COVID Present And Post-COVID Future On The Waterways
As the restrictions related to COVID-19 enter their eighth month with no clear end in sight, many have speculated on how our society and the economy will change during and after the pandemic.
On the first full day of the Inland Marine Expo, several expert panelists offered a detailed look at this question from the point of view of the barge industry and its customers. The IMX itself has been affected, as this year it took place virtually September 29-October 1.
Ken Eriksen, vice president at IHS Markit, sees a future in which supply chains are shortened and automation is accelerated, with robotics increasingly replacing labor. Strong and well-capitalized companies could get stronger, and innovators could capitalize on new opportunities, while those less able to adapt might be absorbed in mergers or weeded out.
Unlike some industries, the inland marine industry is already about as lean as it could be in terms of overall headcount. (Offshore vessel headcount has plummeted due to the oil downturn.) That doesn’t mean individual companies aren’t feeling pressure. Coronavirus precautions are increasing expenses related to crew safety, some of which could remain in place. Some companies will be able to find opportunity in adversity. More shore employees working from home may well realize cost savings and productivity gains and could reduce fixed expenses.
The cement industry, a sensitive barometer of business conditions, was setting records until the virus hit in March. Now activity is down: in home construction, oil fields, business construction and road maintenance, all key cement markets. Very low mortgage rates have managed to stabilize housing starts but have not been able to spark any growth in the face of the virus. State revenues are down, and states won’t be able to resume normal levels of road building and maintenance without federal help. Even after a vaccine, it could take a while for these sectors to crank up again.
Just as the coronavirus’ impacts have been uneven, panelists saw the recovery—whenever it happens—as equally uneven. Whether that recovery is “V-shaped,” “U-shaped” or “W-shaped,” they agreed, the two unknowns are the timing, availability and effectiveness of a vaccine and the extent of further government help and its effect on consumer sentiment.
