September 21, 2020

Francisco Aranda Manzano: The economy does not go back


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The logistics business sector is probably the most reliable thermometer of the state of the economy and if we look at its figures, we have to conclude that the much-announced economic recovery in “v” is not there, nor is it expected. Logistics companies are still a long way from a future recovery of the employment levels that existed before the pandemic was declared. According to the data that we have known this week, these companies have increased employment in August by 0.31% compared to the previous month. However, the year-on-year drop amounts to 2.82%.

Only in the so-called general regime, the increase in August compared to the previous month was 0.35%. Meanwhile, the year-on-year variation continues to be very negative, with 4.14% fewer workers than in 2019.

To measure the size of the damn bug’s claw in this sector, suffice it to say that Of the more than 50,000 existing ERTEs, 87% are due to force majeure. In other words, the coronavirus is leaving a desolate landscape, with many companies already in a situation of very serious difficulty to stay in business. But, even worse than the current situation, are the prospects because a certain increase in demand is not detected in the coming months. In fact, our French neighbors, whose GDP has fallen less than ours, have launched a recovery plan thinking that it will come within two years.

Therefore, the extension of the ERTE until December of next year is a basic measure for the maintenance of companies, also in this sector, but unfortunately it is no longer sufficient. The plummeting revenue has hit logistics at the worst possible time because it is in full transformation that the pandemic has accelerated dramatically.

“The extension of the ERTE until December 2021 is a basic measure for the maintenance of companies”

Let’s not forget that logistics has gone from being a “commodity” to becoming a competitive advantage for any activity. It is the fashion sector. Planners and managers of the supply chain for both industry, commerce or services, are required to generate added value, help maintain the end customer and be a source of recruitment of new ones, all for the purpose the change in habits of the new consumer who is increasingly digital. And the companies were, each to the best of their ability, undertaking that necessary technological transformation that requires powerful investments when the pandemic arrived and the economy stopped.

Subsequently, the switch has been returned to the “on” position, but we have been surprised that the demand is much lower than it was before. This means that companies are going to need extraordinary instruments to adapt our structures to the new levels of demand and avoid closures that nobody wants. But we also need these tools urgently to be able to plan. For example, it does not make sense to negotiate ERTE extensions every three months and decide 48 hours before the deadline, since there is no way to plan the future of a company. And it is not about facilitating more debt because we already have in Spain a high number of zombie companies whose level of leverage is completely unaffordable. According to data from the Bank of Spain, one in four companies is in technical bankruptcy and this is beginning to show in the delays in payments.

The first measure to adopt in this case would be the extension of the grace period for ICO credits, because when the demand begins to recover it will be impossible to meet the expenses of that moment plus the mountain of debts incurred.

In any case, the priority is to dramatically increase the capacity to detect and track coronavirus infections to avoid the socioeconomic impact of the confinements. In fact, carrying out large-scale tests and isolating those with positive PCR would have a monthly cost lower than the economic losses that the pandemic could cause in less than a week.

Francisco Aranda Manzano is president of UNO Logística

Francisco Aranda ManzanoFrancisco Aranda Manzano

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