Saying that we are living in strange and surreal times could very well win the award for “most obvious phrase of the year,” to be sure. But it really is true. How could it not be, right?
While we have all run the gamut of the impact of the ongoing COVID-19 pandemic from just about every perspective, including emotional, personal, financial, family, and, of course, on a professional and business level, it goes without saying that the impact of COVID-19 has been significant and severe.
Compounding that is the civil unrest and societal issues, in the United States, on display throughout the country, in the form of both peaceful protests and misguided looting in reaction to the tragic death of George Floyd at the hands of the Minneapolis Police.
These things are not “new” news by any stretch, but, at the same time, it is what is happening and, chances are, they are top of mind for all of us.
But when viewed together through a logistics and, by extension, an economic lens, both COVID-19 and the civil unrest situations have heavy impacts, respectively. That is not up for debate, as far as I can tell.
In the pages of LM and on this website, we have endeavored to provide news, updates, and analysis on how COVID-19 has negatively impacted the economy in myriad ways. These include: diminished demand; a supply and demand imbalance, as it relates to over-the-road capacity; blanked sailings; and an overburdening of our parcel and mail networks, due to people ordering more goods online (than ever?) for this time of year, which has strained delivery networks, among others.
And even though things have remained largely bleak economically, there were, at the very least, some cautious signs of optimism afloat, with some states starting to re-open their economies, coupled with what could be viewed as somewhat “less very bad” job losses in recent weeks, although they still remain down at record levels, for the most part.
That optimism was on display, to a degree, in freight markets, too, with indications capacity may be tightening up ever so slowly and spot rates also seeing gains, too, in response to slowly improving economic momentum. There was some sentiment building up, too, with hopes that perhaps the second half of the year would end up being better than initially expected, when compared to what expectations were at the onset of the COVID-19 pandemic in the U.S.
But now, things remain muddled again, in the aftermath of the tragic death of George Floyd, which this week led to looting, crime, and confrontation in many large metropolitan areas of the U.S., with myriad household name retailers and small businesses alike seeing their establishments destroyed and their goods pilfered by people ostensibly taking advantage of the situation.
Make no mistake, it is a terrible situation all around. But the economic fallout from the looters on these places of business has very negative economic trickle-down effect.
That was made clear in a recent interview I had with Tony Nieves, chair of the Institute for Supply Management’s Non-Manufacturing Business Survey Committee.
Nieves explained that things were bottoming out in April but were showing signs of being on the road to recovery in May.
“The indications were that the latter part of 2020 would be positive, with stay-at-home restrictions being lifted and businesses starting to re-open, albeit at less capacity,” he said. “These recent events are more than an impediment; they are catastrophic, when you look at what is going on with this civil unrest. It has derailed everything at this point. These businesses that were re-opening are now shutting their doors and mostly impacting metropolitan areas like New York, Los Angeles and others. The challenge is those areas are where a good percentage of the economy is driven from and has really put a damper on things.”
Not one to mince words, Nieves’ assessment really is spot on. That leads to the question of: where do we go from here? And the answer is….well, there is no obvious one, it seems.
Any way you look at it, these are extraordinary times, for better or worse. We have emerged from the abyss, in the past, but things felt different, in the sense that perhaps there was more of a tangible or definitive endgame or objective that would bring some type of closure to these issues. But, unfortunately, as things relate to COVID-19 and the ongoing civil unrest, things remain far more loosely defined, or simply undefined or uncertain.
Logistics, freight transportation, and the supply chain are obviously intertwined in all of this, and will have many eyes on it, in terms of emerging from these ashes, so to speak, with the hope that things get better all around. It can, and will, happen eventually, one day at a time.