Shipping Trends: 5 External influences that affect the logistics marketplace
By Edwin Schuijt, Technical Director at ShipitSmarter
Driving your business and strategic plans from an inside-out perspective will no longer be sufficient to reach your objectives. You must take all relevant external influences into account. This blog dives into one of the 3 shipping trends for 2021; the external influences that affect the marketplace.
1. Covid-19 turns into offline business opportunities
Although vaccines are now available, it will likely take until the autumn of 2021 to achieve herd immunity against COVID-19, at least in parts of the world that have the funds to acquire vaccines and the knowledge and resources to distribute them. Given seasonal weather patterns that can influence how the Coronavirus outbreak evolves, the pandemic in the Northern hemisphere might not be under control before the end of April 2021. This will cause an enduring, increased number of online retail sales and local package deliveries. If by April the measures against coronavirus are eased, allowing people to move around more freely and offline retail sales to grow, we might witness a decline of online retail business.
2. Brexit needs an economic miracle
Brexit has been around for over a year, but more in name than reality. A hard landing is in place, causing a distribution funnel, if not a nightmare. Where possible, warehouses have been stocked, lowering the overall shipping movements for business to business in the first quarter of 2021. Whether shipping will soar after the initial stagnation will depend on economic developments. After the first quarter, we predict that nothing short of an economic miracle can prompt a serious growth in shipping movements between Europe and the UK.
3. New US administration raises global business opportunities
With the Biden administration in place, the general sentiment is that trade agreements will be opening up and boost international cooperation, more so than under the outgoing administration. Opportunities for both manufacturers and shipping providers will increase worldwide. Usually, when international cooperation rises, so do business opportunities and accordingly, the number shipments.
4. Alice roadmap should be on your agenda
Who or what is Alice? The Alliance for Logistic Innovation and Collaboration in Europe (Alice) is a programme funded and stimulated by the European Union, focussed on implementing a logistics vision for the future and based on the principles of the Physical Internet. The Alice roadmap entitled “Towards Zero Emissions Logistics 2050” will be a driving force for a standardised self-routing packet scheme, while improving the social and environmental footprint of shipping. Not a revolution, but an evolution towards sustainable logistics. Subtle, yet important changes can be expected in mobilising local freight carriers and improving truck utilisation.
5. Macroeconomics increase the need for innovation
Given the current worldwide lockdowns, employee lay-offs and the surge of business loan defaults we predict an inevitable decline in the movement of goods. This all spells bad news for the world of logistics, reverting to the trend of 2020 to a mild decrease of freight transport activity in the second half of 2021. At the same time, low interest rates and available private equity for innovative initiatives could potentially spark higher shipment volumes and increased quality of services in the freight transport market.
Most of your success depends on how fast and how well your organisation can adapt to external circumstances. Are you able to harness technology that will both enable your workforce in the “new normal” and embrace IT-technology that contributes to the growth and development of your organization? Indeed technological innovation can become a threat when investments in this field are delayed or even ignored. But with the pandemic still looming, it also means exploiting and realising the value of the technology that you already have or at arm’s length – and at last retiring the technical debt holding you back.