Letter from the editor

EDITOR’S LETTER

It is traditional at this time of year to reflect on the year about to end and consider what might come in the next. That was something I did in the December 2019 issue, running through the growing environmental pressures and increasing calls for greater sustainability in industrial activity.

I finished that piece by saying: “One thing is clear: ‘business as usual’ is over and the future will be very different – although in what way is impossible to tell.”

I certainly did not expect a global pandemic to take over the world, upturning expectations and plans, although the signs were there for those who had cared to look. The novel coronavirus had already been identified in China – that’s why it’s Covid-19, not Covid-20 – and even before then there had been those warning of an imminent outbreak of a novel infectious disease.

In business terms, the airline industry, cruise operators and the hospitality sector in general have suffered severely during the course of 2020. Demand for new cars and houses has slumped as individuals have revised their priorities and concentrated on conserving cash and spending only on essentials. Businesses themselves have taken a similar approach, delaying investment plans and concentrating on the short term. Refinancing has been popular, particularly as interest rates have sunk to lows not seen for decades.

We now appear to be in the midst of the anticipated ‘second spike’ in infections, with further lockdowns and restrictions imposed – largely in order to keep the demand on medical facilities at a manageable level. Some have posited a ‘third spike’ yet to come, although it is hoped that research into a vaccine will help head that off. But it is clear that the economic impact of all this mayhem will be massive.

So, as we look towards an eventual re-emergence into a re-normalised world some time in 2021, we all have to look at how we will manage in a much more straitened economic environment. Many of the logistics sectors covered by HCB have fared fairly well thus far, though they have had to cope with major changes in product flows – but then that is what logistics companies are trained to do. There are some companies that have suffered, mostly those exposed to the weakness in the upstream oil and gas sectors, where the slump in demand for transport fuels caused prices to crash earlier in 2020 and where activity is only now beginning to pick up.

Further, when we do eventually get back to ‘normal’ – whatever that will look like – there will still be the underlying environmental factors to deal with. While the rest of us have spent 2020 focused very much on staying alive and keeping the effects of the pandemic at bay, the regulators and supra-national authorities have been busy beefing up their expectations of action on climate change. Decarbonisation and sustainability are going to be the themes of the coming years.

It has been interesting to see over the past few months that the petrochemical industry and its logistics partners are beginning to take the transition seriously and we have seen plenty of examples of innovative projects and approaches, especially in Europe. There will be more of that to come, and in other areas of the globe. But, on the basis of what I said a year ago, I do not feel confident in making any more specific predictions. Enjoy the ride!