Logistics Post Covid-19

In a time-frame of fewer than 5 months, Covid-19 has impacted the global economy in a major way. The pandemic has also exposed multiple facets of businesses that would need to move quickly and adapt to the new normal.

Post-Covid, there is one thing a lot of businesses would have to certainly reconsider, their supply chains. Lack of stock for essentials during the panic buying spree, the over-dependence on India & China for production of pharmaceuticals, China’s involvement in global supply chains are few chinks in global supply chains that businesses would have to work upon. These challenges would bring out a few very noticeable transitions –

Higher Inventories

Over the last few months, the pandemic has stretched companies' supply chains and the low inventory levels have been exposed. As a takeaway from the pandemic, it would be necessary for companies to maintain a higher level of inventory to create a safety net. The governments across the globe would also try to reduce the risks by creating policies focused around maintaining minimal levels of inventories for essential businesses.

A lot of industries might have to redefine the significance of warehousing and maintaining higher inventories. Maintaining higher inventories might affect the profitability of the businesses but considering the possible downside, stakeholders might still prefer for the companies to change their current

Creating multiple sourcing destinations

Post pandemic, a lot of companies might want to reduce their over-dependence on China. The overreliance on China as a sourcing destination started affecting the supply chain much prior to the virus spreading globally along with the dominance of China & India for the manufacturing of pharmaceuticals would be a couple of things which the national economies would surely take note of.

The last few decades have seen a substantial rise in wages in China, the increase in costing has resulted in the loss of price competitiveness of manufacturing in China. The last decade has seen countries like Bangladesh, Vietnam, India, Myanmar emerging as alternative manufacturing destinations owing to lower labor cost and initiative from the government to promote FDIs.

Regionalization over Globalization

The trend of globalization which started towards the end of 20^th century saw China as one of the major beneficiaries over the decade. With a sizable chunk of companies looking to reduce their reliance on China, a lot of countries can benefit from shifting balance of powers. This can lead to an improvement in economies across the globe

Just as mankind has survived natural disasters, wars, pandemics and economic crises in the past, things would get better eventually. However, there would be multiple changes across business terrains and the ones which are quick to adapt might would have a great edge over others in upcoming times.

Post Covid-19, we at MGH Logistics have flexibly expanded our offerings to cater to newer trends across multiple industries. Reach out to our team with booking related queries at – contact@mghgroup.com