Re-evaluating Transport & Logistics Resilience in the Age of Covid

The COVID-19 pandemic has vastly disrupted global distribution and movement across countries as many countries shut their borders and limited travel and transportation to prevent and contain the spread of the virus. The increased border control and customs regulations have affected the transport and logistics industry as they struggle to meet last-minute fulfillments. This has resulted in a lot of uncertainty as supply chains in logistics and transport are hindered, although differently across air, sea and freight sectors. We must then address the impact of the pandemic and analyze the ways to recover and prosper. 

Addressing the impact of COVID-19 on transport and logistics

  • Analyzing the pain points

The first step to address the impact of the pandemic is to analyze the existing business plan and understand the strengths and pain points of the business model. It is essential for transport and logistics companies to evaluate what to enhance, strengthen and improve along with determining the allocation of resources. 

  • Understanding customer expectations

Once companies have conducted an evaluation of their current business model and evaluated their pain points, they must also understand the expectations of their customers and meet them. It is essential to understand the new demands of the customers and market patterns and trends to be able to deliver effectively. 

  • Introducing digital technologies

Digitizing transport and logistics using technologies like automation, robotics, augmented reality, etc. can improve and enhance the operations of the transport and logistics sector. These technologies support the sector by making processes efficient and effective – revolutionizing picking, packing and commissioning processes, transport planning and customer invoicing, etc. 

  • Restructuring the workforce

Restructuring the workforce can help the transport and logistics sector to realign their human resources where they are suited and needed best. Redistributing teams can help the sector achieve balance in the various departments such as operations, customer service, distribution, etc. 

While these efforts must be taken by the transport and logistics sector to recover from the impact of the COVID-19, this is not enough. Businesses must also prepare for the future and make transport and logistics resilient to be able to survive and thrive in a rapidly changing market landscape. 

How to make transport and logistics resilient 

  • Effective communication

Effective communication is key to make transport and logistics resilient. Businesses need to communicate with all their stakeholders – customers, suppliers and workforce – and work proactively with them to sustain and improve their business. 

  • Increasing flexibility 

When a business is met with obstacles, it must adapt itself and face the challenges by improving its strategies and revising its action plan. Companies must focus on reallocating and realigning their resources, inventories, capabilities and capacities to develop a resilient model. Collaboration with stakeholders and the introduction of new technologies are a few ways in which companies can adapt themselves to the changing market landscape. 

  • Striking a balance 

The correct balance between safety, service and cost must be achieved to strike the perfect balance. Focusing more or less on a factor can cause imbalance, potentially hampering the growth and operations of the sector. 

While these changes and strategies are essential to make transport and logistics resilient, these cannot be achieved without the guidance of the leaders of the industry. The leaders play an integral role in not only making decisions but also driving them.

Role of leaders in achieving business resilient

  • Championing 

Leaders must be at the forefront of championing changes in their business and operations, making transport and logistics resilient. Successful leadership involves promoting and achieving large scale or high impact changes in the organization. It is, thus, the responsibility of the leaders to influence and make decisions that have a large organizational impact.  

  • Strategic thinking 

Strategic thinking involves providing the vision and mission to the organization. Leaders must keep an eye on the KPIs, understand and address the pain points within the business and continuously improve and enhance the business and its operations. 

  • Communication

An organization might have to make significant changes to make itself resilient. So, it is essential for leaders to communicate the need to change and make operations resilient. This will keep everyone in the organization informed and more acceptable to change. All the stakeholders must be informed about their role in making transport and logistics resilient and how they can achieve the same. This promotes a healthy communication channel and clarity within the organization. 

Future of transport and logistics post COVID-19 

  • Leveraging technology 

Using the latest technologies and trends and leveraging artificial intelligence and machine learning can help the industry to make operations more efficient and cut costs. Introducing technologies to transport and logistics can help businesses to manage people digitally, automate and streamline processes, etc. 

DHL, the world’s leading logistics company, for example, has developed IDEA, an AI algorithm that can significantly improve order-picking up processes from its warehouses. The algorithm helps in clustering orders logically, optimizing picking routes by the warehouse employees. IDEA has reduced the distance travelled by warehouse employees by up to 50% and improved productivity of individual DHL locations by 30% in its first commercial deployments. 

