In a way, we learned from the COVID-19 pandemic that both society and logistics operations could organize themselves in a completely different way. Meetings became virtual meetings, and in general, logistics processes continued.
It also became clear during the last two years that supply chains are rather vulnerable and not sufficiently resilient to cope with rapid swings in demand. EU production of personal protective equipment such as face masks, for example, proved insufficient.
The global air cargo supply chain was disrupted by the reduction of passenger flights, which significantly decreased available belly space for cargo, sending freight rates higher and making it difficult to secure capacity, especially for goods like medicine and pharmaceuticals.
In the maritime industry, the disruption was even more severe. COVID-19 directly affected the availability of seafarers and complicated crew exchanges. At the same time, blank sailings increased and global service reliability dropped around 30 percent. Spot rates for small and medium-sized enterprises (SMEs) reached levels ten times higher than before the crisis.
The crisis came at a time when the market was already in a difficult position, partly because of the specific rules on competition, such as the Block Exemption Regulation in Europe, that protect existing carriers and prevent the easy entry of new players.
In addition to the disturbance of maritime markets, shippers also face shortages of parts and components. This can be attributed partly to logistics issues, but also to geopolitical tensions — between the US and China, for instance — and commercial decisions made by manufacturers to prioritize production of semiconductors for computers rather than for the automotive industry.
For shippers in the EU, the top priorities for 2022 and beyond will be alleviation of the present supply chain challenges and the implementation of the European and global sustainability rules. Digitalization will be an important tool in achieving these goals.
E-commerce is already booming, but we haven’t seen anything yet, and it is important that governments adjust to accommodate the increased flow of e-commerce. As a consequence of new EU customs and value-added tax (VAT) rules, the number of declarations has exploded, and with it the administrative burden on shippers and customs agencies.
Further, it is important for the industry to rethink the system to make it more future-proof. This would mean a less cumbersome system and an up-to-standard system of private-public collaboration.
Environmental measures are making it clear for shippers that all environmental costs are internalized. Systems should be harmonized, preferably at a global stage. At the same time, the system should avoid double-counting — for instance, for an emissions trading system (ETS), energy taxation, and excise duties.