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How Hard did COVID-19 Hit the Logistics Industry?

May 25, 2020

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Quarantine, social distancing, work from home, malls and theatres shut down, complexes closed – It is as if the deadly Coronavirus froze everything. It even ruptured the lifelines of logistics. But How hard did COVID-19 hit the logistics industry?

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With increased stipulations on vehicle movement except for essential commodities, many businesses have come to a standstill. Domestic airports are empty and just cargo flights in action. Only trucks containing essential commodities allowed to move. This situation has been going on like this for more than two-three months now. And the logistics business is feeling the pinch rather hard.

The Current Scenario

As of the third week of May, UAE still has mobility restrictions. Air Freight continues only to selected destinations. The freight capacity has been increased but then terminal acceptance and general cargo import delivery is only up to 6 PM. So, this is causing delays in deliveries.

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As for the sea freight, major shipping lines are skipping sailings due to lack of supply. It is causing a lot of disruptions in the delivery services. As for the trucking services, the borders between UAE and Saudi Arabia and Oman are still open. But then there are health and customs clearance on the way that delay the travel time.

The immigration offices in the UAE as closed as of now. So, no new visas are given. This means, that only drivers who have a valid visa will be able to drive. Secondly, new regulations have been released in Saudi Arabia. According to the new regulation, all trucks that come to the country need to release the trailers to Saudi Arabian transporters. This new development has become a huge challenge for logistics companies and fleet owners.

The UAE government has established all the regulations to ensure the highest safety for everyone involved. There are a lot of delays in every step of the transportation process. The extra time and money spent is affecting the bottom line. At the same time, orders are less. This means that the logistics companies and transporters are being hit on both sides.

Employees at Risk of Losing Jobs

It is not just the logistics companies that are badly hit because of the pandemic. The employees are also suffering. According to the IATA, more than 1.2 million jobs in the regional aviation sector are at risk because of this pandemic. Emirates, the world’s largest international airline, encouraged its staff to take leave. Many other logistics companies have had to drop staff to counter the increasing losses.

International Supply Chain Breaks

The international supply chain was disrupted because of the COVID outbreak in China. Most of the raw materials for many companies across the world are sourced from China. UAE airlines play a major role in transporting supply materials from China to the rest of the world. Currently, the pandemic has put a pause on the entire process.

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Revenue Drops

A major effect of the corona pandemic on the logistics business is a huge drop in revenue. UAE is home to large airlines such as the Emirates, Air Arabia, and Etihad Airways. Air transport brings in a huge chunk of revenue to the country. According to the International Air Transport Association, the revenue generated by air transportation in 2019 was $19.3 billion, which consisted of up to 5% of the nation’s GDP. However, now with the world fighting against this disease, travel has become almost nil. Also, airlines need to content with cancellations and refunds, which will further affect their bottom line.

Tackling Transportations Solutions in the Lockdown

Even as the logistics sector is struggling with the effects of the Corona pandemic and the subsequent lockdown, many companies are suggesting innovative solutions. At this point, there is no use focusing on the negatives and the if only’s. The best thing would be to see how the entire logistics industry can work together to overcome this problem.

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It is time to make the optimum use of a fleet management system. Fleet owners can use a unified system to identify drivers’ locations and check if they can take up the run. Second, the application can also be programmed to provide updated route details based on the spread of the pandemic. Thirdly, the app can help the fleet owners keep in touch with the drivers at all times and ensure their safety.

A crisis can help bring about an effective solution. Yes, COVID-19 Hit the Logistics Industry very badly. But, with the cooperation and use of technology, we can overcome the challenges and get back on the road to profitability. You can send an email to sales@fleetmanagement.ae to know how you can make effective use of the fleet management system to improve fleet performance and reduce unnecessary expenses.