  • Improving collaboration

Encouraging collaboration across departments and industries can help the transport and logistics sector to scale up and capitalize on new opportunities. Establishing forums, committees and spaces for cross-industry collaboration can open up new avenues for the transport and logistics sector. 

  • Going green

As the world moves towards greener choices, it is essential for the transport and logistics industry to embrace change and adopt green practices and integrate environmental considerations while making decisions, distributing and storing goods. 

Green Logistics 2020 is an initiative by Alibaba to promote and implement eco-friendly practices of material recycling, green packaging, effective route planning, etc. Cainiao, the logistics arm of Alibaba is committed to the goal as nearly 100% of its products are biodegradable and nearly half of the paper packaging is tape-free. In 2020, Cainiao also used its self-developed packaging algorithms to sort products into appropriate sizes, minimizing waste from overpackaging for 12 million shipments. Consumers were also encouraged to recycle their packaging at Cainiao’s 80,000 recycling stations across China. 

Conclusion 

The future of transport and logistics is only possible when the sector becomes resilient. This will help the industry to tackle and overcome unforeseen challenges as it remains prepared for the same. The sector and its employees must collectively embrace and compose themselves for the future as they seize opportunities. 

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About BOD Consulting Team

BOD Consulting is a strategy and design consulting partner for those who lead into the future with humility and fortitude. We solve the leadership’s most pressing business challenges, unlock value creation, and implement transformative solutions to help them grow meaningfully and compete sustainably, as they tread into the future.

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Ravi’s extensive experience and dedication to mentoring emerging leaders and fostering continuous learning have made him a valuable asset in driving transformative change and cultivating high-performing teams.

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Expert Advisor at BOD Consulting | Ex-Microsoft, Oracle and Sun Microsystems | Advisory Member of Board of Schulich University, Canada and Bennett University, India | IIT Kanpur

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Senior Partner at BOD Consulting | Mentor-MIT Boston, Faster Capital & Tiger Hall| Ex-Essel (Zee) Group and Cairn India| Authored 6 books | IIM Calcutta | SRCC

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Raman Kumar is the R.V. and A.F. Oliver Professor of Investment Management in the Department of Finance, Insurance and Business Law at the R.B. Pamplin College of Business at Virginia Tech. He received his PGDM (MBA) from the Indian Institute of Management, Calcutta and his PhD from the University of Pittsburgh. He teaches finance and economics courses in the undergraduate, MBA, Executive MBA, and PhD programs.
His research work largely centres around Asset Pricing, Derivative Securities, Financial Markets, Market Microstructure, and Empirical Research Methods in Finance, with some of his works published in prestigious publications such as the Journal of Finance, Journal of Finance and Economics, and Journal of Corporate Finance. 

He has served on over 50 dissertation committees as Chair, Co-chair or member for PhD students in the Departments of Finance, Accounting and Information Systems, Marketing, Management, Hospitality and Tourism Management, Economics, Building Construction, and Civil Engineering at Virginia Tech.
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Shubhendu Agrawal

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Senior Partner, BOD Consulting | Founder, K-Trends | Ex COO APAC Mullen Lowe I Ex-Senior Vice President (Digital & Content Marketing), Dubai Tourism | Ex-Managing Director, Digitas | Ex-CMO, Harappa Education

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Dr PV Ramana Murthy

Expert Advisor at BOD Consulting | Managing Partner at Pinsight By PV | Adviser – Employment and Labour Law Practice at Economic Laws Practice | Board Member at Swadha Foundation | Ex Global CHRO, Indian Hotels Company Ltd | Ex Executive VP HR, Coca-Cola

Dr Murthy boasts an extensive 35-year corporate career, during which he contributed to renowned Fortune 500 and Global organisations. Apart from being a Lawyer, he holds a Master’s Degree in Organisational Psychology from INSEAD, Singapore. Additionally, he earned his Ph.D. in Strategic Human Resource Management from Sri Krishnadevaraya University, Andhra Pradesh. 

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During his stint at Coca-Cola, Dr Murthy not only managed the global leadership development function for the Bottling Investment Group (BIG) but also facilitated impactful leadership development initiatives.

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    Senior Partner at BOD Consulting |Ex-Godrej & Boyce, Polaris Retail Infotech and Oracle India | IIM Calcutta | IIT Kanpur

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