Global trade, shipping business and supply chain industry will return to growth next year following positive news on the coronavirus vaccine that will help restore confidence in the economy, experts say.
Top executives in logistics and shipping sectors said the Covid-19 pandemic sent shockwaves through global maritime transport during the first half of 2020 but it also laid the foundations for a transformed industry and associated supply chains that will help revive trade activity worldwide.
Sachin Gupta, general manager of Gulf Pinnacle Investments (GPI), the UAE subsidiary of Gulf Pinnacle Logistics, said the pandemic hit global trade by causing disruption in supply chains, shipping networks and ports. However, the situation is improving due to quick progress on the Covid-vaccine development.
“The industry has survived the pandemic shock and challenge. The short-term outlook for maritime trade is still grim but we are confident of economic recovery and expect better growth numbers next year,” Gupta said.
Gulf Pinnacle Logistics is a logistics and transportation company that aims to become an ‘integrator’ of the highly fragmented mid sector market, encompassing four business models — freight-forwarding, warehousing, road transportation and courier and e-commerce services. The company accords top priority to make international trade more seamless for the mass market that cannot afford the large-scale players.
Covid-19 hits trade
Referring to the United Nations Conference on Trade and Development’s latest report, Gupta said global maritime trade will plunge by 4.1 percent this year due to the unprecedented disruption caused by the Covid-19 crisis.
“Maritime trade growth will return to a positive territory and expand by 4.8 percent next year as the industry braces for a change and ready for a transformed post-Covid-19 world,” he said.
To a question about the impact of the pandemic on logistics and business, he said there is an urgent need to invest in risk management and emergency response preparedness in transport and logistics.
“We adjusted our operations, finances, sanitary and safety protocols as well as working practices and procedures in line with the government policies and advisory that helped us to minimize the impact of the pandemic,” Gupta said.
Rodney Viegas, chief executive of Abdul Muhsen Shipping LLC and So Safe Logistics LLC, said shipping industry adopted a more resilient and disciplined approach to handle the Covid-19 crisis.
“We evolved a comprehensive plan to sustain business growth and avoid supply disruptions despite challenging environment in the wake of the Covid-19 crisis,” he said, adding that continued and coordinated stimulus as well as prudent trade policies would have to be put in place to put the industry back on track at the pre-Covid-19 level. Abdul Muhsen Shipping LLC was established in 1991 to provide shipping and warehousing services, focusing on import and export services mainly by sea through the Jebel Ali Port. The company has its head office in Dubai and the warehousing facility in Jebel Ali Free Zone.
New industry trend
Viegas said the pandemic has set new trends in the industry that may hit the maritime trade in near future.
Elaborating, he said the Covid-19 pandemic forced many countries and governments to look inwards for imports of key goods and exports to support their own economies.
“This is not an encouraging trend for the shipping industry and maritime trade and we must be prepared to handle such challenges in future,” he said.
Referring to the McKinsey Global Institute, he said up to 26 percent of global trade could be relocated in the medium term. “This would involve some combination of a return to domestic production, near-shoring and shifting to other offshore locations, with a new balance having to be found between just in time and just in case,” according to the report.
Source: Khaleej Times