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The trucking industry is an essential pillar of the economy that is usually underestimated as a sector. Still, 80% of communities depend on logistics companies for the delivery of everyday goods, from raw materials, food, to medical supplies.

What is the impact of covid-19 on logistics companies?

• Negative impact

The outbreak of COVID-19 revealed many defects in the global supply chain. According to the World Economic Forum, the pandemic was a big challenge for the trucking industry. There was an imbalance in the supply and demand of goods. Consumers’ demands for goods and services were growing, in contrast to the worldwide closings of borders and the decreasing workforces as drivers were concerned with protecting their health on the roads.

The coronavirus is one of the hardest times in our modern era. With the strict stay-at-home restrictions and social distancing, many businesses and industries are facing many obstacles. Various logistics companies encountered many difficulties such as supply-chain capacity constraints, stopping of key services, freight capacity, and cost pressure issues. The great challenge of the logistics sector was in meeting consumer demand with the minimum interference to supply chains and physical contact.

• Positive impact

Despite the crisis, the trucking sector acted as a leading part in facilitating the transportation of supplies. Due to COVID-19, Trucking companies kept moving basic supplies such as food and pharmaceutical supplies and sanitizing supplies.

• Digitization and e-commerce growth

The pandemic led companies to shift toward digitization which had many advantages on the trucking industry and driving logistics. With the growth of digital technologies, there is still a way for companies to stay connected with their customers despite physical distance. Digital technologies advance the supervision of logistics, preserve data, and optimize processes. Thus the time-consuming administrative methods, that slow supply chains down and cause mistakes, are now displaced with digital technologies powered by Blockchain Technology.

• E-commerce and consumers

The e-commerce business has evolved enormously, and it boosted the trucking industry in these tough times. People felt more encouraged and more comfortable to get their goods online than in-store. We can predict that buyers will stay confident in ordering online as a safe purchasing method.

• E-commerce and logistics companies

E-commerce and the trucking industry are overlapping and influencing each other. On the one hand, e-commerce is dependent on truckers to get their goods from one place to another. On the other hand, many trucking companies have acknowledged the advantage of integrating data analytics into their business. This technology enables trucking companies to detect their flaws to build more efficient operations. For that, more trucks are starting to integrate ‘smart’ technology to advance and improve the performance of the truck.

For instance, the UAE is listed as the 11th logistics-friendly country. Its freight and logistics business has been expanding by the constant and speedy extension of e-commerce. To promote the trade and e-commerce business, Dubai has realized actions for the improvement of its infrastructure and technology. Although the impact of Covid-19 on commerce, Dubai’s transport sector had witnessed healthy growth rates by 355% in 2020, during the lockdown times and while respecting the precautions rules and the guidance of both the Ministry of Health and Prevention and the Dubai Health Authority.

The UAE created an opportunity out of this dilemma by enhancing this essential sector, thanks to the quick response and flexibility of legislation by the government to boost the sector.

Conclusion

Post-pandemic, the industry is likely to see a long-term transition towards a more digital business. Businesses that seize this opportunity to establish a powerful digital presence with a long-term outlook, will definitely grow in the post-COVID-19 stage. Our current transformations will have a permanent impact when the world economy heals.