Recovery

Experts discuss plausible route to recovery amid distress in the Global Supply Chain

Post By : Karvi Rana
Post Date : December 5, 2020
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Reading Time: 3 minutes

Amid the second wave of the pandemic in the US and Europe disrupting the recovering Global supply chain, Logistics Insider, in association with Jeena & Company, organised a special LinkedIn Live event with the intention of bringing forth key insights on the present scenario on the theme “Global Supply Chain on the Qui Vive”.

The event which went live on 4th December 2020 was opened for discussion by Malcolm D’Souza, GM- Commercial, Jeena & Company, who also brilliantly moderated the event.

While delivering his opening remarks, he said, “Creativity, innovation, thinking out of the box and collaboration have helped all of us. Digital transformation has kept the trade flowing by keeping people safe example, many governments including India have started faceless customs clearance. Government agencies are now pushing for reforms even faster than the trade. Globalisation has changed, it is being pushed back from outsourcing from distant locations, the focus is now on shortening the supply chain and change inventory modal.”  

Mr. D’Souza took the discussion forward starting by discussing the impact of COVID on the global supply chain.

Charles Brewer, COO, Canada Post, answering the same said, “COVID pandemic has changed the logistics universe. COVID has pushed the volumes up considerably anything between 4-10x depending on the different area, the size and shape of the volume have changed dramatically, health and safety are at the fore- we have heightened health and safety measures including physical distancing but it means for logistics is lower productivity. The number of packages that one moves from the plant because of physical distancing and absentees, have changed considerably. So, more volume, different shape, and lower productivity equal a bit of a challenge.”

“The demand is far-far greater than supply in every sector whether its air, ocean, rail, e-commerce, road. The demand from sellers whether they are big sellers or smaller sellers of brands, there demand space is considerably greater than the logistics sector can provide, which causes all sorts of challenges including the price of transportation going up quite considerably.”

~Charles Brewer, COO, Canada Post

He concluded by saying, COVID is a two-sided coin, while we have a lot of challenges on how we operate in the COVID world but it also means that there is an opportunity for the logistics provider if they create the right platform and infrastructure to create a successful and sustainable business.”   

While painting a picture of the impact of COVID on the shipping lines, Capt. Rahul Bhargava, Director-Commercials & Ops, Essar Shipping said, “We need to know what is happening around us to know what will be the future like for the shipping industry. The container ships have suffered the worst in Q1 and Q2, the dry bulk market suffered in June-April thereafter recovery has been seen although it is slow. We saw the tanker market make a jump as the price of crude oil dropped, however now some rationalism and stability are being observed.”

Further shedding some light on the future, he said, “The next 6 months will be derived from two major factors, China’s relation with the US, Taiwan, Japan, and India, and the second is the vaccine for the pandemic”.

“Today the US president Joe Biden addressed the season as black winter. We are seeing the pandemic continue in the US and Europe which means the situation for the global supply chain will remain the same for another 2-3 months. And, the mass distribution of vaccine is also expected by 2021 Q2, he said. The markets have improved over a period of time in Q3-Q4 and we expect it to continue like this before we see a real good boom coming up in the second half of 2021.”

~Capt. Rahul Bhargava, Director-Commercial & Ops, Essar Shipping

The event also touched upon the shift of outsourcing from China to other countries and discussed the readiness of the other countries to handle the demand in the post-COVID world. Throwing some light on the same, Mr. Ruwan Waidyaratne, MD, Hayleys Advantis Limited said, “We have seen the movement of productions of companies from China which has come as an opportunity for countries like India, Vietnam, Malaysia, etc. This is certainly going to happen. It has also given rise to concepts of in-sourcing countries looking at capacities within rather than outside. And, countries are also looking at sourcing from regions. So, Mexico is also going to be a hotspot for supply bases. People are looking at multiple sourcing options, and that is something that our region can capitalise on.”

While discussing India’s readiness on increasing priority on flexible warehousing and decreasing reliance on just-in-time shipping, Nikhil Jain, CTO, Seros Logistics said, during the pandemic the country has realised the need to refocus itself on warehousing.

“We have observed organisations and logistics companies making efforts towards setting up more warehouses in the nation, the government of India has also come up with subsidiaries to help people set up new warehouses. So, I see India is gearing up for the supply chain with more priority towards warehousing and less reliance on Just-in-time shipping.”

~Nikhil Jain, CTO, Seros Logistics

The event which witnessed the traction of 1100+ viewers also touched upon points like the Congestion crisis and rates at Colombo & Chittagong, the shift toward digitalisation, and much more.

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