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The global logistics industry had a turbulent 2019, registering 1.2% in merchandise trade volume growth due to the stagnant global economy, trade disputes, geopolitical uncertainties, and environmental regulations. In Q1 2020, the COVID-19 outbreak flipped the growth switch in every area of the economy, and the global supply chain is no exception. As the global economy grapples with the pandemic, its impact on global trade and the supply chain is mounting with rapid deterioration in global trade and investment flows. Stringent containment measures resulted in a sharp decline in economic and trade activities. Concurrent demand and supply shocks impacted the global logistics ecosystem, resulting in significant disruptions that forced governments to announce stimulus measures.

The dramatic contraction in Chinese output has hampered the global manufacturing supply chain, reducing the cargo volume in the major ports of China and increasing bottlenecks in the domestic road freight transport. Industries that rely on the Chinese supply base for intermediate and finished products, with lean and just-in-time inventory models, are expected to shift their production logistics using near-shoring by increasing inventories to warehouses in their domestic markets.