Reflections and perspectives for a marine industry affected by coronavirus

Experts raise a possible diversification of suppliers and the need to reconsider the expansion of mega ships

The coronavirus pandemic (Covid-19) has had significant impacts on various sectors of maritime transport, which is why the industry has had to adapt to the changes imposed and has taken emergency measures to help mitigate the effects of the virus, but which at the same time, they guarantee the continuity of operations in the future.

During the III Integrated Congress of Free Zones, Ports and Logistics "Reality and future in the logistics chain 2020", organized by the National Association of Entrepreneurs of Colombia (ANDI)UNCTAD Economic Affairs OfficerLuisa rodriguez, released certain reflections that the coronavirus has left for the maritime industry.

Diversification of suppliers and mega ships

Rodríguez explained that “andhe Covid-19 highlighted the great vulnerability of supply chains, due to the risk of depending on a large supplier. The importance of China from the point of view of container traffic was seen. It is a great supplier and it also weighs significantly in maritime transport”. According to UNCTAD figures, in 2018 a quarter of world maritime trade was from China and during the last decade half of the expansion of world maritime trade was from China.

It should be noted what happened in the context of this health crisis, where medical supplies became essential. However, there was only one large global supplier, which was also in confinement: China.

Given this, Rodríguez raised the possibility of having a strategy based on the diversification of suppliers. “Going for a strategy of developing resilience means diversifying the supplier base”. Although he stressed that it is necessary to take into account the changes that such diversification could mean. "This may have an impact on the deployment patterns of the shipping companies (...) There are several scenarios that are being handled regarding how these value chains will change, but it is still too early to say 'The pattern will be this'"He commented.

On the other hand, he recognized that the pandemic led to rethinking the need for mega-ships. It is necessary to mention that from the first quarter of 2019 until the second quarter of 2020 the size of the deployed ships was not affected by the Covid-19. However, Rodríguez postulates that it is worth reconsidering the situation. In accordance with the analyzed trend, there has been a slow growth in maritime trade, while the supply of capacity within ships is growing more rapidly. Therefore, there is an imbalance, which in the context of the coronavirus could generate complications.

According to figures provided by Luisa Rodríguez - to be published soon by UNCTAD - trade growth for 2019 in terms of demand was 0,5%. In contrast, supply grew 4%. “If we are going to have a recessionary situation, how is this demand going to recover? That is a question, we have that uncertainty. In a scenario that is not very positive - and the current scenario is not very positive - these mega-ships are worth rethinking at the shipping company level”, he claimed.

Projections

In turn, the Professor of Logistics at the University of Los Andes from Colombia, Gordon wilmsmeier, who also participated in the ANDI Congress, referred to how the industry makes projections for development and how this could affect the future as a result of Covid-19.

In this sense, he stated that the sector generally does not consider possible risks. “We do not reflect on possible futures when we talk about projections (...) It is right there where we have to change our visions (...) We should imagine a future with zero growth or what a non-growth scenario would be like and if with these scenarios we could position ourselves"He said.

In this sense, he stressed that in the current emergency "You have to have a large variability to later have a greater adaptation in the event that a risk comes to us."

Source
Maritime World

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