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Logistics industry: Remaining resilient in the time of COVID-19

By Martin Tan, Head of Operations, J&T Express Singapore

The onset of the COVID-19 outbreak has had a significant impact on businesses across all industries and sizes around the world. The global supply chain has also been hindered as countries implement an increasing number of restrictions to curb the spread of COVID-19. This sudden halt in global movement has forced retail brands and businesses to adapt their operations swiftly.

For consumers, the pandemic is transforming consumer spending habits as the increasingly restrictive measures drive them to e-commerce. Today, third-party delivery providers are witnessing an increase in the purchase of all daily necessities, not just toilet paper and hand sanitiser. In response, companies, regardless of their sizes, have increasingly digitalised their business operations and elements of their supply chains.

In particular, Singapore’s “Circuit Breaker” period and tightening of measures brought about a shift in shopping behaviours as an increased number of businesses were considered non-essential and therefore ordered to close. This has led to an increase in the number of home deliveries, which, coupled with changing border regulations, has placed a strain on manpower in the industry as players look to meet the growing demand.

However, even as countries start to ease their movement restrictions, the shift from offline to online purchases will remain an increasingly preferred way of shopping. In fact, a study by Nielsen found that 76 per cent of Singaporeans indicated that they are likely to continue shopping online at a higher level even after the pandemic.[1] This presents opportunities for businesses that are able to remain resilient and nimble amid these challenging times.

The logistics industry is often thought of as a bridge between brands and consumers, moving goods across borders or over the last mile to ensure deliveries are completed safely and efficiently. It is also one that is proving vital during this time of the crisis.

Amending processes to cope with manpower strain

The COVID-19 pandemic has exposed the fragility of business operations and supply chains. For instance, the Movement Control Order implemented by the Malaysian government has forced Singaporean companies, especially those that rely heavily on Malaysian workers who travel across the border daily, to quickly react as they look to mitigate the impact on their operations.

In the face of this changing environment, industry players need to keep abreast of fast-changing government regulations and be ever-ready to quickly implement necessary steps to remain operational. The logistics industry, in particular, requires both resilience and adaptability, to allow it to navigate challenges in serving the online operations of retail brands and businesses and continue to meet the needs of the everyday consumer at a time when movement is severely restricted.

For instance, Grab, the ride-hailing transport and food delivery solutions provider provided a much-needed boost to its delivery manpower by calling on their ride-hailing drivers to help make both grocery and food deliveries.[2] At J&T Express Singapore, ramping up our operations by utilising a second warehouse, increasing our temporary manpower and running our operations every hour of the week with a staggered shift system allowed us to meet the new influx of orders.

For many other companies, leveraging technology and automation has also helped to alleviate the hindrance COVID-19 has brought about to their manpower situation. Logistics company Toll Group makes use of automated guided vehicles and smart shelving systems in its Singapore logistics hub to reduce manpower costs and ramp up efficiency by up to 30 per cent.[3]

At J&T Express, our recently commissioned automated parcel-sorting machine has the ability to sort up to 3,000 parcels in an hour, allowing us to reassign workers to other tasks that still require the use of manpower. Besides curtailing manpower issues, these technologies help to reduce human error and ensure smoother processes overall. Moving forward, as more consumers shift to online shopping and as their expectations heighten, we are now focused on investing in our logistics infrastructure, with plans to open up a new fulfilment centre and install more sorting machines.

Managing supply chain disruptions

The global supply chain has also been upended as travel restrictions have led to a reduction in airline services, causing outbound cargo and freight costs to soar as shipments are delayed and overall shipping capacities are reduced. Outbound freight rates from China skyrocketed on the back of a weeks-long labour shortage and disruptions continue to plague a country that is slowly recovering from the pandemic.[4]

Amid rising costs, companies must resist passing on the extra costs to consumers. For companies such as NTUC FairPrice, diversifying their sources from multiple countries has helped to defray some of the increased costs.

It is important to note that people seek connection during times of uncertainty. During this period, it is thus important that businesses communicate their care for consumers and avoid unnerving them further by increasing product and delivery costs. For logistics companies, keeping customers constantly informed and ensuring full transparency on the status of their deliveries will help minimise consumer anxiety and the hostility that may come with it.

Ensuring the safety of both employees and consumers

Besides caring for consumers, the safety of workers has never been more important as COVID-19 has placed millions of global supply chain workers at risk, as highlighted by the recent closure of a logistics facility of one of South Korea’s largest e-commerce companies after an outbreak of COVID-19 cases.[5]

This is a critical time for companies to review their supply chains to ensure that they have a robust system of protection and checks in place, in line with standards set by their local authorities. For back-end operations, having a prepared and implemented business continuity plan (BCP) that includes telecommuting for its office employees will go a long way in ensuring businesses can swiftly respond and remain undisrupted in times of crises.

As delivery drivers continue to act as the face of online retailers, the safety of consumers becomes a top priority for third-party delivery providers as well. Delivery players and logistics companies in the region have stepped up their service offerings to avoid human-to-human transmission of the virus. To reduce the amount of contact between drivers and consumers, delivery companies such as Grab, Deliveroo and ourselves have implemented contactless deliveries.[6] This has allowed J&T Express to reduce the risks of virus transmission while still keeping its customers’ businesses going and ensuring products and supplies are delivered to consumers.

Resilience and adaptability key to long-term success

Companies are facing tremendous challenges in maintaining the flow of goods and services while the movements of goods, people and even vehicles are restricted. In an increasingly digital world, and as COVID-19 continues to impact lives and businesses, the role of delivery players will only continue to become more important as the last touchpoint of the supply chain, which often means serving as the only time consumers interact face-to-face with brands.

Therefore, logistics players must be ready to work with their partners to broaden delivery options. After all, there is no one-size-fits-all delivery solution, especially in times of crises. It is only by being flexible that businesses and logistics partners can come together and discover new ways to deliver parcels.

Each industry and retail brand brings unique requirements that need to be met in order to ensure the best experience for consumers. As the resilience of the logistics industry is tested amid a surge in demand, businesses need to remain agile and adaptable to tackle constraints in operations, labour and supply and demand to ensure consumers are able to receive their parcels safely and effectively.

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[1] https://www.nielsen.com/sg/en/press-releases/2020/covid-19-new-norm-consumers-behaviour-press-release/

[2] https://www.straitstimes.com/singapore/taxi-private-hire-drivers-tapped-to-meet-demand-for-food-and-grocery-deliveries

[3] https://www.channelnewsasia.com/news/business/singapore-logistics-firms-urged-to-automate-adopt-new-technology-10541604

[4] https://www.businesstimes.com.sg/government-economy/outbound-cargo-rates-soar-as-covid-19-slashes-airfreight-capacity

[5] https://www.straitstimes.com/asia/east-asia/outbreak-at-s-korea-e-commerce-plant-drives-spike-in-new-cases

[6] https://www.tnp.sg/news/singapore/food-delivery-operators-launch-measures-reduce-close-contact

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