Dynamic 3PL Blog


How COVID 19 changed the 3PL industry

Posted by Amanda Eminger on Nov 4, 2020 9:11:41 AM
Amanda Eminger

covid 19

The COVID-19 or Coronavirus pandemic changed the world as we once knew it. Spreading with alarming speeds and bringing economic activity to a near-standstill, 2020 will be a year that everyone remembers. Not only is the health and human tolls growing but the economic damage is also very evident. It is said to be one of the largest economic shocks the world has experienced in decades. Even after eight months of the world on lockdown, COVID-19 outbreaks persist causing restrictions to be reintroduced and disrupting economic activity once again, making the recession even worse.

The COVID-19 pandemic has plunged most countries into recession and affecting businesses, including the third-party logistics industry. COVID-19 has caused a massive shift in 3PL operations. Being flexible and communicating has been key for companies to continue as normal. The biggest changes in 3PL operations is due to the enormous market shifts.

Two things Dynamic 3PL has noticed shift in the industry are:

stay homeBusiness to consumer (B2C) or eCommerce business grew massively. Since a lot of the world became worried to go out and be around crowds, buyers resorted to ordering goods online. The high demand that came from people online shopping while stuck inside their homes, flooded the United Parcel Service Inc. and FedEx Corp. delivery networks with shipments. This growth allowed both companies to raise their shipping rates. This rapid B2C expansion drove significant changes to distribution strategies to cut logistic costs and make delivery more responsive to consumer demands.

International supply chains since the pandemic broke out has been incomparable. According to studies, global air freight capacity was down almost 40% as passenger flights were taken out of commission in April. This plummet caused air freight rates to surge. Charter rates also started to run about four to six times higher than normal. Although supply chain experts expect rates to come back down once passenger air capacity recovers, COVID-19 has highlighted the importance of innovation for logistic companies.

Although the pandemic has shifted many businesses and the economy, the third-party logistics industry is still standing strong, if companies can make the proper adjustments. Being able to adapt to the eCommerce fulfillment change, staying flexible, and putting proper precautions in place to keep your facility workers away from becoming sick are important factors in keeping operations normal. It is impossible to predict what the future holds, but it is clear that adopting and embracing new technologies and ideas in a supply chain is becoming increasingly crucial to success.


Tags: Supply Chain Expertise, Logistic Innovations

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