On the occasion of the “Paradigm changes in mass consumption” conference organized by the Logistics and Transport Business Organization (UNO), logistics and transport managers from companies such as Fnac, Carrefour, or the IFA group, among others, put the situation in context currently facing the sector.
Six months after the carriers called off the strike after the publication of the Royal Decree-Law by the Government, the sector remains vigilant before its entry into force scheduled for September 4. The speakers agree that the measure was not enough and did not end up satisfying any of the parties, so they assume the high probability of a new strike.
Juan Ramón González, director of logistics and operations of the IFA Group, has defined it as “false recovery”, since despite the fact that the trucks are operating again, the cost overruns force them to have to increase prices in the middle of the year due to the constant variation in the cost of fuels and raw materials.
Meanwhile, the sector is facing a constant fluctuation in demand that they have experienced since the pandemic greatly altered consumption habits. After the rise of electronic commerce during confinement, the progressive return to normality means that both ‘e-commerce’ and physical stores coexist again, although online shopping is higher than in 2019. Bertrand Renault, director of Chain Supply, Logistics and Information Systems of Fnac, pointed out the importance of both models coexisting, as long as the physical store adapts and stops being just a shop window to become a place of service.
The uncertainty and the difficulty of forecasting demand, despite the improvement of forecasting tools, is a key factor that forces distributors to change the relationship with the points of sale. Raúl Tijero, regional director of Logistics for the central region of Spain of Luis Simoes, has indicated how the negotiations between the two parties are already based more on storage capacity than on expected sales due to the high fluctuation in demand.
The constant changes in fuel prices, the increase in the cost of raw materials and the lack of supplies such as electronic components are just some of the factors that hinder market stability. In the case of Antonio Maciá, director of Supply Chain at Suavinex, the collapse of the port of Shanghai means that the material they import takes a month compared to the 21 days prior to the incidents.
One of the key factors for the recovery of the logistics sector is consumption. Despite the high inflation, the speakers hope that the situation will improve in summer with the arrival of tourists and the rise of the hotel industry. “People want to consume after two difficult years, although they don’t have it easy,” said Ramón Arcas, Director of Operations at FritRavich. However, both he and Juan Ramón González consider that in September and October there will be a recession again, when people are aware of the drop in purchasing power due to the current situation.
For González, the imminent rise in interest rates by the central banks will affect the economy as a whole and affect consumption. Both he and his counterparts request that the Government take measures to mitigate the high costs that they carry to prevent inflation from continuing unchecked.
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