COVID-19, Logistics Industry and Challenges: History
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Contributor:
Muhammad Saleem Sumbal
,
Waqas Ahmed
,
Huzeifa Shahzeb
,
Felix Chan

Transportation and logistics are the basic building blocks in the socio-economic development of a country. The pandemic altered the landscape of the transportation and logistics sector where organizations had to look for new technology-based solutions. Block chain and digital trucking are emerging concepts, which were further accelerated by COVID-19, to manage the challenges in the transportation and supply chain industry. 

  • logistics
  • transportation
  • COVID-19
  • sustainable strategies
  • challenges

1. Introduction

Transportation and logistics are the most important factors worldwide for economic development and for a country’s success [1][2]. In modern times, where technology is at the forefront in all fields of life, the transportation and logistics sector is also embracing technological solutions for enhanced performance [3]. This technology adoption was further fueled by the COVID-19 pandemic [4], specifically for developing economies [5]. COVID-19 brought additional challenges and added complexities in the transportation and logistics sector in developing economies. On one hand, there were concerns related to technological aspects, such as e-commerce and smart supply chain management [6], and, on the other hand, there were challenges faced by human resources (specifically crew involved) in the transportation industry of developing economies [7][8][9]. In the context of developing economies, several factors, such as a lack of investment and proficient policies, corruption, lack of technology adoption, inadequate resources and infrastructure, etc. [7][10][11][12], affect operations in the transportation industry. In addition, political reasons, natural disasters and market fluctuations [4] also have a profound impact on this sector. COVID-19 was one such disaster, which had a devastating impact on developing economies [13] with already weak and underdeveloped transportation and logistics infrastructure, as compared to developed economies. An important factor of concern is that COVID-19 impacted all places differently due to factors, such as working environments, resource availability, infrastructure and severity of the pandemic [14]. Hence, the role of context is very important to understand the challenges and strategies in certain perspectives such as a developing economy.

2. COVID-19 and Logistics Industry

The COVID-19 pandemic brought incredible difficulties to the logistics industry [15][16][17], including a sharp drop in logistics demand, disturbance of the logistics network and expansion in operational expenses and the number of loss-making ventures [10]. Post-pandemic, the logistics industry has grown quickly, prompting critical changes, such as demand for logistics, supply of logistics, logistics foundation or infrastructure, logistics information and logistics industry improvement and development [18]. The pandemic brought in the concept of contactless deliveries, which refers to a delivery process in which no physical contact exists between the driver, the customer and store or warehouse employees [19][20]. On one hand, contactless delivery focuses on the safety of staff, their wellbeing and the use of extra storage spaces, whereas, on the other hand, it requires more contactless offices; thus, the underlying fixed venture cost of the activity is higher than the previous methods, for example, the sanitization cost of delivery bundles and the development cost of contactless conveyance offices. As per data published by the CFLP (China federation of logistics and purchasing) on 20 May 2020, many logistics organizations suffered great losses due to these additional costs. Particularly, 57.6 percent of Small-Medium Enterprises were affected with losses [21]. Thus, the concept of contactless deliveries was of high importance during the pandemic and remains so today [19]. With respect to the global market, numerous nations shut their borders and international logistics was enormously limited. As the pandemic was progressively taken care of, worldwide transportation started again normally [5]. Smart logistics technology is a new driving force in the logistics industry, fueled by the COVID-19 outbreak. Smart logistics refers to a system, which involves the application of smart technologies and devices for decision making, analysis and the execution of logistic operations [22][23].

3. Challenges and Driving Forces in the Logistics Industry

Several supply chain challenges have been identified in the literature in relation to COVID-19 and post-pandemic circumstances. During COVID-19, organizations faced logistics issues, such as pressure from buyers on reducing delivery time, real-time forecasting complexities, bankruptcy of various partners, shortage of physical and financial resources, decrease in demand, layoffs of highly paid workers, employees’ demand for sustainability, changes in distribution networks, shortage of skilled manpower, slower productivity and payment withholding from buyers [24]. Covering various economic, social, technological, political and organizational aspects of the logistics sector, Eryarsoy et al. [25] identified challenges, such as trust issues, opportunism, dependency, competition, lack of knowledge, complex network coordination, complex system implementation, strategic management, financial and human resources, employees’ concerns, etc. During the pandemic era, the focus of the supply chain also shifted towards COVID-19 vaccines and related materials. The key challenges in this context were vaccination cost and lack of financial support, limited number of vaccine manufacturing companies, lack of accurate forecasting for vaccine demand, behavioral challenges, i.e., consumer unwillingness to vaccinate, inadequate positive vaccine marketing, unavailability of people for vaccine trials, lack of planning and scheduling, increase in acquisition lead time, cold chain storage challenges, vaccine temperature monitoring and control, organizational challenges, such as inadequate coordination, managing monitoring bodies and lack of correspondence between virtual supply chain members [26]. Pujawan et al. [27], in the same direction, identified the challenges in achieving optimized distribution, prioritization of social groups, manufacturing low-cost vaccines, temperature control in remote areas and less-developed regions, etc. In a developing-economy perspective, the highlighted supply chain challenges during the pandemic along with coping strategies are uncertainty of demand, inconsistent supply, scarcity of material, delivery delays, suboptimal substitute adoption, labor scarcity, suboptimal manufacturing, storage capacity constraints, delays, vehicle unavailability and last-mile delivery challenges [28]. The authors also identified long- and short-term strategies to overcome these challenges in terms of capabilities and supply and demand in supply chains and logistics.
The supply chain and logistics are regarded as a new stage of globalization, along with the concepts of regionalization or continentalization [2]. In this direction, there are important factors that lead to modern advancements and improvements in the transportation industry, especially logistics and the supply chain. With respect to China’s logistics industry, three main factors have been noticed, i.e., request pull, technology push and strategy support [3][29][30]. The role of technology is pivotal in this context. Smart logistics incorporates technology, such as Unmanned Aerial Vehicles (UAVs), savvy package storage spaces, cloud computing, block chain and AI, to execute operations and enhanced performance in the logistics industry [31][32]. Bigger economies, such as China, experienced changed patterns in five dimensions, i.e., logistics request, logistics supply, logistics framework, logistics information and logistics industry improvement [33]. Similar impacts can be expected in other parts of the world, including developing economies. The advent of new business models during COVID-19 broadened the logistics horizon. The concept of contactless deliveries will speed up the development of an ever-increasing number of contactless offices, for example, shrewd package storage spaces and conveyance robots/UAVs [34]. Recent studies indicate the need to develop frameworks to guarantee the adaptability of technology in order to speed up the processes and productivity in businesses [35][36][37]. In the case of developing economies, this research adds to the literature on workforce challenges and the adoption of technology in the logistics sector. The adoption of technology is important for the workforce to remain competitive and carry out operations in a better way. Weak technological infrastructure and unfamiliarity as well as a lack of training for the workforce can further enhance these barriers. Thus, this research aims to cover this perspective.

This entry is adapted from the peer-reviewed paper 10.3390/su152115224

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