The COVID-19 impact on supply chains has been total, as it ended up playing havoc on demand and supply equations, while also creating uncertainty in available capacity for hauling freight. But as more and more countries flatten the pandemic’s growth curve, demand is expected to increase in the coming months. And as Chinese industries get back on their feet, volumes will decidedly grow as well.
In that context, maritime freight movement has never been more critical to jumpstart paralyzed economies. Shipping ports and terminals have had their share of misery, as the pandemic left them with a multitude of challenges that they were not adequately prepared to handle.
FreightWaves spoke with Andy Barrons, the chief strategy officer at Navis, maritime technology provider, to discuss the impact of the pandemic on terminals and the recovery trajectory that can be expected in the industry over this year.
“Based on feedback from our customers, they are managing a range of issues created by COVID-19. Organizationally, to keep people safe, more teams are working remotely, managing the planning processes and IT systems with fewer resources,” said Barrons. “Remote working has brought the challenge of maintaining communication within planning teams and between planning and operations, to ensure all operations are running as smoothly as possible.”
Since the pandemic, Navis has observed an increased interest in its remote IT system monitoring and diagnostics, vessel and berth planning, operational dashboards and reporting, training, and team augmentation. The economic disruption caused by COVID-19 has meant unpredictable cargo flows, with re-directed freight, blank sailings, and vessel changes creating a greater need to re-plan operations more frequently.
However, there could be a silver lining to this chaos. Barrons explained that the disruption would likely accelerate some existing but slow-moving long-term trends in the industry – including remote planning practices, automation, electrification and the use of cloud technology.
Automation, in particular, makes a strong case in a post-pandemic future where social distancing might become the new normal. Barrons contended that while there may be fewer new greenfield automation terminal projects planned, most of them will be using automation to a greater extent.
“Growth will come from the stepwise introduction of automated equipment within existing “brownfield sites” through equipment retrofits and software enhancements, or capacity expansion projects within existing manual and automated terminals,” said Barrons. “Over the last couple of years, semi- and fully automated terminals have been continuously improving their productivity and finding more ways to use software to optimize and improve operational productivity and efficiency.”
Nonetheless, forecasts on the impact of COVID-19 on long-term global trade and demand remain hazy. Barrons pointed out that not all terminals across the world were hit equally. Some ports and regions have benefited from redirected volumes or seen relatively small declines, and other ports have seen a more significant impact.
“In the short-term, there is an expectation, now with China manufacturing up and running, that North America and Europe may see some higher volumes return later this quarter,” said Barrons.