More than 42 percent of logistics professionals surveyed last week said they expect their companies to make substantive changes to their supply chains in the wake of the COVID-19 pandemic, according to results of a report released Tuesday from the educational website Shipping and Freight Resource.
Among the changes companies indicated they will make as a result of the outbreak, 67 percent said they will invest in technology, 33 percent said they will hire new employees, 26 will purchase or lease assets, and 13 percent said they will make acquisitions.
“Navigating around and through the COVID-19 situation has left us all in uncharted waters, with 59.2 percent of responders indicating their operations were significantly affected,” Shipping and Freight Resource said in the report, which was commissioned by ocean freight visibility software provider Ocean Insights.
The study, which collected responses from 300 global shipping professionals, was designed to measure the effect of the pandemic around three key aspects: impact, preparedness, and recovery.
Just over a quarter — 27 percent — of respondents were beneficial cargo owners (BCOs), while 69 percent were third-party logistics providers (3PLs) of some kind, whether forwarders or non-vessel operating common carriers (NVOs). The remaining were industry professionals in other roles.
Transit delays and capacity hits
The COVID-19 pandemic has forced shippers to rethink their supplier networks, stage inventory to balance against current demand fluctuations, and lean on internal or 3PL-provided freight visibility solutions.
Another likely post-coronavirus impact is that companies that have been able to effectively adapt to work-from-home environments will lessen their reliance on physical offices, thus reducing fixed costs. One global forwarder told JOC.com this week it might reduce its leased office space as much as 30 to 40 percent once the pandemic has been resolved.
In terms of specific impacts identified by the study, 71.4 percent of respondents said they’ve seen freight volume decline, 60.9 percent have experienced transit delays, 49 percent have been hit by delays from port to customer, and 39.1 percent have struggled with a lack of international freight capacity.
With respect to communications with their shipping and supply chain partners, 35 percent experienced delayed communications, while 10 percent said they received “scarce” communications. A majority, 51 percent, reported receiving real-time, ongoing communications.
Most respondents said they were largely unprepared for the impact of the pandemic, with 54 percent somewhat prepared, 35 percent not well prepared at all, and 7 percent completely unprepared.
Thirty-seven percent have experienced a partial supply chain shutdown with significant freight delays, 36 percent had a few glitches that delayed freight by a few days, and 14 percent said their supply chain was able to “adapt with no problem.” Nine percent experienced a complete supply chain shutdown.
In terms of recovery, 44 percent expect a slow recovery, 38 percent a moderate recovery, 19 percent a fast recovery, and 2 percent expect the economy to fail to recover.