Exclusive Interview with Sebastian Wulff, Head of Ocean Freight USA, DACHSER USA Air & Sea Logistics Inc
COVID-19 impact has spared none, irrespective of sector, size and age. One of the biggest sectors affected by the global pandemic is shipping and logistics, which is labour intensive and connects every corner of the globe.
As the COVID-19 crisis accelerates, shipping and logistics sector will need to show more resolve to withstand the scourge.
Sea News (SN) interviewed Sebastian Wulff (SW), Head of Ocean Freight USA, DACHSER USA Air & Sea Logistics Inc, on how the industry will need to act to withstand COVID-19’s impact.
(SN) Difficult times are these. COVID-19 has virtually stalled all operations across the globe. How do you think will it impact the global logistics market?
(SW) COVID-19 flipped the growth switch in every area of the economy and the global logistic market is no exception. Ocean carriers increased blank sailings–cancellations of services and delays. Airlines are forced to ground their fleets and turn into cargo planes.
This is something we have never experienced before, and it will impacting jobs, productivity and revenue.
Warehouse and distribution centres only have so much material, which can cause delays in the manufacturing and delivery of products. But there is no need to fear. The transportation world will find a way. There may just be some delays along the road.
(SN) Mobility has been reduced to near-zero, there is shortage of manpower at the ports and at other stations of the logistical chain. How is that impacting the industry? What could be the alternate, if any?
(SW) Yes, some areas are impacted more than others, which you can see by looking at specific U.S. states, such as New York or California, but we do not see any delays either on the port / terminal side nor on our own side. The operation function from DACHSER, the ocean carriers and the terminals / ports are under complete control and continues to run without problems.
(SN) In one of your recent interviews you talked about lack of talent pool in context of truck drivers, could you please throw some light of the issue? Is COVID-19 adding to this problem?
(SW) Before the COVID-19 issue, the US trucking market has been in desperate need of young and talented drivers. One reason is that younger people no longer seem to find this line of work interesting, for a variety of reasons including:
- Not perceived to have many growth opportunities.
- Long time and long distance away from family.
- Reputation of being a truck driver does not attract younger people.
- More and more people are pursuing higher education and seeking professional careers.
FTL (full truckloads) spot rates are up due to shortage of drivers but this will correct itself once all of the restrictions are loosened up. The current COVID-19 crisis has resulted in many drivers being forced to stay home due to children not being schools and other family matters. There is plenty of capacity on the drayage side, but this will tighten up when the economy re-opens and manufacturing fires back up.
LTL (less than truckloads) is very soft right now. Trucking companies have reduced their routes and staffing until this crisis is over. This too will correct itself as the restrictions ease. There are no nationwide restrictions for carriers or drivers, just the safety measures imposed by the individual carriers.
Once this crisis is over, there will be a large volume of driving jobs available.
(SN) How far do you think will the ripple effect impact be? Are we looking at joblessness as well? What else?
(SW) It’s hard to predict how far the effect of COVID-19 will impact the global logistics world. The current situation in Europe shows that we see some light at the end of the tunnel, and in Asia, the economy is recovering slowly, but surely.
Companies and businesses in the consumer industry are affected very heavily due to current “social distancing” situation, but the logistics world will recover and the demand for quality personnel will be high. Companies will re-produce above their capacity and business will become as normal as possible with some changes in the world.
Unemployment will continue to fall until the end of 2020, approximately 10 percent or more. In 2021 through most of 2023, the US economy will slowly recover from 2020.
(SN) DACHSER is known to have proved its mettle in tailor-made solutions. What probable solutions do you have for the upcoming “difficult days”?
(SW) DACHSER offers a variety of services along the supply chain, which one among these services would be the most impacted one? Why and how do you plan to fix it?
Our LCL product from Europe is a unique and reliable service that provides our clients, especially airfreight customers, a fast and reasonable solution due to the current travel ban from Europe.
(SN) What’s in here to lose for the customers, both in the long-run and in the short-run?
(SW) As mentioned earlier, it’s hard to predict the outcome of this crisis. In the short term, there will be less cargo. We need to look at how to fill up the holes that were caused by COVID-19.
In the long-term, we will be re-thinking clients’ shipping routes, looking at air Vs ocean and what works for different products, such as consumer vs. medical supplies. Also, we will be assessing manufacturing processes and locations.
The bottom line is that we will be communicating closely with all partners since we all are affected by the crisis.
Sea News Feature, April 17