Staying with long term partners even when the whole world is under severe travel and goods movement restriction is the hallmark of a resilient and effective organization. It takes exceptional far sight to nurture partnerships when the world was looking at transactional engagement. For Agility, this has borne fruit. Satish Lakkaraju, CCO of Agility in conversation with Dr. Rakesh Singh, Chairman ISCM.
How do you see COVID 19 will impact Logistics service providers as a whole?
We have already seen a severe impact on the global supply chain caused by COVID-19. All major airlines, shipping lines and LSPs are have seen a major hit in the demand for their services. Majority of airlines have stopped / curtailed passenger flights and are only running freighters or converting passenger aircrafts to meet the demand for cargo space. Shipping lines are cancelling services or running smaller vessels, as they have seen shortage of demand. In India, during the lockdown we are seeing difficulty in movement of cargo due to non-availability of vehicles. We are seeing already some of the Airlines are cutting jobs, salaries, and even one of the airlines has declared Bankruptcy. The shipping lines have already been suffering for quite some time with low freight rates and now are having to do blank sailings, as they cannot get the volumes to move.
Agility has responded quite well in this situation and we have not stopped operations after lockdown for our long standing customers with whom we have partnership
What are your views on COVID impact on global trade and how will global trade and the economy play up in immediate future?
Short term impact on the global economy will be severe. Global trade is surely going to change in the coming days, countries will prioritize the movement of essential items like foodstuff, medicines, medical equipment’s, etc. in the coming day while movement for non-essential commodities and luxury items will be given second priority. In the near term, IMF is predicting a global recession with only China and India expected to grow. The current trends clearly indicate that they will not be growth in some countries and they are looking at negative growth rates and in respect to India it will be difficult to do a forecast and it will depend on the support the government gives to the industry.
What has been the major concern regarding the interstate movement of goods in the country? What are the trends that are emerging?
There has been a drastic fall in the number of trucks on the roads. We have seen instances of drivers abandoning the trucks in the middle of the journey and disappearing.The situation has improved in the last few days; the state governments have started prioritizing, and allowing goods movement meant for critical shipments.
How has Agility responded to such challenges? What’s your near term and long term strategy?
Agility has responded quite well in this situation and we have not stopped operations after lockdown for our long standing customers with whom we have partnership and at this point of time it is difficult to give a long term strategy as things are changing constantly.
Distribution of risk among LSPs can help them take bolder new approaches which can help the customers and end users
What has been the impact of perishables and essential pharma? Do firms like Agility take into account urgent essential needs of the society and are prioritizing their strategy?
Agility has always worked with the motto of Patient safety is priority, long before the COVID-19 outbreak we have been working with customers in developing solutions which can ensure an unbroken cold chain for critical pharma shipments. During the current pandemic, we have been working with many of our existing and new customers to ensure that the critical shipments reach their destinations on priority. We have been ably supported by the airlines, airports, shipping lines, ports and our transport partners who have all upped their game to live up the challenge.
How has the government responded to many challenges on the regulatory front amidst the lockdown? What could the government do further to make the industry work better?
Initial response was a little slow; however, government has understood the criticality of the logistics sector in its response to the pandemic and has included logistics as part of the essential services. Consequently, movement of cargo has been much faster for us than what we were facing in the initial days.
Do you think better vertical and horizontal collaboration among LSP help in managing risk now and help frame a better resilience-based business strategy?
Any type of collaboration among LSPs either vertical or horizontal which can benefit the customer and end users, while reducing the risk component should be welcomed. Distribution of risk among LSPs can help them take bolder new approaches which can help the customers and end users.
What do you think will change post-COVID- 19? Will LSP have to move from deterministic planning to resilient planning in the future? How can technology help in these processes of evolution?
Planning by any LSP is dependent on the customer they are serving. If the customer has taken a bolder shipment planning approach with proper planning and schedule, the LSP can serve them with more option and better pricing opportunities. We have customers for whom we manage full supply chain, they have seen the benefits of our integrated supply chain solutions including cost benefits due to better planning and availability of cargo. Technology can enable better demand planning, smoother supply chain for the customers. ♦♦♦♦♦