 2019. This was the most significant annual fall on record as of yet.
Consumer retail sectors have varied with clothing and fuel volume sales saw notable falls of negative 21.5% and negative 22.2% respectively in 2020.
Since then, the retail industry also took a step and moved entirely online deliveries. With this, their overall online sales rose to a record high of 33.9% as a share of all retail spending.
What’s Next for Your Business?
Covid has become synonymous with the ‘new normal’ for all of us and something of a buzz word in the world of logistics, and in businesses in general, given its huge impact on our daily lives.
Thankfully, with lockdowns gradually easing under the Government’s transition plan in the weeks and months ahead, life will resume as normal across the UK, Europe and globally as vaccination rates climb. It has most certainly been a challenging time for all of us – some more so than others – and the need for shared empathy, support and awareness of each other’s plight is at an all-time high as we emerge from this.
if you’d like to discuss the impact Covid is having on your business, please drop us a line today and we’d be more than happy to help advise how best you can ready yourself and your team as you prepare to tackle the new wave of uncertainty ahead.