The world experienced the spring of 2020 in self-isolation mode. Governments of numerous countries around the world imposed quarantines, and many people have been forced to stay at home and be content to go out only to walk pets or shop for food. Many aspects of life have moved online, as people work remotely and attend classes, performances, and live concerts via Zoom video conferences.
What happened to consumption? Food and medicine came to the fore. With shopping centers closed, most non-FMCG products could be sold only online. However, consumer preferences have recently changed: new clothes and shoes are not necessary if you cannot leave your home. With borders closed, suitcases are not necessary. With parks closed and visitors facing potential fines, purchases of new bikes, sneakers, or roller skates are postponed. These changes in consumer preferences also affect logistics.
AsstrA experts discuss how the epidemiological situation has affected business in general and logistics in particular.
"Demand has shifted away from focusing only on products to a more holistic solution-based perspective. There are more factors to consider, including the senders’ and recipients’ operating modes, currency fluctuations, delivery times affected by quarantine restrictions on the transit route, and rerouted cargo flows.
Turnkey cost-optimization solutions are in high demand. Also, combined delivery schemes are used to balance “price vs. time” requirements. The value of the benefits of digitalization increases. There is growing demand for process automation and integration with customer systems.
It’s been a buyer’s market for some time now. That of course affects how purchase prices are set. At the same time, customers expect increasingly better service quality and faster information sharing. Therefore, our top priorities include not only excellent door-to-door deliveries but also all of the solutions and advice that will help improve a customer’s logistics experience," says Nadezhda Chura, Deputy Director of Sales and Marketing at the AsstrA corporate group.
As Nadezhda Chura notes, the Covid-19 pandemic has accelerated reliance on digital solutions, from contactless technologies to gadgets and applications that ensure uninterrupted online work anywhere in the world. In some areas over the last 2-3 months, recent digital developments will shape progress for several years ahead. In some cases, digital technologies will speed up and reduce the cost – in direct financial terms or regarding time or workflow efficiency – of obtaining results. Therefore, further digital transformation is inevitable.
"Every change in society, whether economic or political, is reflected in the logistics sector. Supply chains and markets change, and demand for certain groups of products goes up or down.
As an example, AsstrA’s Russian divisions have experienced an increased number of transport orders for food products. The growth occurred during the quarantine period in March and April. Our turnover from supporting this industry increased 23% compared to the same period in 2019.
If we talk about destinations, the closure of Europe in the second half of March led to a decrease in traffic on European routes. But in the same period, China began to come back to life. That helped us increase volume between China and Russia, " says Tatyana Goncharenko, Asstra Moscow Branch Manager and Central and Volga Federal District Manager.
"Those who respond flexibly to market changes and benefit from ongoing transformation will survive the crisis. Despite the suspension of production at factories, there are notable upswings in shipments for certain products. For example, the supply of medical and sanitary products has increased, and the food sector is operating at full capacity.
Companies that face stagnation caused by the pandemic have adapted their businesses to maintain capacity. Automakers such as the Renault-Nissan-Mitsubishi Alliance, as well as Groupe PSA, Ford, and Mercedes-Benz have temporarily refocused on the production of ventilators and other medical equipment.
The increased demand for antiseptics led to a shortage of isopropyl alcohol. Oil and gas companies Gazprom, Tatneft, and PKN Orlen began boosted their production capacities and began to produce disinfectants. Some cosmetic manufacturers also increased production of antiseptics, and apparel manufacturers have shifted to making masks and protective suits," says Dennis Gural, CEO of AsstrA.
According to Denis Gural, consumers’ massive shift to e-commerce makes companies rethink supply chains in order to stay competitive. Therefore, logistics operators also have to adapt and explore the potential of the current situation to find new delivery schemes, optimize costs, and minimize transportation times.
"Because of social distancing rules, online shopping is gaining popularity. Despite the fact that we have been developing express transport projects with clients for a long time, our latest goal is to partner successfully with online marketplaces," adds Denis Gural.