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What will the new normal look like in European logistics?

What will the new normal look like in European logistics?

Blog: Corona impact on European logistics, update July 14, 2020

As summer holiday has started in many parts of Europe, highways and airports are slowly seeing more crowds of Europeans that are headed for some time off. Vastly different from 4 months ago, when nearly all passenger flights were grounded and highways almost exclusively facilitated trucks carrying crucial goods that struggled to cross the heavily checked internal borders. It is a sign of relaxed measures across the EU, where most member states allow non-essential travel between them and a growing group of non-EU countries that have a comparable or lower COVID risk profile (up-to-date EU travel info can be found here).

This is the twelfth Corona update of HIDC on the continuity of European logistics (previous eleven updates can be found here) and it wraps up 4 challenging months of supply chain dynamics in Europe and beyond. We will also look ahead towards the rest of 2020 as everyone in manufacturing, trade, supply chain and logistics is trying to achieve something that feels close to “business as usual” in an unprecedented situation.

Logistics backbone of the Netherlands held strong
In March, Europe was hit hard by the novel coronavirus and most countries went into lockdown. Keeping supply chains functioning was top priority for policy makers and businesses alike. The Dutch logistics backbone, consisting of ports, airports, customs, inland terminals and European distribution centers, were able to continue operations without interruptions. But the sudden drop in air cargo capacity caused rates to spike and shippers were forced to find alternative modalities and re-think their supply chains to deal with future interruptions, as discussed in our last update.

The new normal? Not with the closing act of Brexit
Although product kept moving and supermarkets, hospitals and online shops haven’t faced significant delivery issues, we do expect a challenging period for logistics in Europe going forward, mainly due to contracting economies and dropping consumer demand. And there is of course Brexit. Negotiations are not bringing any significant progress and WTO rule trade between the two blocs seems the most likely scenario in 5 months. The UK has announced a 470 million GBP program this week, to build 10-12 inland border inspection points and recruit 500 border control officers, a massive project to complete in such a short period. We have seen significant growth in new Brexit-related projects, of UK (but also US, Canadian and Asian) companies that are looking to set-up an EU warehouse rather than wait and see what Brexit brings.

Other themes of the second half of 2020: selling online and virtual networking
In the first months of the pandemic, European consumers were forced to stay in place and make their home a pleasant place to work and live, driving e-commerce sales. In our pipeline of new potential logistics projects for the Netherlands, we see a significant uptick in e-commerce driven queries. 1 on 3 new projects now have a direct to consumer delivery component. In our council, we have approximately 70 logistics companies specialized in pan-European e-fulfilment and they have also experienced a rise in interest from brands and manufacturers that see opportunity in selling directly to European consumers. European e-commerce fulfilment is the main 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 show in Amsterdam. Unfortunately, it is too soon to host it physically so the event goes virtual, with the speaker line-up remaining very strong. There will also be novel ways to network virtually, so definitely worthwhile to register (it’s free!). More information can be found on their website.

Another major event HIDC attends every year, normally with a group of its members, 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, normally hosted in a different US city each, is going virtual as well from 20-23 September. A great opportunity to enjoy the deep content that EDGE offers from the comfort of your home office. HIDC will have a virtual booth in the ‘exhibition hall’ so be sure to drop by. We will be sharing more info in our newsletters (subscribe on our global site for English or our Dutch site for the Dutch version).

Stay tuned for more webinars or receive assistance ‘on-demand’
We have made a successful transition from physical to online events and will continue to do in the second half of 2020. You can re-watch our past webinars and keep on eye on our calender for future events and tune in for a live event online.

For any assistance on setting up your B2B or B2C supply chain in Europe, you can of course also request our assistance ‘on-demand’. Our supply chain solutions managers will help you decide what steps to take, in setting up your own distribution center or in selecting third party logistics service providers. We offer our services free of charge and without any obligations. We also have a great line-up of consultants, VAT and legal specialist and other professional services. For a comprehensive overview of what we can do for you we created this ‘menu’. We hope to serve you soon!

July 14th 2020

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Stan de Caluwe

Senior Manager Supply Chain Solutions

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