In Italy, all nonessential factories were ordered to shut down in an attempt to halt the coronavirus outbreak. Moreover, many companies are struggling with a shortage of labour due to illness. The European logistics industry is still running, but will be affected in the long-term, is the expectation.
What is so typical about the current situation, is that it is defined by a drop in supply, before a drop in demand, notes the IEC analyst. “Usual economic recession refers to the decrease of credit financing volumes, the fall in stock markets and the decline of demand. This time, due to artificial suspension of production and border closures, a shock in supply is observed.”
Kozyreva adds that a drop in demand drop will certainly follow, but only later. The expectation is that of an economic crisis, something that will certainly impact the New Silk Road volumes in a negative way. Whether you opt for the optimistic or pessimist version, a slowdown in growth is inevitable in the long run.
Still good news
Yet, the revival of the Chinese economy is good news for the logistics industry worldwide.