08 July 2020
impact on the logistics industry
(COVID-19) pandemic has been a uniquely challenging time for the logistics
sector. Never have the world’s supply chains faced such a universally seismic
set of circumstances, nor one that is likely to have such far-reaching
Yet the challenges of
COVID-19 have been, and continue to be, somewhat different for the logistics
industry than that of other areas of business.
Here in the UK, land transport
in particular has been a vital factor in keeping the country going despite a
national lockdown, which has meant that many logistics firms have had to tackle
one of their most intensely demanding periods alongside all the complexities of
a national and global health emergency.
Of course, every
logistics business will have been affected by the pandemic in a different way;
its impact has much to do with the type of goods a company generally
transports. But, as an industry, the logistics sector has risen to meet the tremendous
pressure to continue to deliver throughout COVID-19, as we explore here.
An essential service
Like many countries
around it, the UK went into national lockdown in March to combat the spread of
the virus. While this was undoubtedly a necessary action, the ONS has revealed
since that the national economy contracted 2.2 per cent during the first three months of 2020, the worst quarterly fall since 1979.
businesses halted operations, furloughed staff and/or asked them to work from
home, many logistics firms found their services in more demand than ever.
start of lockdown came with several weeks of empty supermarket shelves, and logistics
companies rallied to ensure food, medicine and essential supply chains
continued to flow. Recognising this, the UK government assigned many within the
logistics sector as ‘key workers’, enabling them to carry on working through
the lockdown (while social distancing), access COVID-19 testing and keep their children
Thanks to calls from
business groups such as the Freight Transport Association (FTA), the government took further steps to
ease the strain on logistics firms working through the lockdown, including
keeping roadside facilities open, exemptions for freight workers in border
quarantine arrangements and extending MOTs and annual HGV tests. These and
other support measures have proven vital to an industry tasked with ensuring
the nation still has what it needs during the pandemic.
An online boom
And of course, this is
where online shopping has become indispensable. According to the British Retail Consortium (BRC), 61.9 per cent of all non-food retail
sales in May took place online, up a staggering 31.4 per cent from 2019.
Even as lockdown
restrictions start to lift and shops to reopen, retail experts predict this
surge in online sales will continue, as consumers form new habits and enjoy the
convenience of contact-free doorstep delivery and extended delivery hours.
Indeed, the FTA has called for the delivery hours extension to stay in
place even as the
lockdown eases and non-essential retail stores reopen, in order to support
economic and societal recovery, and to enable logistics firms to restock stores
safely out of hours.
Yet, for every
logistics business that has dealt with surging demand, there are others that
have seen their markets shrink and/or their operations stall due to drivers
Those that transport goods for the construction, events, hospitality
and wholesale trade sectors to name just a few may have seen business suffer,
although now that restrictions are easing it’s hoped these markets will begin
A robust and resilient industry
So, how have logistics
businesses in the UK experienced the lockdown on a more granular level? The FTA
have run a weekly logistics impact survey since March, asking operations large and small
to share the ways in which the pandemic has affected them as time goes on. The
picture that’s developed from then to now is fascinating, revealing a resilient
industry that is slowly becoming more optimistic about the future.
In week one (20th
March 2020), confidence levels among respondents regarding business outlook
over the next six months were just 4.22 out of 10. A week later, 76 per cent of
respondents reported a general downturn in business and by 3rd
April, 69.5 per cent of companies asked had scaled back or suspended
The introduction of
the furlough scheme meant that by 14th April, 72 per cent of
respondents had taken advantage of this, and most intended to defer tax and
income tax payments and pursue the SSP relief packages where applicable.
week seven (5th May) though, 22 per cent of businesses surveyed had
brought staff back from furlough and 35 per cent had diversified their services
to keep operations running. Over 42 per cent had hired agency drivers to cope
with short-term fluctuations in demand after furloughing their own workforce.The pause on manufacturing and international freight had begun to bite too,
with shortages of new vehicles, parts and machinery reported by those surveyed.
The most recent survey
(25th May) reports an almost universal increase in levels of normal
supply chain performance, 45 per cent of businesses had brought staff back from
furlough and confidence levels in business outlook were a healthier 5.52 out of
These stats are just a
fraction of the insights available and, while it’s clear the logistics industry
has been tested to the limit, there is movement in the right direction. It’s a
story that closely reflects our own experiences here at Touchstar and although we are remaining cautious in our
optimism, we are hopeful that for us and our customers, there’s light at the
end of the tunnel.
Stronger in the long-term
While no industry has
had an easy time of it during COVID-19, it’s obvious that the logistics
industry has had a particularly difficult few months. It is one of only a
handful of sectors that has been simultaneously subject to unprecedented demand
in some areas and to an overnight drought in others, while also facing the
challenges of social distancing, safeguarding and preserving public health.
There’s much further
to go before any kind of ‘new normal’ can be established but, if the
coronavirus crisis has proved anything, it’s that the logistics industry is
built of strong stuff. We’re confident that it will emerge stronger than