By Adam Ewart, CEO and Founder of Send My Bag
It has certainly been a whirlwind couple of months. The coronavirus – which at the start of the year seemed like a distant, incomprehensible issue – has impacted virtually every aspect of everyday life. There are live outbreaks in every continent – bar Antarctica – forcing a significant proportion of the global population under some form of lockdown. This has, of course, had a significant impact on the day-to-day operations for industries across the global economy, including international logistics.
Pain points of international logistics sector under changing conditions
The international logistics industry was among the first to feel the pinch from coronavirus. Seven of the top nine container ports in the world are based in China, and the other two ports are in Singapore and South Korea. All three of these countries were hit early by the pandemic and shut down their borders to prevent the spread of the virus. But this has resulted in ships being unable to get into Chinese ports or not being able to load or discharge goods when they dock.
But it’s important to note that not all businesses in the vast international logistics sector have experienced exclusively negative impacts as a result of the coronavirus outbreak. For instance, Send My Bag saw a 1320% year-on-year increase in demand in March, as people started relocating to their home countries. Similarly, orders from Germany, Spain, and Netherlands also rose by 700%, 800% and 600% respectively as travel bans were introduced.
As a result, the business faced a slightly different challenge to other businesses in the international logistics sector – how to respond to a sudden increase in orders. Although our customer base is globally spread and customers use our service for a range of reasons, we do still find the summer months to be our busiest. As such we’ve become accustomed to dealing with seasonality and our customer service runs on flexible systems that can be scaled up or down. Therefore, when we experienced a large spike in orders in March, we shifted to our summer plan and implemented a wide range of measures to respond to the surge in demand, including changes to shifts and rolling out an overtime schedule. We also asked staff if they would like paid work as an option during their annual leave.
The importance of strong leadership and HR functions in crisis
Most importantly during this hectic period were the HR measures we implemented supported by a clear and transparent line of communication with staff. As talks of unemployment filled the news, before the government announced its job retention scheme, we told our entire team that no one would be laid off regardless of any decline in orders anticipated over the next 12 weeks.
There is so much anxiety amongst employees across a range of sectors which could adversely impact their ability to do their job and in turn, impact business performance at a crucial time. It is therefore vital that business leaders are up-front and honest with their employees and imbue them with the confidence needed to do their job to the best of their ability.
We’ve seen businesses both succeed and fail at this essential task during the crisis. For instance, Amazon has been in the news for all the wrong reasons, stretching from failing to provide adequate protection for its warehouse workers to its multi-billionaire owner asking the public to pay for Amazon drivers’ sick pay. Whereas, on the other side of the spectrum you have Jack Ma, co-founder of the Alibaba Group, who donated 1 million masks and 500,000 test kits to America and – via his foundation – sent supplies to over 60 countries, including several in Europe and every African nation.
Adapting to change
Aside from implementing an effective line of communication with staff, the best way business leaders can safeguard their international logistics arrangements in the current climate is by being flexible. In these extraordinary times, businesses mustn’t stick to what they know. You’ve got to be adaptable, flexible and willing to look at alternative ways to deploy your business.
Take Cainiao Smart Logistics Network, the logistics arm of Alibaba, as an example. The network teamed up with a dozen logistical partners to launch a ‘Green Channel’ initiative to expedite the fast and safe delivery of medical supplies throughout China. Not to be outdone by its close competitor, JD Logistics, another China-based logistics business, adapted its supply network and deployed autonomous ground robots for last-mile delivery of crucial supplies in the worst affected hospitals in Wuhan.
At Send My Bag, we had to navigate increased costs and transport restrictions imposed by nations in response to the coronavirus crisis. This included our partners needing to re-route orders when borders were closed – which was particularly prevalent in mainland Europe – and scheduling additional dedicated aircraft to complete our orders when there was a lack of commercial cargo space. Also, certain nations, such as South Africa, are currently only permitting international logistics networks to handle essential goods. To overcome these logistical issues, we had to be flexible and keep customers informed throughout.
Now, as the large spikes we experienced in March have plateaued to some extent, we have reverted back to our off-peak operation plan and are looking at different ways to use our capabilities. This included supporting an initiative to transport testing and PPE kits to frontline medics.
These are difficult and uncertain times for the international logistics industry. The supply lines that we rely on are being disrupted and some sectors are facing a drop in demand, whilst others are experiencing a spike. During these turbulent times, business leaders must be adaptable, show leadership and support their employees.