Air Cargo Post COVID19 Assignment Sample

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• Subject Name : supply chain

Due to covid-19, international trade have already suffered a sharp drop. Most of the countries have faced the massive lockdown and due to this trade activities is affected badly. Many of the workers lost their job. Companies faced lack of money due to temporarily shut down activities. Hence now there has been some relaxation in competitive policy.

COVID -19 Pandemic has changed the world trade and completely disturbed the supply chain , all industries have shut and ceased their production and trading activities , all forecasts and growth plans have taken a dip , worst hit among this is supply chain and Air Cargo. Lockdown has restricted the movement of the human beings, even the essential and emergency travel is restricted. Earlier the projection of the industry was $3215 billion in large for 2021 but now it is highly unpredictable.

The COVID-19 pandemic is affecting the businesses uniquely and differently. Today’s businessmen have never witnessed such a situation in the past. It is one of its kind. The pandemic has locked every individual in their houses and has also disrupted the business processes. The businessmen are not able to perform their operations in the company. It is because of no labour and the fear of transmission. The disruptions have left significant effects on the companies and the economy. The supply chain is a series of operations and processes that the company uses to produce and distribute it. The company is not able to perform both the functions of production and distribution. The first and foremost issue in the supply chain is the problem grocery retailer’s face. The grocery retailers are out of stock and cannot import from other stores or countries. It has led to a lack of necessities in the world.

Performance - Region wise

All over the globe airlines have suffered a severe decline in year on year growth in total air cargo volumes in Feb2020, whereas North America and Asia Pacific experience more moderate fall, Table bellows shows the business fall as compared in Feb2019.

As per SP Global, It is expected that GDP will be down by 7.8% in Eurozone with service tax being hit hardest, before growth resumes next year up 5.5%. But Quick responses from the Govt for fiscal and monetary policy have been successful in ensuring that companies have liquidity.

Impact of Corona virus (COVID19) on operations/ supply chain

1. Supply of raw materials has become a big challenge, especially for the companies which were dependant on China

2. Industries ,which depend on the import from other countries will have tough time ahead till they normalize their operations and air cargo restores their normal operations

3. Working capital is going to become a major challenge

4. Availability of labour is a major concern

5. Sales of distributors and retailers will be hit very badly

6. Even after the lockdown is removed, it will take quite some time for the supply chain industry to come back to normalcy in terms of manpower, working capital, logistics, sales and availability of raw materials

Air Cargo Supply Chain Opportunity Post COVID-19

ICAO is working hard with Airport Council International in monitoring the COVID -19 Situation and developments to leverage their expertise and analysis on the economic impact and predict the future ahead. The analytical timeframe has now been extended to Mar 2021 and therefore cover the full year of 2020 and Q1 2021.

The world economy has collapsed and all developed and developing economies are fighting fir their survival, countries are supporting their citizens by supplying essential commodities as the situation is getting worst day by day. It is highly unpredictable to plan anything till world has solution to this issue. The only thing everyone is doing is assuming that post COVID situation things will improve and will restore normalcy.

Demand for essential commodities because of COVID-19 at top level and Especially medical equipment like mechanical ventilator, mask., etc. and medicines like hydroxychloroquine demand is increasing rapidly because of its effectiveness in COVID-19.

Disruption in Supply chain has also created increase in demands for the products from the manufacturing hubs like Asia, and Africa because these are the countries which can produce and supply in bulk to cater the demand for rest of the world due to business operational crisis. Develop nations will take longer time to restore the normalcy due to huge human loss especially countries like Italy and America. This will open the opportunity post covid 19 to the Air Cargo industry to be part of business growth and opportunity available to Asian Countries.

Key Supplies like Pharmaceuticals, Food supplies, Medical Equipment’s, Defence items and other Trade material will not be affected by the crisis, and it will be same as earlier post Covid 19 also.

Tourism is a one of key area which every air cargo is banging upon that it will increase because after the crisis , people will not only move but all travel industry due to business travel and tourism will boom. As everything is struck for so many days and months, passengers are waiting to travel. Passenger plane slowly but will surely improve and will have impact on number and fare for air travel.. As the lockdown will end soon so recovery is now expected to start soon as the process of unlock has already started and air travels have slowly and slowly resumed but surely the loss it has done is irrecoverable, But growth can be expected in 2021 due to movement will start in next year beginning which is long pending, people have struck and waiting to travel.

Reference

www.iata.org. (n.d.). Air Cargo Demand Slumps in February as COVID-19 Takes Hold. [online] Available at: https://www.iata.org/en/pressroom/pr/2020-04-01-01/.

www.spglobal.com. (n.d.). COVID-19 Impact: Key Takeaways From Our Articles. [online] Available at: https://www.spglobal.com/ratings/en/research/articles/200204-coronavirus-impact-key-takeaways-from-our-articles-11337257.

OECD (2020). Tourism Policy Responses to the coronavirus (COVID-19). [online] OECD. Available at: https://www.oecd.org/coronavirus/policy-responses/tourism-policy-responses-to-the-coronavirus-covid-19-6466aa20/.

www.everycrsreport.com. (n.d.). Global Economic Effects of COVID-19. [online] Available at: https://www.everycrsreport.com/reports/R46270.html [Accessed 30 Jul. 2020].

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