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HomeTopicsCOVID-19Impact of Covid-19 Pandemic on IKEA Logistics and Transport

Impact of Covid-19 Pandemic on IKEA Logistics and Transport

The impact of COVID-19 has led to a need for IKEA companies to rethink and revamp their supply chain logistics management. IKEA retailers were forced to temporarily close some stores. For example, in Europe. In France, Israel, Ireland, the Czech Republic, Slovakia, Belgium and the United Kingdom, about one tenth of IKEA stores were closed. In addition, at the peak of Covid-19 in April 2020, about three-quarters of IKEA’s 450 stores closed – an average of seven weeks each. IKEA Company has been greatly affected by the coronavirus pandemic as far as logistics and transport are concerned. Ideally, as people were driven home by the Covid-19 pandemic, it was a boom for the Swedish retailer IKEA since there was increased demand for household goods. However, this was not trouble-free, and many of the company’s product lines went unavailable. Notably, IKEA has been struggling with supply chain problems due to a shortage of drivers since the emergence of the covid-19 pandemic. Arguably, the shortage of products such as mattresses at some stores was due to the Covid-19 pandemic. According to the IKEA manager, all the 22 stores in UK and Ireland have been having supply problems with up to 10% of their stock which amounts to around 1000 product lines failing to survive in the market (Alaouir & Orahem, 2021). Ideally, like many retailers, IKEA is experiencing ongoing challenges with its supply chain due to the coronavirus pandemic, which has resulted in a shortage of labor, challenges in transport, and the acquisition of raw materials. However, there has been an increased customer demand since many people are now spending more time at home.

Essentially, what IKEA Company is experiencing is a perfect storm of challenges including disruption of global trade flows and shortage of drivers which has been significantly caused by the Covid-19 pandemic. More specifically, there has been a disruption in the global container shipping in the industry due to the pandemic which has caused a shortage of lorry drivers. According to Kullnig (2020), there is a shortage of more than 100000 drivers in the UK. Arguably, during the coronavirus pandemic as travel restrictions were imposed many lorry drivers from Europe went home to their own countries, and then decided to seek jobs elsewhere. Moreover, the tax changes on drivers also increased which made it more expensive for foreign drivers to work in the UK. Notably, logistics firms have been seen requesting the government to allow temporary work visas for Lories in the short term to help the company alleviate the problem. Nonetheless, the government has always insisted that companies must do more to get more UK drivers. According to Kullnig (2020), during the last year, IKEA company shipped more volumes of its products than compared to this year after the pandemic disrupted the transport sector.

In conclusion, the furniture stores like IKEA are not the only ones impacted by the Covid-19 pandemic, especially in UK and Ireland, where trade and transport issues have been a challenge. Nonetheless, IKEA Company can take other remedies to ensure that they mitigate the challenge. First, I believe that IKEA Company is experiencing transport issues since it has in the past depended on foreign drivers. Therefore, if the company can change and start training drivers from the UK, this problem can get solved. Even with the continued impact of COVID-19 and the unknown future, IKEA has set itself up with a strong base by building an efficiency and sustainable supply chain. IKEA’s supply chain channel has helped the company’s production as well as logistics through the current crisis and any difficulties that may be coming up in the next few years.

Authored by: Xiaoyang Hou

References:

https://www.ft.com/content/e121a060-1ddd-4b9f-9019-ab65e91c88c5

Alaouir, T., & Orahem Gorge, E. (2021). Investigating Inventory Management Strategies Within Food Cold-Chain During Crises: Case Study on IKEA Food.https://www.diva-portal.org/smash/record.jsf?pid=diva2:1575531

Kullnig, I. (2020). The Image of IKEA’s Online Portals in Times of COVID19 With Regards to its CSR and Experiential Marketing-Exemplified by IKEA Austria.https://www.diva-portal.org/smash/record.jsf?pid=diva2:1482601

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