Container port players must plan for multiple macroeconomic scenarios as the Pandemic continues to impact the industry
The COVID-19 crisis has sent US GDP into steep decline, and container volumes have plunged in turn amid a surge in retail purchase order cancellations and blank sailings. Prominent analysts have revised their 2020 GDP forecasts substantially downward to negative 5 to 6% annual GDP growth, with many economists predicting an even deeper decline. A recession is clearly under way, but there is considerable uncertainty about its depth and duration.
Facing what could be a deep and long-lasting downturn, it is imperative that terminal operators, drayage companies, intermodal players, and other components of the container-shipping ecosystem focus on protecting margin and cash flow. Companies can position themselves for short-term survival and long-term success by focusing their resources and management attention on core activities, effectively managing fixed costs, and taking other mitigating actions.
Our experts offer three pieces of advice to give industry players the greatest chance to weather the storm, create stability, and protect value for recovery.