It is widely believed the major economic fallout from the Covid-19 pandemic is that the era of globalization has run its course. That is a myth.
If anything, the seizing up of international markets earlier this year when China, commonly referred to as “the world’s factory,” shut down in order to insulate the country’s population from further exposure to the coronavirus, is actually spurring businesses around the world to further diversify international supply chains to re-double their efforts to mitigate risks while continuing to exploit growth opportunities across global markets.
The fulcrum for such strategies to succeed is an ever more extensive geographically integrated and cost-effective global logistics sector. As a result, firms in the logistics industry are under tremendous pressure to rapidly expand capacity, diversify routes, enhance network agility and resilience and reduce costs.
It is no secret the achievement of such results will turn on how quickly and comprehensively logistics firms’ operations embrace digitalization.
If the economic incentives stemming from greater globalization were not enough for the logistics sector to transition to a digitalized form, Covid-19’s threats to public health and the resulting imperative to engage in social distancing, are making such a transformation virtually inevitable.
Indeed, except perhaps for the “first-” and “last-mile” of distribution networks, where human interaction is all but inevitable, end-to-end digitalization of the international logistics sector, including of backend processes, will be crucial to maximize value added to logistics firms’ customers.