Covid-19 Pandemic: Early Implications for North European Manufacturing and Logistics

Abstract

From early 2020 onwards, the world has been going through an unprecedented wave of lockdowns, shutdowns, and preventive measures due to the Covid-19 pandemic. It is evident that these have been harmful for tourism, passenger transport, and the service sector in general. However, less is known regarding the implications for manufacturing and logistics, which is the purpose of this research. We concentrate on reporting survey findings from Northern Europe, and mostly from Finland. Based on trade accounts, it is evident that Covid-19 has had significant impacts on Finnish import and export. However, in survey responses, companies report that they have mostly been able to serve customers in a good fashion, and the pandemic has increased transportation costs only moderately. Inventories might experience an increase due to the virus, however, in the longer term they will likely remain at the earlier levels (or slightly increase). Companies are mostly afraid of the effects of the second wave of the epidemic, and are also already thinking about the long-term issues with transportation modes used together with supply chain dependencies. For example, the Chinese and, in part, Russian, markets are increasingly being served by railways during the current decade. For some companies (especially small and medium-sized ones) and foreign trade markets, however, the epidemic era has been very harmful. Therefore, as a conclusion we argue that the pandemic is causing rather asymmetrical impacts on manufacturing and logistics.

Impact of the COVID-19 crisis on SMEs and possible innovation responses

“…The data on foreign trade show that COVID-19 had a significant downward impact on Finland's exports and imports (a 20-30% decrease compared to December 2019), while the survey results reveal that most of the companies surveyed (75.4%) were able to successfully meet their customer demand requirements, that most of the companies did not have increased transportation costs due to the pandemic (although 44.3% respondents expected transport costs to rise), and that the pandemic might lead to higher inventory holdings, but in the longer term the respondents expected the inventories to return to the previous levels. This research shows that the pandemic has had asymmetric effects on manufacturing and logistics as some companies (particularly SMEs and some foreign markets) were more affected than the others [20].…”

Resilience Lessons From the Southeast United States Woody Pellet Supply Chain Response to the COVID-19 Pandemic†

“…The shutdowns that began in March 2020 curtailed economic activity, employment, and provision of goods and services around the world (Hilmola et al, 2020;IRENA, 2020). Volatility was observed in many markets due to mismatches in supply and demand.…”

How is COVID-19 altering the manufacturing landscape? A literature review of imminent challenges and management interventions

“…Italy’s industrial production decreased by 28.4%, and its stock exchange was on a high–low decline of 42%, adversely impacting Italian GDP (Rapaccini et al, 2020 ). Interestingly, some other figures for overall trade volumes are rather consistent, or even on a slight rise, for China and some parts of Northern Europe like Estonia; but foreign trade for Finland dropped by nearly 30% (Hilmola et al, 2020 ).…”

“…The most affected manufacturers are those that are heavily reliant on global supply chains, international labour and export-intensive operations (Harris et al, 2020 ). Matters are worse for manufacturers that have not diversified their suppliers (Hilmola et al, 2020 ; Linton & Vakil, 2020 ) and for those that rely on foreign low-cost suppliers to avoid expensive regional ones (Handfield et al, 2020 ). While relying on single and/or foreign suppliers may keep costs and other targets in check, the strategy backfires in crises such as the COVID-19 pandemic (Juergensen et al, 2020 ).…”

“…Secondly, significant research is available on COVID-19 (Choi, 2021 ; Gupta et al, 2021 ; Khalilpourazari & Doulabi, 2021 ) in a supply chain context (Ivanov & Dolgui, 2020 ; Ivanov, 2021a ), humanitarian logistics in an epidemic context (Kumar et al, 2021 ; Wamba, 2020 ), and in other contexts (Adamovic, 2022 ; Chipidza, 2021 ; Dwivedi et al, 2020 ; Islam et al, 2022 ; Papadopoulos et al, 2020 ; Shirish et al, 2021 ; Trkman et al, 2021 ). However, an accumulative understanding of such a widespread event in manufacturing is rather limited (Hilmola et al, 2020 ; Paul & Chowdhury, 2020b ; Queiroz et al, 2020 ). This gap in the literature further justifies the importance of our review.…”