Switzerland has effectively managed the recent pandemic situation. Since mid-May, the number of new infections there has been minimized. The Swiss government has begun to gradually remove the emergency measures it imposed. From the economic point of view, however, the pandemic has dealt a strong blow.
The country's GDP in May 2020 decreased 5% compared with May 2019. The unemployment trend is more worrying. According to the forecasts from the University of Zurich’s Higher Technical School (Eidgenössische Technische Hochschule Zürich), the Globalization Index (KOF) indicates 20% lower employment for Q2 2020. This figure is even lower than during the financial crisis of 2008-2009.
The government has set up targeted support programs for businesses. 20.2 billion Swiss francs have been allocated to help companies compensate for their employees’ wages lost as a result of limited operations.
Vladislav Lagun, Switzerland Region Country Manager at AsstrA, discusses current Swiss logistics services market conditions.
In today's market, what services have gained popularity?
Swiss exports of goods and services fell by 10-12% compared to last year. This has led to a corresponding drop in demand for freight transportation. However, industry indicators are gradually returning to pre-quarantine levels.
There is increased demand for courier and mail services, so companies from this sector hired more staff to process parcels at the peak of the spread of the virus.
How noticeable was the withdrawal of weak players from the logistics market?
In the market for transport and logistics services, there was no news about companies going out of business. At the same time, market leaders like Kühne & Nagel and Hupac reported double-digit percentage drops in sales.
Regarding manufacturers of goods and services, bankruptcies are actually down 32% compared to May 2019. Unfortunately, a wave of bankruptcies is expected over the coming months. These failing companies will likely be those that had an unfavorable financial situation even before the crisis.
What about prices in the Swiss market?
In April-May, prices fell 7%. As freight flows increase in the immediate future, we expect prices to recover. This expectation is confirmed by interim figures for June.
Is AsstrA preparing an anti-crisis business contingency plan in case of a second wave of infections?
Yes, we have a plan in place in case of a second wave of COVID-19 infections. First of all, for the safety of office workers, a remote work policy will be introduced again. Also, sales processes will be changed to emphasize qualification procedures for TNK clients. Daily video call briefings for office staff will resume. We believe that there will be minimal disruptions to everyday business.
Is it possible that employees will shift to working remotely on a permanent basis?
No, not at our office in Zurich. Moving to purely remote operations would be a significant limitation for our head office, where personal visits to companies and factories for security purposes are highly important. The AsstrA corporate group is growing our share of the Swiss transport services market, and personal communications with clients and partners are a key success factor.
There is a chance that companies will decide to have part of their staff work remotely. For example, according to a Deloitte poll, 41% of Swiss employees consider working remotely more productive than working in an office. Even so, the AsstrA sales team held 7 personal meetings with customers over the past 3 weeks to discuss plans for the coming months.