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Covid-19’s Impact on Transportation Sector

Throughout the course of the Covid-19 pandemic, the global supply chain networks have faced a lot of new challenges. In particular, the logistics and transportation sectors have come across new and unique challenges such as changes in consumer demands which have backed up manufacturers in the short term. While nearly every industry was affected by Covid-19 in some shape or form, the disruptions to the transportation sector in particular have left some of the most profound changes to how businesses and consumers operate. These new transportation problems are not unique to the United States either but are happening globally as well.

Within the transportation management problem of drastic shifts in consumer demand as well as manufacturer backups, a specific disruption came from the transportation of goods. The transportation and movement of goods across the country and globe has been impacted greatly. This can be attributed to a multitude of reasons; some being said changes in consumer demands, others being safety and precautionary measures being taken that reconstruct the pre-existing transportation process. All these changes have scrambled where and when resources are available for manufacturers, transporters, retailers, and consumers. When the Covid-19 pandemic began, consumer demand shifted toward essential goods. These essential goods included groceries, medical supplies, disinfectants, and other necessary goods. This way to prepare for what was to come of the virus, as well as the stay-at-home orders. Because of this shift in demand, manufacturers could no longer keep up in the short term. The transportation outlets that deliver these goods both domestically and abroad were ready to ship, however they did not have the product because manufacturers were busy adjusting to the demand. Even when they were provided with the cargo to transport, many countries restricted their domestic and international trade with border closures. Moreover, manufacturers and other companies within the supply chain were working internally to take the proper precautions to protect the health of their employees from a virus that was dangerous and not understood. Some of these precautions included sending employees to work remotely or in many cases releasing the employees from their job completely. This led to understaffed businesses working in unfamiliar circumstances which helped contribute to the longer lead times of essential goods being transported.

The previously stated disruptions to the transportation sector of supply chains from Covid-19 has resulted in many changes to both the industry and to the consumer. Some of the effects remained in the short term while others remain and will continue to reshape how the transportation management sector operates to this day and into the future. In the short term, when manufacturers were backed up and the demand for essential goods skyrocketed, shortages and price fluctuations appeared. Grocery stores started to empty out and prices increased drastically. Food such as meat, eggs, and dairy products quickly became limited and expensive. Even products like toilet paper and hand sanitizer were selling at record high prices. In comparison to prices in August of 2019 versus August 2020, prices for food products increased 5.5% globally. Furthermore, grocery stores even set regulations such as: “one per customer” when it came to certain products. In the big picture, transportation revenue fell drastically, reducing wages which led to the firing of transport employees. Employees that remained were subject to working excessive hours, understaffed. When the demand became primarily for essential goods, the manufacturers and transportation workers were halted from sending cargo to other industries that were not essential. The primary focus of the transportation sector becomes what the consumer demands. This dries up resources to non-essential businesses and can run them out of business. High consumer demand increased air cargo drastically during the Covid-19 pandemic. Essential goods were being flown across the globe to where they were needed. Masks and eventually vaccines were needed in parts of the world that weren’t manufacturing them. Passenger planes were even being uniquely retrofitted to carry lightweight cargo like masks and other goods.

In conclusion, the Covid-19 pandemic has led to a lot of changes to the transportation sector of the supply chain industry. Some of these changes were temporary, such as consumer driven price fluctuations or manufacturer backups. On the other hand, some of these changes are certain to remain in the long term. Companies learned ways to perform operations with a strict cost-efficient perspective that will be carried out into the future. The transport companies that remain today are those that adapted to the challenges they were faced with. With stay-at-home orders and social distancing rules in effect, many businesses moved online as opposed to in person. This changes how the transportation sector operates as well. Predominantly online businesses like Amazon thrived during Covid-19 and will change the logistics of when, where, and how goods are transported to consumers. As the pandemic continues, companies are still adapting to new challenges and changing the future of what logistics and transportation management looks like.

Authored by: Jack Beck

References:

“Covid-19 Is Driving up Food Prices All over the World.” ILOSTAT, 9 Dec. 2020, https://ilostat.ilo.org/covid-19-is-driving-up-food-prices-all-over-the-world/.

“Impact of the Covid19 on the Transport Industry Research Paper.” Ituc-Csi.org, Arab Trade Union Confederation, Dec. 2020, https://www.ituc-csi.org/IMG/pdf/impact_of_covid-19_on_tranportation.pdf

“Understanding Covid-19’s Impact on the Transportation Industry.” MehaffyWeber, 7 Dec. 2020, http://www.mehaffyweber.com/news/understanding-covid-19s-impact-on-the-transportation-industry/.

 

 

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