Enormous pressure on the logistics and supply chain sectors from the unprecedented growth in delivery volumes has exposed operational and workforce vulnerabilities, according to global risk management provider, SAI Global.
The provider warns continued growth – particularly with the new Regional Comprehensive Economic Partnership – will test the sector over the next five years with strong management systems the key to success.
Prior to the pandemic, the transport, postal and warehousing sector was projected to grow 6.6% in the five years to May 2024. But since March, leading parcel delivery companies were reporting volume growth of up to 80%.
SAI Global technical manager, Daniel Havers said the unique circumstances that instantly drove consumers to buy online rather than in store gave the logistics industry no time to assess customer demand.
“Instead, they were forced to simultaneously solve shortages in staffing, transportation, distribution capacity or employee PPE as they occurred, causing delivery delays. As a result, workforce vulnerabilities were exposed and forced the industry to tackle them on the spot,” he said.
“Businesses had to implement social restrictions in their workplaces, slowing down production at a time when volumes were booming. Worker fatigue presented risks in the physical and mental safety of workers on the road, in depots and in warehouses. Those businesses that quickly hired new workers to service the demand may have had little time to train and onboard them thoroughly.”
Havers expects high volumes to not only continue beyond 2021 but to increase further as a result of the new Regional Comprehensive Economic Partnership signed by Australia and other Asia-Pacific countries.
He says early 2021 is a good time for the logistics sector to embed long-term improvements into the fabric of their operations and workforce. An effective method is ensuring internal systems meet international best-practice benchmarks.
“Short-term operational improvements to help handle higher volumes or introducing a new policy or process won’t help organisations adapt fast enough to situational changes. Ensuring systems meet international standards, however, is extremely effective and, over the long term, minimises the risks of serious internal issues and puts the business in position for increased success.
“Too often, businesses implement a basic management system to meet minimum requirements, but the functional framework provides little or no added value to the business itself. Management systems must be tailored to the context of a business and its strategy, in the context of potential risks and opportunities, to adequately prepare the business for situational change.”