In last year’s Annual Review and Outlook, The Journal of Commerce opened by writing that “times were turbulent in the global logistics arena.”
Few, if anyone, probably realized how true this would be for 2008, and the extent of the turbulence that was still ahead at that time because of the global crisis.
Until 2007, there were many investments and partnerships by carriers, terminals and ports at various levels to tackle the problems that would result from the forecast growth in container volumes. Carriers ordered new ships and increased their size, leading to unprecedented additional capacity entering the market in the next few years.
The financial industry also was convinced about our industry’s growth and potential and took ownership in various terminals. This interest of the financial industry also seemed to present new opportunities for investment in capital-intensive infrastructure projects through public-private partnerships.
In Europe, where congestion was an increasing problem, Amsterdam and neighboring ports formed local and regional partnerships in infrastructure investment and integrating information systems. Those and numerous other initiatives were possible in times of growth because they would tackle capacity problems and the environmental impact of ever-growing container volumes.
So will that change for 2009 (and beyond) now that the volumes are temporarily down?
One of the biggest challenges in Europe will be to remain focused on long-term goals that solve capacity constraints at terminals, ports and on the roads. New partnerships in Europe that try to increase intermodal may come under pressure if short-term forecasts are not met, but we cannot let that deter us from moving forward. It will eventually be the preferred way for northwestern Europe to handle cargo.
That’s especially true now that the financial crisis has tightened available credit. As the financial institutions that are left realize that return on investment in this industry should be seen over a longer term, we run the risk that investment in long-overdue infrastructure projects will end up on the back-burner until better economic times. We cannot afford to let that happen. The economy will rebound, and we need to be ready to accommodate an accompanying increase in trade. There might not be a better time to work on that than now.