Global freight flows after COVID-19: What’s next?
COVID-19 will likely affect trade more profoundly than any other recent crisis. Leaders with a well-informed perspective on potential trade scenarios can begin their recovery from a position of strength.
As we witness the global health community’s remarkably determined response to COVID-19, we have also observed actors in every area of the economy react to the current challenges with innovation. Global logistics is no exception.
The pandemic will very likely hit global trade deeper and for longer than we have seen in other crises of the recent past. The extent of the disruption will vary by commodity, trade lane, and mode of transport, and it will be steered by local differences in the crisis’s severity. The nuanced nature of the crisis yields opportunities for logistics and supply-chain companies: to enter new markets, innovate on new service offerings, and position themselves against competitors. A detailed understanding of the impact of the crisis is vital for companies as they shift from thinking about emergency resolve and resilience to planning for the return.
McKinsey’s report suggests that COVID-19 will have a significant and lasting impact on the economy, but trade volumes will recover.
The companies that will emerge with a competitive advantage in the next normal will be those that develop granular scenarios on how demand will evolve, appropriate playbooks to use in each case, and mechanisms that recognize—live—which scenario becomes reality.