The COVID-19 pandemic has impacted every part of the economy and the warehousing industry is no different. The logistics industry has been hit hard, particularly when it comes to imports and exports. Now, numbers are being reported that back up these findings. According to a report that was released by the Commerce Department, export numbers in the United States fell by record margins during the month of March. They declined to a record that hasn’t been seen in more than 10 years, as the pandemic has brought the entire industry to a halt, with all non-essential travel and trade being stopped.
The Numbers from the Commerce Department
The overall gap when it comes to goods and services has widened to a record $44.4 billion. The number of exports dropped from February to March as well, falling by close to 10 percent to just under $188 billion. The same is true of imports as well, dropping by more than six percent to just over $232 billion. These numbers show that foreign trade is being disrupted on a scale that hasn’t been seen in more than a century.
Heading into the pandemic, the global climate was already disrupting the supply chain throughout the world. Now, the supply chain disruptions have become extreme. This has had a severe impact on imports and exports, as a drop in demand has led to record unemployment numbers. The largest economy in the world has ground to a halt, impacting every sector of the economy.
The Details of the Supply Chain Issues
It is helpful to take a look at the details of the supply chain issues. There are scary numbers that indicate just how badly the world’s economies are being impacted. The MSCI World Index of Global Stocks is down by around 15 percent since the Wuhan lockdown started on January 23rd. This shows that global economies are being hurt severely, driving the issues highlighted above when it comes to foreign trade.
In response, the United States economy is contracting as well. Even US Treasury bond yields are down by more than 1 percent. Global GDP, which has been annualized, may contract by more than five percent, according to Bloomberg.
A significant amount of the decline seen in exports and imports can be ascribed to tourism. Travel exports dropped by close to half in February while imports dropped by close to two-thirds; however, every sector of the economy has been impacted.
What Happens When Global Economies Start to Reopen?
Eventually, the global economies are going to reopen. When this happens, the supply chain, warehousing, and logistics industries need to be prepared for a surge in demand. Right now, there is a pent up demand for goods and services that cannot be relieved due to the self-imposed restrictions. As these restrictions ease, expect demand to surge. It is important for businesses to be ready to take advantage of this changing climate. The industry will recover along with the rest of the economy.