Transportation & Logistics Analysis

The boomerang effect of the Chinese recovery must be anticipated now

March 23 2020

With the gradual normalization of the situation in Chinese ports, the logistics and port sector, while coping with the emergency, must prepare for recovery to avoid being wrong footed in Europe. This is particularly true for maritime transport.

The French Ministry of Transport, together with all the logistics, transport of goods and port communities' professions, reaffirmed on March 18th the urgent need to ensure the smooth transit of goods via the strategic hubs that are commercial ports. The strategic role of the sector, which applies in times of acute crisis, as we are experiencing at the moment, but also in anticipation of the recovery which is sure to happen, should be recognized.

Our Port Community Systems (Soget for Haropa and MGI for Marseille-Fos) have done everything to ensure the continuity of their services. The same is true for shipping agencies which can now handle 99% of the documentation digitally.

Managing the shortage of reefers

Priority must of course be given to food and pharmaceuticals, the most sensitive sectors in this period of tension in supply chains, without forgetting other strong economic sectors.

With regard to pharma, given the current shortage of reefer containers, it would be highly desirable for Europe to temporarily relax its 2013 regulations. This would be in order to ship products that do not necessarily require reefers, in conventional containers, as was the case previously. Spring navigation in the northern hemisphere allows for this, possibly by using insulation kits in some of the most delicate cases.

Increase the speed of ships

Joint action by States, supported by a very low oil price, should also encourage maritime operators to accelerate the commercial speeds of ships from time to time in order to reduce transit times, to reintegrate tonnage into rotations by carrying out emergency repatriation of empty Asian containers, with a special focus on reefers.

It is critical that Europe, while respecting health imperatives, continue to "step on the gas" so as not to find itself wrong footed, economically speaking, when trade picks up. That would be a double penalty with serious consequences for our markets.

The flip side of this scenario is that we will occasionally burn a little more fuel. This would be the price to pay, but it remains acceptable in the face of the challenges that we have to meet. This approach would save a year that has got off to a bad start by accelerating the return to normalization of East-West trade, which is the keystone of the current global economy.

Subscribe to the newsletter

Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).
See all its articles