Impact of covid-19 on the Global Logistics Market
In 2019, the global logistics market recorded 1.2% in export trade volume growth due to the sluggish global economy, geopolitical uncertainties, trade disputes, and environmental regulations. In Q1 2020, the COVID-19 outbreak reversed the growth change in every section of the economy, including the global supply chain. Additionally, as economies across the globe are actively focusing on containing the outbreak, the global supply chain and trade is taking a severe hit owing to a rapid drop in global investment flow.
The global maritime industry has been affected by the COVID-19 outbreak, both directly and indirectly. Slumping manufacturing confidence and declining demand for raw materials and commodities are increasing the ambiguity for the ocean freight & transportation market. Stringent containment actions imposed by government bodies across the world and protective measures to lessen the outbreak impact have led to declined cargo volumes and trade across ports in North Europe and the West US.
China accounts for two-thirds of the top 10 busiest ports across the world and is responsible for more than 40% of the maritime trade in the world. The lockdown in the country has resulted in supply deficiencies as the pandemic is taking a toll on several global maritime segments from container lines to oil tankers. The drop in cargo volume has led to increased carrier service delays and cancellations. Considering the uncertain market situation, this trend is anticipated to continue to cause demand/supply imbalance. If the situation persists, carriers are likely to opt for substantial capacity reduction actions, which is expected to impact the fleet-order.
The airfreight segment of the logistics market has been a crucial partner in ensuring that the global supply chain remains effective for important and time-bound shipments. As the COVID-19 outbreak has spread across the world, many air carrier companies have grounded their fleets owing to travel restrictions and reducing demand. Air cargo demand fell by 3% year-on-year in the first two months of 2020 due to the COVID-19 crisis. This deterioration has been partially offset by augmented demand for air shipments of crucial relief supplies and other transitional goods. The air carrier companies based in the US, South Korea, and countries in Europe have begun offering their idled aircraft and passenger jets to transport food supplies and medical/pharmaceutical essentials across important international freight centers. Government bodies are likely to eliminate economic barriers and terminal slot limitations for air cargo actions, ensuring the flow of sensitive and essential goods.
Apart from the factors mentioned above, consumer purchasing behavior sentiments are also expected to impact the overall logistics market as people are not willing to invest in any business deals owing to limited per capita income and fear of market fluctuations. Thus, considering the current scenario, logistics services are not expected to remain affordable for the stakeholders.
consumer price index (cpi%) of prominent countries