COVID-19 pandemic severely affecting logistics industry

The coronavirus pandemic has severely impacted the logistics sector, both in India and globally, as market players say that global capacity has gone down 70 per cent and freight rates have shot up by 6-8 per cent.

Further, in India, with the 21-day lockdown, the sector is likely to see much more hardships.

Ambrish Kumar, Founder, Logycode Tech Solutions Private Ltd, was of the view that although the lockdown was necessary, the flip-side of the lockdown measure has also caused a kind of mess for most of the businesses. The logistics and supply chain sectors are also impacted, he added.

"With the closure of international flights, the belly capacity reduction has impacted the movement of the cross-border trade by air. Only cargo aircraft are operating," he said.

"The overall capacity has gown down by almost 70 per cent. This has led to global freight rates shooting almost 6-8 times from the usual. This is expected to further increase as the global supplies need to be replenished through trade and the demand will only increase," Kumar said.

He said that due to the lockdown, movement of essential commodities such as medicines, medical goods, vaccines and drugs, medical equipment, hand sanitizers and perishables, including their import and export, are also impacted as there is a shortage of manpower at airports and seaports.

Further, the road transporters are unable to get the goods from the manufacturing units to the ports due to the closure of state borders, affecting first and last-mile connectivity.

Other most-traded commodities such as garments, automotive parts, leather products, home furnishings, and handicrafts are not moving at all. "In a nutshell, the demand and supply gap has increased a lot," he said.

Rajesh Neelakanta, Executive Director & CEO of BVC Logistics, was of the view that although on paper, the logistics industry dealing with food products, pharma and medical equipment among other essential items are allowed to operate, things are not really the same on the ground.