Opinions vary as to the length and depth of the current crisis, but the logistics sector will come out in good shape in any case, experts agreed at Real Asset Media’s European Logistics Investment Briefing this week, an online event attended by 300 participants from 27 different countries.
A few weeks ago there was a general belief in a short sharp downturn followed by a quick recovery, but as the crisis has progressed and its ramifications have become clear there is more concern over a more prolonged downturn.
‘Economic forecasts have been revised sharply downwards and a recession is looming in several countries,’ said Kevin Mofid, Director of Research, Savills.
The shift to online has accelerated during the crisis, but the question is how consumers will behave after. ‘Will the Amazonification of business continue in 18 months’ time? Has consumer spending fundamentally changed or will people revert back to previous habits? Either way, the logistics sector will benefit,’ he said.
Consumers are currently buying more online, supporting local businesses and becoming more socially and environmentally aware. If these trends continue, they will be prepared to pay for the higher costs of near-shoring.
Another consequence of the crisis has been the re-thinking of supply chains, which were ‘too tight, too efficient and not resilient enough,’ said Robert Dobrzycki, CEO, Panattoni Europe. ‘Production is moving closer to the end-user and that will be positive for European logistics’.
The crisis, and even the possible recession, can have a silver lining if they lead to a pause for thought, a pushing of the reset button and then a recovery based on stronger foundations.
‘We could be back at work in June and the recovery could come by the end of the year,’ said Marcus de Minckwitz, Director, Omnichannel Group, Savills. ‘The rebound could be quite quick , as China shows: our retail team there tells us that it’s back to 80% capacity in the places that have re-opened’.
Pent-up demand could lead to a surge, but we can also expect consumers to be careful with their cash. ‘Some people will put off discretionary spending until confidence returns,’ he said. ‘E-commerce will have a bigger slice of what will be a smaller cake’.