The COVID-19 pandemic and resulting e-commerce boom have driven -logistics companies to look again at their systems and operations. The rise in freight volume, coupled with the dramatic drop in passenger air travel, has disrupted supply chains and forced some air freight to move into containerized sea freight. This added volume and cost pressure on traditional bulk and containerized supply chains was further driven by an increase in goods-based consumption.
The rapid rise in durable goods demand driven by government lockdowns has forced carriers to increase capacity. A recent example of this is the severe chip shortages due to a combination of increased demand and longer lag times in the supply chain. However, with additional sea and air freight capacity expected to come online, there will be a softening of the very tight international freight market.
Everyone expects a gradual return to normality, but that new normal will be very different from the pre-pandemic world. Logistics providers will need to implement strategies that mitigate the risks of disruption and higher costs while ensuring their businesses are efficient, productive, and capable of operating under new hybrid office/work-from-home models.
There is clear recognition among shippers that optimization and efficiency are critical to managing supply chains in the post-COVID-19 normal, evidenced in 2021 by increased usage of the CargoWise system; new customer sales; the lift in volumes per operator among WiseTech customers; and a drop in IT-related costs as major global CargoWise customers came onboard.
The industry has also become aware of the costs, pain, and -difficult-to-control cyber risks of leaving legacy technology in place, particularly now that it has been forced out of closed office networks into an internet-connected, remote-working or hybrid environment.
In this new world, logistics providers will be under increased pressure to deliver more streamlined services that are digital, accessible, and globally scalable, requiring true digitalization of their processes.