Covid-19 Impact on Logistics Industry | Is it a Good Time to Start a Logistics Business?

Muskaan Kapoor Muskaan Kapoor
Jan 2, 2022 5 min read
Covid-19 Impact on Logistics Industry | Is it a Good Time to Start a Logistics Business?

The Covid19 pandemic turned the entire economy upside-down. The whole world faced its effects. People, their jobs, and businesses everything had to face the pandemic’s consequences.

Since the whole world got shut down, it affected various businesses. One such example here is the logistics firms.

These firms deal in storage, movement, and proper flow of goods. Logistics firms play a crucial role in connecting the companies with the market. Due to travel and other restrictions, this connection got disrupted.

Now, we are in the recovery stage and so are the logistics firms. The logistics with the help of technology can function at a normal pace, but is it a good time to start a logistics business in 2021?.

What is a Logistics Business?
Logistics Business and The Covid19 Pandemic
Problems faced by Logistics Startups During Pandemic
How did the Logistics Industry Respond to the Crisis?
Is It a Good Time to Start a Logistics Business?
FAQs

What is a Logistics Business?

In simple words, logistics refers to the management of the flow of things between the companies and customers. Logistics companies perform various functions. These include planning and implementation, storage and movement of goods and services.

The movement of resources is not limited anymore. It is now a global process. Every business needs a proper supply chain for its successful functioning. A supply chain may include, storage, transportation, management. It may also include inventory handling, warehousing, security, etc.

Logistics companies play an important role within a supply chain. These companies may perform all or few functions, according to the client’s requirements.

Thus, logistics companies help businesses with these functions. Today, the term β€˜logistics’ is synonymous with β€˜efficient flow’ in the business sector.

Logistics Business and The Covid19 Pandemic

The covid-19 outbreak began in late 2019 in China. The World Health Organization (WHO) declared the worldwide pandemic in early 2020. At that time, nobody knew what it was and how to deal with it.

Most of us expected it to be a virus that might end soon. But none of us was aware or prepared for its consequences. International borders got closed, travel and transportation got restricted.

Lockdowns across the borders restricted the movement of goods and services. Warehousing, inventory handling also got affected due to social distancing. All such disruptions in the supply chain affected the logistics business.

Problems faced by Logistics Startups During Pandemic

Border Closure:

The foremost and biggest problem was border closure. This made the whole supply chain come to a halt. Transportation could not take place at all. The logistics companies found it difficult to maintain the supply chain.

Workforce Disruption:

A logistics business is not something that one man can run. It requires a complete workforce to perform its functions. Due to lockdowns, the workforce got reduced.

Reduced Demand:

Due to the pandemic, consumers’ disposable income got reduced. This caused a reduction in the demand for various goods and services. Thus, the logistics businesses had to face losses.

Unpredictable Demand:

The demand for various goods was decreasing. But at the same time, the demand for some goods began to increase. These included medicines, masks, sanitisers, disinfectants, medical appliances, and more.

This uncertainty in demand caused unpredictability within the logistics industry. Thus, affecting their regular planning and management procedures.

Unstable Market:

Many sectors in the market faced a downfall during the pandemic. Both demand and supply chain got affected, making the market unstable. For a logistics business, working in an unstable market became a road to losses.

Irregular Profits:

The demand and supply got reduced on the consumer and corporations’ end. This disrupted the cash flow in the logistics industry. The logistics businesses had to face irregular profits.

A Curse for Small Players:

The pandemic had the worst impact on small logistics businesses. These small players did not have appropriate technology, backup, or recovery plans. They could not afford the expenses of tools as per health guidelines. Many had to shut down due to a lack of profits and increasing losses.

How did the Logistics Industry Respond to the Crisis?

The beginning of the pandemic harmed the logistics businesses. But, later on, logistics startups began to recover and bounced back in the market.

In the second half of 2020, logistics startups began to play an important role. They helped to provide the goods to the consumers at their doors. They also ensured safety protocols alongside.

The logistics industry helped in maintaining the flow of essential goods. They ensured a smooth flow of medical supplies across the globe.

E-commerce goods and services, delivery at the doorstep became the need of the hour. All this required efficient logistics. Here the logistics startups played a crucial role. This is how logistics startups began to bounce back in the market.

Is It a Good Time to Start a Logistics Business?

The pandemic made the world shift from offline to online. Every sector is digitizing. So is the logistics industry. The halt in the supply chain made the logistics industry revamp its measures.

The traditional plans and implementations made the companies unable to fulfil consumer demands. Now, the consumers want service reliability despite any hindrances.

So, if you want to start a logistics business make sure to stick with technology. It is better to invest in the following:

Internet of Things (IoT):

This helps your business operations to be efficient, smooth, and transparent at the same time.

Blockchain:

The world is moving at a faster pace. Time is too precious a waste on unnecessary printing and scanning. So, it is important to opt for documentations based on blockchain.

Artificial Intelligence (AI):

Another important thing to include in your logistic business model is AI. This helps to deal with uncertain demands in the supply chain.

Various logistics startups are digitizing the industry and making it a profitable space. Examples- Budbee, Airmee, Cargo One, Sender, AxleHire, etc.

Thus, if you are planning to start or invest in a tech-based logistics business, it is a good time. However, the industry has become extremely competitive with new technologies. So, it is important to do your detailed research. Plan well, build a team, know your technology and only then enter the market.

Conclusion

The logistics industry got affected by the pandemic. But it also learned to fight the crisis with technology. The whole marketplace is digitizing.

The technological era made the logistics industry super competitive. At the same time, technology has made it profitable as well.

New technologies like data analytics, automation, solution platforms, AI, etc. are a must. The logistics companies that understand how to use these technologies for their benefit are sure to win.

FAQs

What is a Logistic Business?

Logistics companies perform various functions. These include planning and implementation, storage and movement of goods and services.

What are the problems faced by the Logistics Business during the Pandemic?

These are the list of problems faced by the Logistics Industry during a pandemic are Border Closure, Reduced Demand, Unstable Market, Irregular Profits, etc.

List some Logistics Companies in India.

Here are a few examples of Logistics Companies in India are Transport Corporation of India Ltd, Mahindra Logistics Ltd, Aegis Logistics Ltd, AllCargo Logistics Ltd, etc.

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