Page 12 - a.hartrodt Business Report 2020 EN

Global markets
World markets
A world shaped by the coronavirus crisis
A virus throws the world out of kilter and puts large parts of the economy into crisis mode. Supply chains come under pressure, shortages of raw materials and supplier products arise and the concept of the global distribution of labour shows cracks. On the heels of the slow cooling phase of a boom decade, which had already started in 2019, the coronavirus pandemic crippled many areas of industry. Politicians in Germany describe mana­ ging the crisis and its consequences as the greatest challenge of the post­war era.
But the crisis is not affecting all sectors of industry equally. Quite the contrary: online trade is flourishing. The food sector is also reporting record demand. Logistics can benefit from rising quantities in many areas that are proving to be systemically important.
However, figures prove how hard it has hit the global economy: growth of 1.5 per cent was still achieved during 2019; in 2020
Market development
A race to catch up follows the slump
The coronavirus hit logistics hard in the first half of 2020. Demand for transport services slumped around the world. In global sea and air freight transport, not only the number of orders but also volumes fell rapidly. As a consequence, shipping companies cancelled departures and airlines grounded planes. In Germany alone, the air freight business plummeted by 17 per cent.
But in the second half of the year, the situation reversed. The economy recovered again. This led to a significant increase
in shipping volumes, which met with lack of capacity. In air freight, the airlines had largely transported freight in the holds of passenger aircraft. The absence of tourist travel meant
the sudden disappearance of an enormous amount of freight capacity in the market. This led to a massive rise in air freight rates.
global trade collapsed by 3.5 per cent, and in Europe growth even fell by 6.1 per cent (2019: +1.5 per cent).
In addition, trade conflicts between the US and China continue to smoulder and there is an escalating battle for technological leadership. These influences are expected to permanently shift global trade flows. The increasing regionalisation of production and logistics but also the growing safety stock in warehouses are becoming the new reality of a supply chain focused on resilience.
Many important industrial countries have fundamentally changed their investment policy or are going to do so in the future. China is no longer the first choice as a production location. Vietnam, the Philippines, Indonesia and other countries are moving more into the foreground, and regional locations are also included in strategy considerations. This also influences the logistical flows in overseas transport.
A comparable situation was also seen in maritime transport. As early as April and May, sea freight rates multiplied on almost all global trade routes, reaching new record highs. Carriers stated that the rise in rates was due to the pandemic. The reasons are, however, in large part of their own making. For example, the sea freight market has been in a difficult phase since the restructuring of shipping alliances. The impact can be seen in many areas: wrong equipment in the wrong place, lack of discharge capacity, poor utilisation of shipping space – many factors mean customers are today in the situation of having to pay for scarce transport capacity with high rates.
However, a useful alternative to the sea route between China and Europe has developed. With the advancing expansion of the Trans­Siberian railway, also known as the new Silk Road, a new connection has been created that is very reliable and significantly faster than the sea route.
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