The COVID-19 pandemic has dealt a massive blow to the global economy. On the supply side, factories and businesses have been forced to close temporarily due to the shortage of input materials from suppliers and the need to protect workers. Demand is declining, too, as consumers stay home and face the prospect of a large-scale economic downturn.

Against this backdrop, the March 2020 purchasing managers’ index (PMI), which reflects the economic health of the manufacturing sector, slumped to a 92-month low in the Eurozone and also decreased significantly in most Southeast Asian countries.

This confluence of supply and demand shocks have put considerable pressure on the logistics sector.

The decrease in cargo volumes is threatening the business viability of many logistics companies. In February alone, shipping lines cancelled 105 sailings on routes from Asia to North America and Europe. Likewise, the Center for Aviation estimates that most airlines will be bankrupt by the end of May without government help.

The pandemic and lockdowns are also creating a host of operational challenges. The Indian Foundation of Transport Research and Training estimates that 500,000 drivers and cargo workers were stranded at checkpoints across the country during the implementation of the nationwide lockdown.