How the logistics sector is dealing with the COVID-19 pandemic

The logistics sector has been hit hard by the ongoing COVID-19 pandemic, and companies are struggling to stay afloat amidst reduced business and disrupted supply chains. Gerald Mukyenga, the Group CEO of Multilines International, a regional logistics company, shed light on the impact that the pandemic has had on the industry during an interview with CNBC Africa. Mukyenga highlighted several key challenges that the logistics sector is currently facing, including a sharp decrease in business, disrupted exports, non-tariff barriers, and health risks for essential workers. With many countries imposing restrictions on movement and trade to contain the spread of the virus, logistics companies are forced to adapt to survive in these challenging times. One of the major impacts of the pandemic on the logistics industry has been the reduced business due to disrupted supply chains originating from China. With most imports into East Africa coming from China, orders had to be put on hold, leading to a decrease in work for logistics companies. Additionally, the disruption in commercial flights and cargo services has made it difficult for companies to export goods, especially perishable items like flowers. The lack of available freighters and the halt in passenger flights that transported cargo have further exacerbated the situation, leaving many logistics companies struggling to find markets for their products. The implementation of non-tariff barriers by some countries in the region has also posed a challenge for logistics companies. Mukyenga mentioned a recent incident where Kenyan authorities stopped Ugandan and Rwandan drivers from crossing into their country, citing public health concerns. This has disrupted the harmonization of working relationships between countries and created challenges for cross-border trade. Moreover, the health risks faced by essential workers in the logistics sector have added another layer of complexity to the industry's operations. With cargo trucks having to move goods across borders, drivers are constantly exposed to the risk of infection as they travel from one country to another. This has forced companies like Multilines International to implement various safety measures, including reducing staff, working in shifts, and promoting a work-from-home policy for non-essential employees. Mukyenga emphasized the importance of cutting costs and conserving cash reserves to survive the current economic downturn. By negotiating with creditors and service providers, deferring payments, and exploring new business models, logistics companies can weather the storm caused by the pandemic. Mukyenga highlighted the significance of having a cash reserve for unexpected crises like the current pandemic, which has helped Multilines International stay afloat during these challenging times. As the logistics sector continues to face unprecedented challenges, companies are urged to innovate, adapt, and collaborate to navigate the uncertain terrain ahead.