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COVID-19 and the logistics market COVID-19 and the logistics market

COVID-19 and the Belgian logistics market

Shane O'Neill • 4/16/2020
In this new article, we analyse the impacts of COVID-19 on the Belgian logistics market. How it will shape the sector for the rest of the year and beyond.
While logistics have been subject to more mainstream coverage in recent weeks, we check in with our Head of Industrial, Bart Vanderhoydonck.

the forecasts tell us
As per Oxford Economics, fundamentals with ramifications on the Belgian logistics market such as household spending (-1.3%) and exports (-1.7%) are forecasted to “nosedive” in 2020, particularly in H1 due to containment measures in place. Indeed, consumption is dropping, albeit is expected to rebound rapidly once said measures are lifted and household spending is projected to further rebound to the tune of 4.1% in 2021.


Supply Chain Supply Chain
The current direct impact on the supply chain
Hence the supply chain is disrupted as a result of decreased overall demand which is nevertheless offset by increased demand for certain types of goods. In Belgium, this has translated into an increase of demand for dry products (+40%) and e-commerce (+70%) over the first two weeks of March according to Comeos (Belgian commerce and services association) as well medical and pharmaceutical goods amongst others.

Naturally, as Belgium’s main international trade hubs, ports and airports have been playing a crucial role. Indeed, the Port of Antwerp reports no drop in the volume of shipping, with confirmed growth in demand for long-life foodstuffs, pharmaceuticals and e-commerce. Furthermore, the Port of Zeebrugge plays a crucial role in the supply chain of food, medicine and critical components, albeit while recording delays and abnormal operational results.

Meanwhile numerous pictures of airlines filling the seats of passenger plane with cargo to meet demand have been doing the rounds on the web. Likewise, certain 3PLs have reported jumps in orders resulting in increased truck departures and more loads per vehicle.

In Belgium, Liège Airport has been the subject of almost daily coverage and scrutiny in the media in relation to the delivery of food and medical supplies (including testing kits and 15 million masks – some of which have been donated by Alibaba founder, Jack Ma) from China for which it forms a crucial trade export hub into Europe.

 What’s next and opportunities to rethink the market

"As far as consequences on the Belgian logistics real estate market are concerned, there will certainly be a dichotomy. On the one hand, certain types of occupiers handling goods such as foodstuffs and medical supplies are faced with an immediate and urgent demand. There have in fact been reports of planned lettings been pushed to start earlier than set out in the original lease agreement in light of the current circumstances. On the other hand, there are occupiers that will be facing serious cashflow issues due to business being put on standstill for a critical amount of time." - Bart Vanderhoydonck, Head of Industrial Agency

The role of short-term lettings and flexible storage solutions, as well as the role of automation is as a result coming to the fore as the sanitary crisis provides an opportunity to rethink ways of alleviating pressure on all concerned occupiers and owners alike.

"The time is also ripe to contemplate city-level strategies around urban logistics and improved storage locations in closer proximity to the end-user. The benefits from easier deliveries carried out in cities due to reduced traffic over the past weeks should push this up the agendas of policy-makers agendas post-COVID-19." – Bart Vanderhoydonck

Opportunities also exist on the investment front, sale & leaseback operations can provide cash-strapped owner-occupiers with a sustainable alternative to maintain focus on their business.

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