FBJ 4 FREIGHT BUSINESS JOURNAL


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By Chris Lewis


Like, I suspect, most readers of FBJ, I’m all in favour of globalisation and using the manufacturing resources of the world in the most effective and efficient way possible. However, I was shocked to learn, during the covid-19 pandemic, just how fragile the UK and Europe’s manufacturing capability has become. Are there really no factories and plants close at hand capable of making simple things like masks and medical gowns? Does all this material really need to be imported from China with all the attendant costs and transport problems? I can’t have been the only person who was appalled at the feebleness of our response to the shortage of PPE for our struggling health services. Back in 1939, backstreet factories were repurposed from making things like bicycles or furniture to producing components for Hurricanes and Spitfires; indeed, historians say that one of the decisive factors in winning the war was this country’s ability to rapidly increase manufacturing capability, out- producing Germany and Italy in aircraft, tanks and other weapons of war. All that seems a very long way off now.


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When will we see an end to lockdown? That’s the question that everyone in this country will be asking as the severe restrictions on social intercourse enter their second month. I suggest that any decision taken will depend as much on economic and societal factors as medical and scientific advice. Will the desire to travel and move around eventually trump any fears over catching the virus? Is there any risk of rioting or looting breaking out as frustrations boil over? And just how long can people be expected to go without a visit to the pub? For the freight and international transport industry, I suspect that it may not be a clear-cut affair. While the ban on international air travel will no doubt be lifted at some point, we can perhaps expect temporary bans to be re-imposed as


GUEST OPINION


Global shipping is set for shake-up


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The post-COVID-19 supply chain could look very different from what went before, says Paul Cuatrecasas, chief executive of Aquaa Partners and author of Go Tech or Go Extinct.


The coronavirus pandemic has exposed the frailties of the global supply network and, in so doing, hastened the need for technology-enabled change. To bolster resilience to


future shocks, over the course of the next decade we will see a shift to shorter supply lines and greater regionalisation. As well as reducing risk of disruption, such a shift offers manufacturers cost savings, greater agility in output and closer proximity to centres of


demand. This redrawing of the global distribution network will rest upon technological innovation in key areas and be delivered through the acquisition of tech disruptors, in many cases by established industry players. Advancements in drone


technology are also helping to deliver this resilient, cost- effective and regionalised supply chain ecosystem. To take one example, ARK Investment Management


FBJ boasts the most informative and authoritative source of information with unrivalled in-depth knowledge of the rapidly changing freight business environment.


As the defi nitive publication within the sea, air, road and rail freight sectors, each issue includes regular news and analysis, in-depth coverage discovering the business decisions behind the news stories, shipper and exporter reports, opinion, geographical features, political and environmental issues.


If you have any stories or letters which should be of interest or any feedback on FBJ, please contact our editor Chris Lewis - +44 (0)208 6450666 chris.lewis@f j-online.com


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secondary outbreaks occur in different parts of the world. Global container shipping is also in a mess, with boxes piled up in the wrong places and factories in many parts of the world still shut down. It could be many months before any sort of normality returns. Road and rail transport, with their generally shorter routes and transit times, can be expected to bounce back relatively quickly – though here again, it depends on a resumption in demand for the products that they move.


estimates that parcel drones have


the capacity to deliver


packages profitably in under 30 minutes for as


little as


$0.25 compared to over $7 for traditional domestic shipping. The study also estimates that frictionless


and inexpensive


delivery will make consumers purchase significantly more goods online, growing ecommerce’s share of retail sales from 14 per cent in 2019 to an estimated 60 per cent in 2030 with drones delivering more than half of the ecommerce volumes. There is also significant


progress in the field of autonomous cargo drone technology ranging from established aerospace giants, such as Boeing to new entrants. California-based


Natilus, for


example, has recently secured approval to test a 30-foot prototype autonomous drone


aircraft with a 60-metre-long wingspan. They are currently deploying the aircraft on 30- hour test runs at 20,000 feet with 700lbs of cargo between Los Angeles and Hawaii. Natilus sees the prototype as a precursor to 60m-long drone with a 100- ton capacity. Cargo drones have the allure of operating at commercial rates well below those of traditional air freight. While cargo drone technology


poses more of an immediate threat to the traditional air freight industry, over time and with economies of scale we are likely to see continued cost savings, which, over time, is likely to see cargo drone technology competing with maritime freight.


Long-term trends


There can be little doubt COVID-19 represents the


greatest single disruption to the global economy since the Second World War. But perhaps its greatest role will be to amplify waves of change that were already begun. Logistics and shipping


giant, Maersk is a parable for the industry as a whole. Like the majority of publicly listed companies


its share price in


recent weeks has seen a rapid decline. But in Maersk’s case this decline is long-running and pre- dates the shock coronavirus has delivered to global markets. The company’s share price peaked five years ago and today it sits 67% lower. MSC and other rivals have seen a similar trend. Profound change is coming


to the maritime shipping sector. Coronovirus has merely accelerated that change. The key


challenge now falls on


incumbents to embrace that change and to adapt to it.


Issue 3 2020 - Freight Business Journal From the Editor


///NEWS


FBJ is the only UK and one of the few pan-European Multimodal newspapers. The comments we have received prove there is still room for a hard copy publication within the freighting industry. You don’t have to look at a screen all day!


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