COVID-19 Recovery: “Volatility and Uncertainty as the New Normal”

Remaining competitive in the shipping industry can be incredibly difficult in times of COVID-19. As things change on a daily basis, everything is uncertain and we all have many unanswered questions. To move forward, 20+ shipping industry leaders will come together online on September 3 to define rebound strategies collectively and discuss business in personal meetings with other participants.

Since February, COVID-19 has been everywhere! It became incredibly difficult to follow recent developments with new updates, lockdowns, and protests every single day. There are 495 mentions of COVID in Lloyd's List and thousands of them on JOC.com, Freightwaves and every other logistics publication. It seems like COVID-19 is here to stay, even though scientists are working relentlessly on a vaccine. During the lockdown, we adapted to working from home, having the kids around all the time and reducing life to a minimum.

The shipping industry has not been spared either. Shipping lines responded to the shift in demand with blank sailings on almost every trade lane. Consequently, these blank sailings have made forecasting a lot more difficult for shippers. Most sit longer than expected on their export cargo and have to deal with increasing freight rates due to reduced capacity. Freight rates reach record highs through COVID-19. Due to capacity cuts, spot rates are up 25-40% in some of the trade lanes compared to 2019. As carriers expect a lukewarm recovery from demand-crushing effects, they have even been announcing additional blank sailings lately.

As a consequence, 11.6% of the container shipping fleet is now idle and had reached a record of 2.72 million TEU by the end of May according to Alphaliner. Amongst the carriers, HMM has the largest idle fleet at 32.9% of the carrier’s overall capacity. With container shipping demand hammered, stores closed and people having lost their jobs, it became incredibly difficult to sell their product through every part of the supply chain.

In short: There is a lot of confusion and uncertainty; nobody really knows what to do and how things will change over time. To get a glimpse of how the world would look in the near future, well-known and widely-respected shipping experts will come together at the Digital Container Summit on September 3 to discuss COVID-19 recovery strategies and collaborative solutions.

The list of experts and thought leaders include people like Thomas Bagge (CEO, DCSA), Dr. Ralf Belusa (CDO, Hapag Lloyd), Martin Dixon (Director of Research, Drewry), Ulrik Sanders (Global Leader Shipping Industry, BCG), Wolfgang Lehmacher (Ex-Director of Supply Chain & Transport, World Economic Forum), Eric Johnson (Senior Editor Technology, JOC.com) and Lars Jensen (CEO, SeaIntelligence Consulting). Each with their very own point-of-view on COVID-19, the shipping industry, and rebound strategies.

Leading shipping experts discuss COVID-19 rebound strategies

The Digital Container Summit will be a unique opportunity for everyone involved in shipping to have their questions answered by some of the brightest minds in our industry.

One of the shipping industry leaders is Lars Jensen, CEO at SeaIntelligence Consulting. Many know him for his sharp analysis and news posts on LinkedIn, most magazines feature his results and his opinion in their articles.

“COVID has not changed anything”, said Lars in a pre-interview with the organizers, “but accelerated digital progress”. As an example he mentioned the non-existing electronic bill of lading: At the beginning of the pandemic, Indian ports had to wait for weeks to get papers signed by their Chinese colleagues who were all in lockdown. Lars Jensen thinks that COVID-19 just accelerates a trend that was already there.

As more than 50% of the people in shipping lines work from home now, Lars Jensen predicts a loss of up to 40k jobs in the shipping industry. “COVID-19 has proven that our systems work, as we’re still able to move 85% of global value although 50% work from home”, he said. However, that's not good for employees.

“When you’re able to do most of the work from home we’re also able to automate jobs,” Lars Jensen added, “more than 40 000 jobs will disappear over the next 3-5 years because of that”.

Virus, volatility and uncertainty as the new normal

For Wolfgang Lehmacher, the former Head of Supply Chain and Transport Industries of the World Economic Forum, the new normal has three names: virus, volatility and uncertainty.

“We have to navigate this and we cannot do this blindly!” Lehmacher said. According to Lehmacher, “we need the information to support our decision-making processes and more cloud-based software to make working from home more efficient, such as software for remote inventory management”.

As most of us still have the major financial downturn of 2008/09 in the back of our minds, Eric Johnson, the senior editor technology at JOC.com, sees that carriers do cope well with the crisis now from a business perspective. Compared to 2008/09 when they suffered immediately and so badly that the following decade was an up and down, this year we only see a drop in volume. Why?

“Because,” as Eric Johnson asserts, “carriers have focussed on technology as a differentiator, not only on the size of ships!”.

To attend the keynote sessions, speak to the leading industry experts about recovery strategies, and schedule personal video meetings with other attendees from the shipping industry, Container xChange has opened its formerly client-only Digital Container Summit to the entire industry.