Cci%20rennes%2004-montage-bd

News

Photo-1511578000813-99a40905e89f

COVID19 & Its impact on Maritime Trade in Brittany

May 20, 2020

Photo-1511578000813-99a40905e89f

Although the COVID-19 crisis has caused slowdowns in almost all sectors in Brittany (region located in Western France) for the months of March, April and May 2020, some key sectors (agribusiness, telecommunications, energy etc...) have been less impacted. The data today is not thorough enough to draw any conclusions on the impact of COVID-19 on global trade. It will most likely take a few more months for any data to tell us how this crisis will shape global trade. However, some trends do stand out. 

In international trade, when interviewing CEOs of transportation companies, directors of ports and airports or various influencers, key words and expressions such as “ecology”, “multimodal transportation methods” (illustrated by “short sea shipping” below) “interregional routes” or “sourcing diversification” stand out.

In maritime trade, the activity level remains strong in the agribusiness sector all over France. In other sectors however, due to the various social distancing rules, the pace has slowed down. This slowdown will likely have a negative impact in port communities all over France. The port of Le Havre (Normandy region) has already seen a 25% decrease in its port activities. The world’s biggest ship-owners have engaged survival strategies and will likely focus their activities in key ports in Germany, the Netherlands and Belgium, which are well connected to rest of Europe. French ports, already much smaller than those of its Northern neighbors, might be marginalized as bigger ship-owners will want to choose more profitable ports. 

Ports in Brittany, who, unlike other French ports, do have an industrial stronghold/hinterland, might come out stronger as new opportunities might arise in short sea shipping. The port of Saint-Malo (situated in the WTC Rennes Bretagne's vicinity) located on the English Channel and considered as the 3rd port of Brittany in terms of fret, mostly deals with products from the agribusiness and wood industry. Today, the coronavirus crisis forced Saint-Malo’s main transportation company, Brittany Ferries, to stop all its rotations (fret and passengers) with the United Kingdom. Saint-Malo kept one Ro-Ro fret rotation per week toward the UK and the English Channel Islands thanks to Condor Ferries (which normally only operates between Saint-Malo and the Channel Islands). Agri-bulk and Lo-Lo operations, much less impacted by social distancing rules, tend to go on and resist the crisis.

When the situation gets back to normal, international trade will have undoubtedly changed. This transitory period thus offers a unique opportunity to test out new multimodal transportation methods and accelerate the shift to sustainable and smart mobility as advised by the European Green deal. The port of Saint-Malo, for example, located in a strategic location in the Northern European routes, could become a key port for short sea shipping operations as an alternative to road transportation.

Movers and shakers in the business and supply chain sectors are also suggesting that his crisis seems to be pushing companies to look for solutions to diversify their sourcing and bring back industries to Europe, which might generate in the long term a rise in interregional traffic. To paraphrase Rodolphe SAADE, CEO of the world renowned group CMA CGM, “this crisis will change our consumption habits and the way we work. It will lead us to rethink supply chain models. […] Taking into account our dependency on globalization, supply chains will have to be remodeled in a more resilient fashion. They will need to adapt rapidly to brutal consumption changes.” 

Several changes will likely occur after this crisis. Whether this crisis will push companies to relocate part of their production to Europe or France, force them to diversify their sourcing or encourage them to use multimodal transportation methods all the while keeping the environmental impact of trade in mind, companies will have to find ways to adapt to these changes in smart and flexible ways.

As Benjamin Franklin supposedly said, “in adversity comes opportunity”. This crisis will push us to think outside the box and possibly inspire us to look for greener and more efficient alternatives in trading.