Questions about your challenges?
Do you have questions regarding your challenges during the coronacrisis? Please contact your trusted Mazars adviser or use the contact form.
The breadth of the transport and logistics (T&L) sector makes it difficult to draw generalist conclusions. We see large discrepancies between different types of players – passenger transport versus cargo transport for example. Various factors also need to be taken into consideration, such as transport by air, rail, road and sea. In times of confinement and tighter border restrictions, distinguishing between international and national players is equally pertinent. And finally, there exist many different types of cargo: container, bulk, liquid and general.
All players will require very specific and tailor-made solutions to navigate through the storm, adapted to each unique situation and needs. However, businesses should all reconsider their strategic plans for the next years as soon as possible, asking themselves “what are the lessons learnt and what does it mean for my organisation?”.
Looking at those who have managed to adapt the fastest to this unprecedented situation will highlight areas to consider when preparing for the post-Covid19 era. The remarkable agility of some players who have rapidly resumed activity by making use of technology to exchange capacity between various actors and to manage very large operations remotely is particularly noteworthy.
The commerce players and the associated T&L are among those least negatively affected by the crisis. Logistic providers to supermarkets are equally in good shape, currently hiring in large numbers to respond to the exponential demand in food deliveries. The most severely impacted on the contrary is passenger transport. From cars, to trains and planes, to public transportation, everything is practically on standstill. The world of cargo has also suffered losses, in particular due to tighter regulation and border controls, as well as the severe loss of traffic to and from China. The associated costs to this downturn are huge and include blank sailings, grounded planes, containers pilling up on quays and demurrage to name a few.
Some sectors such as tourism, hospitality, construction and catering are also severely touched, which by domino effect has consequences on T&L. Will this have structural consequences on the sector? For instance, will cruise ships be as popular in the future as they were in the past?
In all cases, organisations should dedicate time and resources to prepare for the after crisis and to plan their post-Covid19 strategy. There will be a number of novel trends to take into consideration such as new business models, bankrupt players and the success of working remotely. Below are some observations – formulated as questions – to help think and prepare for a new normal:
It is still too early to draw any solid conclusions on the long term effects of Covid-19 on the T&L sector. However, the economic downturn has had evident positive repercussions on the environment and we can suppose that the slowdown of T&L has played a part in this. In the future, this may impulse the wider integration of ecological and sustainability considerations into strategic planning.
Do you require more information? Please contact Remco Schoonderwoerd by email or by telephone +31 (0)88 277 16 45 or Pieter Tra by email or by telephone +31 (0)88 277 18 85. They will be happy to help you.
[1] https://www.flightradar24.com/blog/charting-the-decline-in-air-traffic-caused-by-covid-19/
[2] https://www.business-live.co.uk/retail-consumer/supermarket-sales-smash-christmas-covid-18011745
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