The COVID-19 pandemic has been testing the resilience of logistics supply chains across the globe. But the crisis has also demonstrated the crucial role that transport plays, with interrupted transport and logistic routes across all modes hitting our value chains and economies.
Some have questioned the role of trade, calling for more sovereignty or near-shoring, but it is clear that having sources of supply outside one’s country is critical to reduce vulnerability. Europe’s recent experience has shown that international trade is a strength, not a weakness; the EU was blessed to be able to tap into the manufacturing capacity of the rest of the world to buy urgently needed medical goods from abroad during the pandemic.
We have also learned from the pandemic that the concepts of resilience and contingency planning should become enshrined in all future EU transport and logistics policies, with an eye toward avoiding any similar supply chain disruptions in the future.
In addition to its importance in increasing the resilience of individual countries, trade policy is equally important in addressing key global challenges such as climate change, sustainable development, or the transition to digital services. With this in mind, European forwarders look forward to the announced uptake of EU–US trade relations and welcome the announcement that the EU will soon seek to re-energize trans--Atlantic relations and reinforce political dialogue with the new US presidential administration, especially on fighting the COVID-19 pandemic and soothing trade tensions. It is also time to reverse the trend of weakening multilateral organizations, such as the World Trade Organization.
President-elect Biden’s promise to rejoin the Paris Climate agreement would likewise be meaningful. Europe is proposing to increase the 2030 target for greenhouse gas (GHG) emissions reduction from 40 percent to at least 55 percent. This will put the EU on track to reach climate neutrality by 2050 and to meet its Paris Agreement obligations. The Carbon Border Adjustment mechanism, which measures the carbon intensity of products imported into the EU, will help ensure that others follow Europe’s lead.
European forwarders are prepared to actively contribute to the substantial reduction of GHG emissions from transport and logistics operations through smart and innovative solutions. The new European policies should support the transition toward the carbon-neutral transport system in the EU by introducing specific instruments and incentives that reinforce sustainable logistics-focused strategies and initiatives undertaken by the industry. These measures must be designed in a smart and proportionate way, with the least possible impact on trade and the free movement of goods in the EU.
Ultimately, appropriate funding, both public and private, will be key to realizing the proposed measures and supporting investments in new technologies, most notably sustainable alternative fuels and the infrastructure to deliver them, without which the ambitions of the EU Green Deal will not be reached. The Green Deal and the EU’s economic recovery plan go hand and hand, and this is a sound approach that hopefully will be mirrored in other parts of the world such as the United States.
In times of global crisis, it is more important than ever to keep supply chains flowing and to allow maritime trade and cross-border transport to continue. It was for this reason that forwarders called on governments to keep the world’s ports open to ensure landlocked countries would continue to have access to food and medical supplies via neighboring countries’ seaports, especially during the first wave of the pandemic.
But for forwarders, keeping freight moving has proven difficult as reliability and predictability of service have eroded while prices increased, allowing carriers to make record profits at a time when much of European industry was in a serious crisis. The US Federal Maritime Commission (FMC) has been closely monitoring blank sailings, utilization of equipment, and “revenue trends” in the current volatile environment in the eastbound trans-Pacific and recently increased its reporting requirements for the carrier vessel-sharing alliances.
EU policy makers are calling for a similar initiative, as the speed of any rebound in world trade will rely heavily on the ability of freight forwarders of all sizes to keep global supply chains running smoothly, but also on the abilities of other parties such as carriers to build increased resilience, visibility, and sustainability into those supply chains.