COVID-19 resurgences in some of Asia’s major ports, the hoarding of shipping capacity by China, and supply chain bottlenecks have significantly driven up the price of goods and even caused shortages. Many companies have had to reorganise their production to maintain their sales volume.
The pandemic continues to hamper the operations of many businesses, especially outside Asia. Shortages of essential raw materials such as copper, plastic, and semiconductors are affecting both the construction sector and key industries like the chemical sector, among others. Furthermore, shortages in some sectors affect others; for example, the slowdown in the automotive industry due to semiconductor shortages indirectly impacts the chemical industry, since part of the paint manufactured in our country is used to paint vehicles produced both here and abroad.
With COVID-19, many customer habits have changed: consuming more from and at home, using digital e-commerce platforms more frequently for everyday purchases, and relying on countless apps to perform common tasks. That is why customers not only need companies to be available at any time, but also anywhere. This requires constant inventory, something that is currently quite challenging in certain sectors, especially those that rely on imports to manufacture their products.
At ERA Group, we propose transforming freight transport, just as is happening in many other sectors and will become the norm in the coming years, toward a more environmentally friendly sector that will also help reduce these occasional supply shortages in the future:
Points to consider:
- Consumers increasingly expect solutions that are more environmentally sustainable and cost-efficient. As a result, mobility is evolving into a service rather than an asset, so paying for shipping is increasingly viewed favorably, as customers see it as something a business offers—just as it charges for the services or products it sells, and freight transport is increasingly viewed in the same light, rather than as an intrinsic obligation of the store with every sale. Additionally, options like buying online and picking up the order at a physical store make shipping a more “premium” service.
- As for the supply side, there are already several alternatives to fossil fuels; for light vehicles, there is electrification; for heavy vehicles, hydrogen is being developed as a substitute; and the current challenge lies in maritime and air transport. In these cases, the most immediate solution is to make more local and nearby purchases, so as not to rely so heavily on these modes of transport.
"The pandemic has changed many aspects of life, and these will continue to evolve after it due to all the issues it has brought to light regarding preparedness for another event of this nature," warned Fernando Vazquez, "Businesses will have to constantly evolve, and one such evolution will take place in the transportation and logistics sector, moving toward a more sustainable, accessible, and active model." [Fernando Vazquez, Consulting Partner and Co-Area Developer at ERA Group]
Actions:
Companies will have to review several policies related to transportation: Travel policy: companies must work to include new mobility, shipping, and delivery options.
- Fleet policy: segmenting the different groups within the organisation and their needs, defining and assigning the most appropriate means of transport for each category, and planning, if necessary, the creation of proprietary supply infrastructure, i.e., charging points for this new fleet of vehicles that will require charging stations, as the national infrastructure may not be expanding at the same pace as companies require.
- Car Policy: segmenting user profiles and specifically defining the vehicles to be used and the appropriate leasing arrangements.
- Legislative Monitoring: European legislation on sustainable transport must be complied with, and, obviously, the subsidies provided by the European Union in this area must be invested wisely - as has been done in other sectors - so that no country is left behind in this transformation.
