The Impact of Coronavirus Pandemic on the Logistics Sector in Nigeria

The global pandemic, caused by the novel coronavirus, has totally disrupted almost all global economies. The virus that originated from Wuhan, China, has forced most global sectors to a standstill over the past few months. The logistics sector, amongst all other major sectors, has been seriously affected, due to the restrictions of movement and a compulsory hold on trade transactions.

Some Major Impacts in the Logistics Sector

Analysts have indicated that the Nigerian port industry will experience a decline in ship traffic as well as a drop in the volume of imports coming into the country and exports originating from Nigeria to other countries in this second quarter of the year.

Given the decline prediction, analysts also predicted that there would be a corresponding drop in government revenue as federal government agencies such as Nigeria Customs Service (NCS) and other agencies that generate revenue from authorizing these cargoes would also lose out significantly. Because of this, the NCS might not meet its revenue targets for 2020 owing to the impact of Coronavirus which is already causing a decline in the volume of imports.

In addition, carriers have blanked over 25 sailings on the transpacific route, with primary reasons of weak demands in China. Liners such as Maersk, MSC, and Hapag-Lloyd recently announced additional blank sailing to match reduced market demand over the crisis that has transpired in the maritime space in China these past few months.

To help ease freight bottlenecks, some carriers, including American Airlines, Qantas, Delta, Korean Airlines, and Deutsche Lufthansa, are making use of their passenger planes to work as freight aircraft. The strategy is to keep the main cabins empty and fill the belly with cargo shipments.

Moving Forward

Even with the negative impacts, the world needs the logistics sector now more than ever. The industry plays a vital role in the transportation of essential products, from food to medical equipment, test kits, and masks. Beyond the immediate response to the pandemic, logistics will be key to supporting long-term economic recovery. According to 3pl Logistics,  the sector makes up about 11% of global GDP, and, as the backbone of global trade, supports countless other industries.

The government and key stakeholders have started taking concrete measures to support logistics infrastructure, services, and workers:  

1. Recently, the Nigerian Shippers’ Council (NSC), brokered an agreement between Nigerian Railway Corporation (NRC), and the APM Terminal on rail evacuation which had earlier been temporarily suspended. The arrangement was necessary to enhance operational efficiency, and to encourage a multimodal approach to cargo evacuation especially within this period of COVID-19 pandemic.

2. The International Road Transport Union has called on bodies such as the UN and the European Union to keep logistics chains open and provide financial support to operators so that they can, in turn, sustain the economy. Of course, for this to work, the International Maritime Organization has provided guidance to authorities on the facilitation of maritime trade to keep the port infrastructure running and protect the safety of workers.

3. Also, an increasing number of ports are also implementing enhanced health declarations for workers, expanding health screening protocols and facilities, and scheduling appointments for ships and trucks to enter the port so that they minimize waiting times and interactions.

4.The governments are not left out also. Some governments like Denmark and Sweden have started providing loan guarantees to their flag carriers. This should help these carriers carry out their maritime activities efficiently.

5. Various logistics companies have announced measures to protect their employees and adapt operations. These include segregated shift schedules and warehousing locations for safe-distancing, review of business continuity plans, as well as sending out encouragement letters to their clients and assuring them of quality service.

6. As a logistics and freight forwarding company. We have also taken these initiatives and announced them to our employees and clients alike, on safety measures that need to be taken. Click here to read our announcement.

These initiatives are important first steps in the right direction. Ambition, coordination, and innovative thinking will be critical—not just to deal with the current emergency, but also to prepare for economic recovery and sustainability.

Read more about the services we provide here.

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