According to the United Nations Conference on Trade and Development (UNCTAD)’s newly released Review of Maritime Transport 2020, while COVID-19 has underscored the global interdependency of nations, it has raised existential questions about globalization and added weight to the pushback against outsourcing from distant locations.
“The pandemic brought into sharp focus the topic of supply chain shortening, including nearshoring and reshoring, with less dependence on just-in-time and lean inventory models,” the report states. COVID-19 has also brought to the fore the debate over diversifying production and manufacturing sites and suppliers.
The pandemic has also exposed how unprepared the world seemed to be in the face of such a crisis, the report observes, underscoring the urgent need to invest in risk management and emergency response preparedness in transport and logistics. It says future-proofing the maritime supply chain and managing risks requires greater visibility and agility of door-to-door transport operations.
The pandemic has also strengthened the case for digitalization and eliminating paperwork in the shipping industry, including in ports, the report observes, reinforcing the need for standards and interoperability in electronic documentation.
Many trade facilitation measures taken during the pandemic require further investments in digitalization and automation. Accepting digital copies instead of paper originals, pre-arrival processing, electronic payments and customs automation all help speed up international trade.
On the flip side, the pandemic has also highlighted that digitalization comes with increased cyber security risks with a potential to cripple supply chains and services in global maritime trade.
UNCTAD’s director of technology and logistics, Shamika N. Sirimanne, said the pandemic should not push to the backburner action to combat climate change in shipping. Therefore, post-COVID-19 recovery policies should support further progress towards green solutions and sustainability.
“The momentum of current efforts to address carbon emissions from shipping and the ongoing energy transition away from fossil fuels should be maintained,” she said.