TF Spotlight: COVID-19 crisis to accelerate innovation and digital transformation
Asia Pacific is expected to have the largest Logistics market size as the region has taken stringent and quite early measures to contain the virus outspread. China has started to recover from the COVID-19 pandemic faster than any other country. What do you see as challenges to the Logistics industry in the region?
Asia Pacific region was the first to encounter Covid-19 and the first to witness some stabilisation and degree of control over the spread of the disease. Even in terms of cargo APAC has been least impacted in comparison with the rest of the world. The pandemic disrupted the Logistics industry globally and worldwide demand for air cargo declined by 19% in March 2020. Airlines have increased the number of services operated by dedicated freighter aircraft to partially compensate for the loss of belly-hold capacity resulting from the drastic cutbacks in passenger services.
With strict screening protocols, domestic and few international flights have resumed their services. China and South Korea after controlling the pandemic successfully at their end are now “doubling down” on international flight restrictions because they don’t want to risk importing a second outbreak. The macroeconomic outlook for the Asia-Pacific region is mixed. The utilisation of passenger aircraft, expanded use of charter flights, demands on flexibility in bi-lateral and multi-lateral regulations, new standards for operations, and protection of personnel are the new permanent procedures.
FIATA is mindful of the social, community and economic impact faced by the industry. These critical times are making us fully realise the urgency of implementing the World Trade Organization Agreement on Trade Facilitation. The priority, of governments globally, is to combat the health pandemic. FIATA understands that along with taking care of health there is a need to also focus on the business outcomes which drive our economies. Though the global supply chain is compromised today, it continues to be operational in a fractured state.
FIATA members are playing a crucial role in ensuring, the smooth supply of food and necessities for communities and their citizens affected by Covid-19. FIATA calls for a united community, that plays a pivotal role in the revival of the world economy and is an active participant in the implementation of Trade Facilitation reforms. It expects its National Association to meet the challenges to the best of Freight Forwarders’ collective capabilities and assist in being recognised as a “special industry category”. Presently, FIATA is encouraging the implementation of the Trade Facilitation Agreement, digitisation, and the position of freight forwarding as an essential service.
It will be too soon to determine the extent to which Covid-19 will hasten the industry to a future of digitalisation as Logistics has adapted to slower trade in these times. Digitisation of the physical part of the industry has been underway for several years and as such, the pandemic is not a game-changer but will serve to accelerate the development. A global survey conducted as part of the report found that 63.7% of respondents expect the COVID-19 crisis to accelerate innovation and digital transformation projects within their organisation, we are witnessing a rapid uptake in remote-controlled technology that enables the use of skilled people without a physical presence at a specific location.
Electronic documents like the e-AWB are a fine example of having turned out to be such a beneficial platform where paperless documents are exchanged among stakeholders electronically without any physical presence. Hence, acceleration in the use of fully autonomous equipment in settings, where this can be practically incorporated, is expected.
Covid-19 has globally impacted the Logistics industry. The sudden removal of belly capacity has disrupted air cargo flow. The sector is adjusting to the new processes and hopes for a return to the former levels with a growing demand for cargo deliveries. COVID-19 has seen ease in restrictions and liberalising of air traffic movements, a sign that there will be several changes in the way people work after this crisis, and that air cargo will be able to adapt to the new procedures as we witnessed the stakeholders adapting to the changes quickly. Providing and sharing feedback will be essential as we emerge from the crisis so that all businesses can adopt emergency procedures to suit their activities and better anticipate unprecedented situations, such as this.
This is a time when the industry which has always looked inward opened up to look outward in search of answers to business continuity, flexibility and efficiency. Learning how Banking, pharma, and IT industries are not only coping with the crisis but staying relevant through skill enhancement programs, working from home etc.