One of the biggest things about COVID-19 is the fact that it affects nearly every aspect of our society. Personal lifestyles and habits are changed drastically due to social distancing, personal protection practices, and even lockdown (in some regions). However, international trade and logistics are suffering, as well. Now, while it may be somewhat difficult for people to worry about overseas shipping practices while experiencing lifestyle changes of their own, the matter is quite serious. Here are several ways in which COVID-19 has a huge impact on trade and logistics, as well as some projections on how this might affect the global economy as a whole.
1.Global trade suffered a significant loss.
One of the most important statistics to bear in mind is that, in May 2020 alone, global trade fell to -17%. This is a significant problem that had affected many different industries. Needless to say, it has a huge impact on trade and logistics. In the hyper-connected world of 2020, a reduction in cross-border circulation affects the global economic structure. Moreover, since the beginning of the pandemic, there are talks of recession. This means that even those who didn’t lose their jobs took a more careful approach when it comes to the way in which they spend their money.
2.Some regions were hit harder than others.
Like always, not every region was hit as hard. When it comes to the change in the value of goods exported from January to May 2020, compared to April and May 2020, we start seeing some clear patterns. First of all, there’s a massive nosedive when it comes to the new world. Latin America and the Caribbean region suffered a -23.9%, while the US suffered from -22%. The problem in the Caribbean is the fact that the region relied heavily on tourism, which took an even greater hit.
3.Import suffered a universal hit.
Another thing worth mentioning is the fact that the import suffered a universal hit. This is due to the fact that the majority of countries closed their borders in order to stop the pandemic from spreading further. Moreover, the majority of countries suffered from the problem of stocking their stores with some basic supplies, which made them prioritize a bit differently than they would under normal circumstances. The chances are that it will take a while for the world to recover from this, even after the dust has settled.
4.Maritime container trade has fallen.
One of the biggest factors regarding trade and logistics is the fact that the maritime container trade has fallen substantially. In order to cover their losses, the majority of companies actually raised their prices. Fortunately, Australia and the surrounding region were not hit as bad. This makes the state of freight companies in Australia quite admirable compared to the rest of the region. Coincidentally, this also makes Australia into one of the most promising regions when it comes to placing delivery orders and expecting them to be there on time.
5.The activity in most ports has dropped.
The side-effects of reduced maritime trade are the fact that the activity in the majority of ports has dropped. For individual exporters/importers, this is not necessarily a bad thing, seeing as how they have a smoother freighting process. Still, the closure of productive activities and even health controls have slowed down land transport by so much that it still might be worth one’s while to go for an overseas transportation method. Unfortunately, the majority of experts agree that the projections for the rest of 2020, don’t look that optimistic.
6.It’s not the same with agricultural and livestock products.
In the moment of crisis, the focus has quickly shifted from commodity goods to the export of agricultural and livestock products. As a result, the numbers of these products have even grown (albeit by 0.9%). Sure, this growth may sound quite minuscule, but the truth is that the fact that it managed to remain in the positive sounds more than impressive. Moreover, it might have set the trend for the world to follow, seeing as how a lot of experts still can’t agree on how long this situation may last.
7.The prices have gone down, as well.
One more thing worth mentioning here is the fact that the prices have gone down substantially, as well. The most severe drop can be seen in the field of oil and oil products. Why is this the case? Well, in the majority of countries, cross-country traveling was nearly impossible, and even cross-state traveling was reduced to a minimum. Not to mention the insane quantities of fuel used for global trade. Due to decreased travel volume, the demand for oil products has dropped significantly, which reflected the price, as well. One side-effect of this is the improvement of the environmental situation that everyone is talking about.
8.What is there to be done?
When talking about what is there to be done, it’s more than clear that some improvements should be made. First of all, industrial policies need to be introduced, which would facilitate the logistics in these trying times without compromising safety or causing a state-wide panic. Then, there’s the question of efficient, smooth, and secure logistics, which was a challenge for some, even without the pandemic. Lastly, there needs to be a higher emphasis on regional integration in order to ensure that similar problems don’t occur in the future.
At the end of the day, it’s more than clear that we’re expecting to encounter a rough patch. Also, it’s not quite clear when this problem may be resolved. The key thing is that you need to take into consideration is the fact that some adjustments will have to be made in order to avert a huge huge impact on trade and logistics. Still, if there’s one quality of the humankind that comes to prominence in moments like this, it’s resilience. No matter how big of a problem, we always find a way to adjust and overcome. In other words, while things are bad, it’s not the end of the world.