Recovery after the storm
This pandemic too, with its massive impact on northern Italy, will come to an end at some point. Maurizio Briglia is currently busy negotiating solutions with carriers, to prevent congestion in ports. The managing director of Combi Line, which is headquartered near Milan, senses from direct contacts with his clients that the signs point to a strong second half in 2020.
Maurizio, what were Combi Line’s staffing reaction to the crisis triggered by measures to combat the current pandemic?
90% of our 105 staff that work in our offices in Milan, Genoa, Livorno, Naples and Venice are working from home these days.
How was business in March?
Pretty good, especially for exports – until last week. In March we registered less imports from China, but exports were strong. Many Italian firms pushed as many goods abroad as they could as quickly as possible before the lockdown kicked in. In March, however, we recorded less imports from China and the rest of Asia. Now they’re increasing again, though – with a slight delay.
Has planning uncertainty led to any bottlenecks in the system?
We haven’t had any capacity problems yet, as Combi Line operates from a compound in Milan encompassing a number of warehouses. We don’t depend only on our own resources. With export activities down, that means that there’s more space for inbound consignments. Imports are already rising again now, particularly from Asia.
What about Italian shippers?
Estimates have it that 30–40% of factories have continued to produce; more than 50% closed. Many of them are allowed to continue to receive deliveries and raw materials, though.
Which goods are most affected by the fall in Italian exports?
The situation changes every day. We expect a short-term drop of around 70%. Even if factories re-open by the last week of April, they have to get ready again first. I expect a six-week transition period, with low export activity until things start running again in mid-May.
Are warehouse nevertheless full?
We’ve received many requests from carriers to transport containers to the hinterland intermodally and store them in inland terminals, to ease congestion in ports. This has worked out quite well.
How have you reacted in your firm?
Our main activity is LCL options. Low volumes will kill these services; there’s no time to reinvent them. We have to manage – and bank on a post-pandemic recovery.
What about your employees?
Our principles at this stage aren’t to access state measures quickly; we also want to avoid cuts just because of a two-month slowdown. Business was decent in 2019, and in my opinion a balanced 2020 is still ¬possible – with a strong second half of the year.
Hope springs eternal?
Not at all. This assessment is based on daily contact with our clients. Orders placed far in advance will have to be met. Relief after the storm will inspire enthusiasm and will encourage a strong second half. I can sense the will in the air and in the market to make up for lost time.
So all’s well that ends well?
We have to be super careful not to trigger a domino effect, through cash-flow risks knocking on from shippers to forwarders, carriers, etc. I expect the tension to be resolved after Easter.
Are there any positive effects of the crisis?
We’re one of the few neutral firms in Italy that runs two-way LCL / FCL railfreight services to and from China, exclusively for forwarders. With blanked sailings now weekly occurrences we now operate them on a regular basis. This traffic will grow quickly over the next few months.