Impact of the Corona pandemic on gateway the Netherlands

Although July and August are traditionally slower in Europe as many Europeans celebrate summer holidays, we have only seen a modest summer dip at HIDC. Supply chains remain dynamic and we and our members are seeing a lot of new business leads in the market. Some of these opportunities are postponed projects from the first half of the year, others have to do with companies getting ready for Brexit and grasping the opportunities of the e-commerce boom. So it is safe to say the logistics industry is doing better than we feared in the early days of the pandemic. This update will talk about how the crisis could have a further impact on gateway the Netherlands.

Last month, the Smart Port consortium (www.smartport.nl) released a quick scan concerning the consequences of the pandemic for the Port of Rotterdam and the related logistics and industrial cluster (full report in Dutch here). It covers the developments in last 6 months and aims to give a long term view on the position of the port.

It concludes that the corona crisis has accelerated megatrends that were already in motion, such as growth in e-commerce, shortening and re-shoring of supply chains and mitigating disruption risk:

Brands and manufacturers scrambling to support online boom
Consumer goods are increasingly finding their way direct to the consumer instead of through brick and mortar stores. Brands and manufacturers have to adjust their logistics model (if they haven’t done so already) to be able to serve European customers in one or two days with a friendly returns policy. We have seen this trend at HIDC projects for many years but brand taking control of their own European omnichannel distribution has definitely accelerated in 2020.

This is also the theme of the Home Delivery World Europe show, taking place September 22 and 23. As the Netherlands is Europe’s main e-fulfilment hot spot, HIDC and its Invest in Holland partners have teamed up with the organizers to make it a successful online show. HIDC chair Paul de Krom will open the event on September 22 and we are organizing a session about ‘Optimizing your cross-border e-commerce in Europe’. The full program can be found on their website.

Supply chain redesign top of the agenda, but long term implementation
The shortening and re-shoring of supply chains is a longer term trend that doesn’t take shape overnight. Multinational companies have now experienced the risk of long supply chains and single source models and are expected to redesign more quickly and / or build strategic stock, especially in high tech supply chains that are harder to re-shore. The mobile phone production clusters in China are hard to replicate; fashion and apparel is easier to move since the production network of suppliers is less intricate.

A push for warehousing and logistics through the Corona pandemic
The report argues that a re-shoring trend may decrease deep sea container volumes but increase intra-Europe flows thus boosting short sea, inland shipping and rail traffic. Additionally, the growth in e-commerce and an increase in strategic and operational stock also has a positive effect on the demand for warehousing and logistics. These trends bring significant opportunities for the Netherlands as the European logistics hub, even though an economic downturn can negatively impact overall  goods flows through the Netherlands, simply because there will be less demand.

Vaccine distribution the next challenge?
HIDC and NFIA hosted a logistics press roundtable early September with 6 journalists from U.S., Canada and UK featuring top management from Air France – KLM and Jan de Rijk Logistics. We discussed how the Netherlands has managed to keep supply chains operational in the early days of the pandemic and how we are practically and creatively tackling challenges the corona crisis is throwing at us. One challenge (hopefully sooner rather than later) might be the distribution of vaccines that we feel the Dutch logistics sector is well-equipped for. The cold chain infrastructure quality is second to none, as well as the capacity. The effectiveness and reliability of the logistics system will be tested again, especially when a second wave takes place. With the experiences from earlier this year, when supply chains kept functioning without interruptions, both speakers expressed confidence it will pass the test once again.

Latest of supply chain best practices and CSCMP EDGE
A great opportunity to learn more about risk management and other supply chain topics is CSCMP EDGE. The annual conference of the Council of Supply Chain Management Professionals, drawing approximately 3000 supply chain managers from North America and around the globe is taking place virtually from 20-23 September. A great opportunity to enjoy the deep content that EDGE offers from the comfort of your home office. HIDC is event partner and we a virtual booth in the ‘exhibition hall’ so be sure to drop by.

This is the thirteenth Corona update of HIDC on the continuity of European logistics (previous twelve updates can be found here)