Transport & Logistics

What the crisis has changed

Economic crisis, cashflows under pressure, security requirements for logistics systems and goods, increasing environmental awareness, poor market visibility, changes in consumer buying habits, etc. Companies, whether in the transport or industrial sectors, are having to adapt themselves (fast!) to handle all these new factors.

How unlucky ! Just as the transport and logistics sector is having to cope with an unprecedented crisis, it also has to manage its own “green” revolution.

At the end of March, at the last European transport and logistics show(1), the general feeling was: the worst seems to be over, but the future is still very uncertain. The airlines would certainly agree with this! Two weeks later, the Icelandic volcano eruption brought European airline operations to a standstill for six days. According to IATA (the International Air Transport Association), the airlines lost 1.7 billion USD. Already severely hit by the economic crisis, the European airlines, the worst affected, really didn’t need this unfortunate twist of fate.

Rebuilding of stocks rather than recovery ?

In general terms, what is the situation today? Volumes transported remain low and, in any case, are far below their pre-crisis level. The only factor common to every company would seem to be the uncertainty of the orders situation, even for the major French luxury goods group Louis Vuitton (see the storie).
Philippe Van den Kerckhove, CEO of the Belgian commission agents Van Doosselaere & Achten in Antwerp, sums up the situation as follows: “We can’t see the light at the end of the tunnel!” and wonders: “Certain signs seem to indicate the beginnings of a recovery: traffic with Asia has started to recover since the beginning of the year, which is rather a good sign, but isn’t this mild recovery simply hiding a stock rebuilding phenomenon for the western industrial companies, rather than a real recovery of general activity?”

Managing the effects of the crisis and the new requirement for sustainable development.

In any case, everyone involved is preparing for this long-awaited recovery. The new reality of the moment: be faster, cleaner, and more competitive, and offer increasing numbers of services to the loaders, at the prices expected by the market. Transport and logistics professionals must adapt themselves to the changes induced by the crisis by proposing new organisations. However, at the same time they must also respond to the change in society expressed by an increasingly developing “green conscience”.

Of course, the postponement of the French carbon tax was welcomed by the transport federations (in particular, the road haulage companies, a record number of which are expected to declare themselves bankrupt in 2010) and by the French employers’ federations (Medef, Cgpme), but the underlying trend is there: sustainable development is now part of the requirement specification. Today, transport must be clean... or almost !

As Pierre Blayau, General Manager of Geodis SNCF quite rightly remarked, “The crisis coincides with society’s increasing environmental awareness. Even if the context is unfavourable, these two factors have to be combined”. All the major calls for tender now include an element of clean transport and sustainable development. It’s now up to the transport companies to submit multi-mode transport tenders combining, wherever possible, road, waterways and rail.

In this document, industrial companies (Louis Vuitton, Pepsico France, Rexel) and transport companies (the Le Havre and Antwerp docks) explain what the crisis has changed for them, and how they see the future. We have extracted 10 main points from their explanations (see the next few pages).

S.E.

(1) Almost 800 European transport companies met in Paris, in late March, at The International Transport and Logistics Week (SITL Europe).