How Forwarders See Impact of Covid-19 and Their Strategy for Business Continuity

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The coronavirus disease 2019 (COVID-19) is flowing through the global economy and supply chains.  The widening impact of COVID-19 has impacted on retail and manufacturing demand. Cargo owners are forced to delay receiving goods.

World Trade Organisation (WTO) forecasts that world’s goods trade is expected to fall by between 13% and 32% in 2020, further than global financial crisis of 2008‑09. Trade volume drop will automatically hit the logistics and transportation activities, including freight forwarders. After facing a 10% drop in first quarter (Q1) 2020, freight forwarders are expected to face a sharper drop in Q2, according to some analysts.

Some analysts said that freight forwarders may see volume declines of 20%-30% in air and sea freight in the second quarter of this year with the worth took place in April, ranging from 30 to 50%.

Indonesia freight forwarders are facing similar situation. Indonesia Logistics and Forwarders’ Association (ALFI/ILFA) noted that unless doing innovation, forwarders will suffer a drop until 70%.

Some Indonesia forwarding players affirmed it, but optimism and appropriate strategy will sustain the business. Yulia Ningrum, General Manager of LPI (Link Pasipik Indonusa) – Blue Sea, one of Indonesia’s leading forwarder in consolidation, affirmed it, but saying that each forwarding company will face different impact, depending on the strategies of each.

“It is true. We are facing some drop of demand in certain commodities. However, there are some commodities which are now growing up. To prevent from a further drop, it is important for a forwarder to take market from commodities which are growing up, in addition to improve service to customers, of course,” Yulia said in a discussion with Indonesia Shipping Gazette.

What commodities did face a sharper drop during this pandemic? What ones did face a steady and even growing? What are strategies the forwarding taken to make their business sustain? See detail of this story in the Indonesia Shipping Gazette Magazine cover story, May Issue.

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