COVID-19 will lead to a focus on resilience in the cargo sector
- Published: Thursday, 30 July 2020 07:36
The importance of the cargo sector has been highlighted during the COVID-19 pandemic with massive shocks to global supply routes, but the disruption has led to an increased focus on supply chain resilience and the opportunity for the rapid adoption of new technology within the industry. These findings emerged from an expert panel discussion of the subject of a Covid-19 technology recovery in the cargo sector hosted by Resilience First in partnership with Intel.
A McKinsey survey has revealed that a huge majority of supply chain leaders are planning to increase resilience in the light of the disruption wrought by COVID-19, and many are prepared to improve resilience at the expense of short-term efficiency. New technological solutions are already available in the sector and their acceptance and adoption is likely to be fast-tracked in the wake of the pandemic.
Jürgen Rachor, Senior Expert Operations, McKinsey & Company, said:
“The time to reimagine the supply chain for resilience was yesterday. Now we must consider how we can learn from this and set up to manage the next disruption. Recent history suggests that the severity and frequency of supply chain disruptions are increasing. We estimate that up to $2trn in goods trade flows will be rebalanced to improve resilience.”
“We need full visibility of our supply chain to assess our vulnerabilities and risk. 93 percent of supply chain leaders are planning to increase resilience. 44 percent would increase resiliency at the expense of short-term efficiency. Actions to build resilience include dual sourcing, more inventory of critical products, near shoring of supplier and production, higher safety stock and regionalization. But it is also time to not just re-balance the supply chain, but to re-imagine it incorporating newest developments.”
Syamak Nazary, Global Sales Director IoT Transportation, Intel, said:
“Covid-19 has had a big impact on the cargo industry but the pandemic will not by itself change the cargo industry it will only accelerate the change that was already coming.”
“Today you can see the importance of the ecosystem coming together. We need consultants to have an overview, we need technology partners to provide solutions and we have Intel as a technology enabler to complete the ecosystem.”
Andy McKeran, Commercial Director - Marine & Offshore, Lloyds Register, said:
“With 90 percent of goods moved by sea, shipping’s critical role in the global supply chain has been brought into focus by the pandemic. There will be a predicted 5.2 percent contraction in global GDP this year. Some 15 percent of the global fleet of bulk carriers and containerships has been removed from trading and 40 percent of the 1.5m global ship crew have been impacted directly by the crisis.”
“Many of the technologies used during the pandemic already existed but suffered from slow take up in shipping. COVID-19 has forced a global behaviour change and made us all more adaptable. The acceptance of new technology will move the shipping industry forward.”
“Technology is an enabler, but the value continues to be in the human expertise and experience. Technology needs to support and assist people.”