It’s an ill wind that blows no one any good. While much of the world is in lockdown during the Coronavirus crisis, which is taking such a heavy toll both on human life and on corporate life, there are some industrial sectors that are doing extremely well.
We have over the past few weeks witnessed logistics operators doing what they do best: responding to rapid changes in demand patterns with new flows and urgent deliveries. That has been especially true in the healthcare sector and in domestic deliveries of groceries and other necessities.
In the bulk liquids sector, operators have faced unprecedented business conditions. That has certainly been very good news for tanker operators, particularly in the larger sectors – a glut of crude oil, as a result of the collapse in end-user demand for transport fuels in particular, has offered sky-rocketing freight rates as well as good business for older vessels for use as floating storage.
All along the supply chains, producers that have been unwilling to curtail output, either because of cost or – especially upstream – the sheer practical difficulties of doing so, have been casting around to look for places to hold these excess volumes. In the US, rail tank cars are being repurposed for storage purposes, and storage terminals around the world are filling up with superfluous inventory.
Perhaps more surprisingly, the tank container sector has also been enjoying something of a boom, with operators, depots and haulage companies all reported to be very, very busy. HCB hears that customers are not focusing on price during the current crisis; rather, then are looking for service, and that is something that tank containers can provide, with their built-in flexibility and dependability.
It is as yet hard to see how all this is going to pan out in the end, although there are some lights at the end of the tunnel. China is already back up and running, although there is always the threat of the virus reappearing. And it looks certain that it will be some months before the impact of the crisis on commercial activity in Europe and North America returns to anything like ‘normal’ levels.
What is more problematic at this point is international containerised traffic, with ports around the world instituting restrictions on vessel calls and on shoreside working. That has highlighted just how global some supply chains are these days although, with consumer demand for non-food items having almost disappeared, many supply chains do not currently place much demand on the liner trades.
Will those supply chains return? In a post-Coronavirus world, will consumers behave just like they did before, or will the stresses of the current crisis make them think about their behaviour and change their buying patterns? Will we ever go back to thinking nothing of hopping on a plane to fly across the ocean, or even for a weekend break in some picturesque city?
And possibly worse: what happens when we all get back to the office once the lockdown is over, and find that our corporate memory has potentially been impacted by furloughs and redundancies? Will the dangerous goods supply chain be able to manage that loss of expertise? Keeping up to date with developments will be even more crucial and HCB is keeping its fingers crossed that we will be there to help. Meanwhile, stay safe.
Peter Mackay[post_title] => Editor's letter from isolation [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => editors-letter-from-isolation [to_ping] => [pinged] => [post_modified] => 2020-04-13 08:51:05 [post_modified_gmt] => 2020-04-13 07:51:05 [post_content_filtered] => [post_parent] => 0 [guid] => https://hcblive.com/?p=19482 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )