The COVID-19 crisis has made a significant impact on the global economy forever, with airline freight and aviation, in general, taking a crucial hit during the crisis. Now more than ever, these companies must move quickly and adapt to the new normal that will emerge after the outbreak if they want to return more powerful than ever.
So how exactly will the logistics industry change during the transition from crisis to normal?
- Companies will opt for higher inventories.
The crisis has significantly hit many companies, from those with stretched supply chains to those with low inventory levels. With that, many companies will choose to maintain higher inventory levels as safety buffers, especially for critical goods. Companies with less stretched supply chains and better liquidity ratios will be favored by analysts due to their sustainability and resilience, even if it means less money will be available for investments and innovation.
- Only a few companies will single source.
A lot of companies are now sourcing to other Asian countries to minimize their dependence on China, especially industries like pharmaceuticals. Although supplies 80% of the active ingredients for antibiotics and generic drugs are produced both in China and India at low costs, the EU patent law opens opportunities for industries to manufactured drugs in the continent.
- There will be growth in the E-commerce industry.
More people will be looking into ordering products online due to restrictions and health reasons. With that, it will be the driver in the growth of air cargo shipping.
Are you in need of freight carrier services in Chicago, Illinois?
PRECISE LOGISTICS FREIGHT provides freight shipping in Illinois for companies who need cost-efficient transportation for their goods.
We also provide Temp Controlled Freight for temperature-sensitive goods.