Surely, if there is any industry that could weather a financial crisis, it is the logistics industry. Even with two or three countries doing poorly, logistic jobs could still thrive. But with world markets bound closer together than they’ve ever been, it has been easy for a bit of de-leveraging to cause a depression across all financial markets.
It is all about trickle down fear, and the only way to understand it is to take a quick look back.
The US housing boom of the mid 2000’s, encouraged by years of Federal Government de-regulation of banking institutions, vaulted the US economy to unprecedented growth. Everything looked great on paper. But within one or two years, sudden foreclosures came on the heels of this aggressive and irresponsible lending. The US market reacted negatively, causing fear that banking institutions would hoard their money to save their balance sheets and avoid bankruptcy. The fear of lending freezes followed, which would mean small businesses who need operational funds could be cut off from much needed loans. Without operational funds, there would be no payroll to pay employees. For everyday folks, that could mean job loss and ruin. For Americans that are unscathed by unemployment, there is still the massive burden of the bank bailout they have assumed, that sour feeling of resentment for those in the banking industry. A tightening of the belt for the American Consumer. Folks breaking out the coupons and taking on second jobs to pay off, and then destroy, their credit cards. This fear is not a good sign for logistics jobs in the US.
And the mistrust has become contagious, spreading to European and Asian markets, leaving no hiding places for the logistics industry. Already tourism to places like India are estimated to be down 20 to 30 percent. Travel and holidays is the last thing folks around the world are thinking about. The demand for shipped goods has already started to diminish.
So, at a time when it looked like online sales and tourism would reach all time highs, causing a secondary explosion in the logistics industry, we’ve seen a global meltdown the likes of which haven’t been seen since WWII. The logistics industry, looking forward to those online sales and shipments of goods and the transportation of millions of tourists, will be forced to take hits. Holiday profits they were counting on will not be there. They will no longer be able feed their expanded work forces.
It’s a chain reaction based on fear and unemployment dynamics, and when the movement of goods and tourists slows to a crawl this Christmas, then those in the Logistics Industry will be dragged kicking and screaming into this global economic meltdown.
Logistics Jobs Will Be Lost
There are some bright spots. The retreat of oil prices may allow logistics companies to take hits. And governments are quick to report that the global economic crisis has not yet affected jobs in places like Norway and highway concessions in places like São Paulo. China, ironically due to their isolationism and lack of willingness to buy into the world economy some years back, are expected to be able to muscle through this latest storm. In the United States, the job outlook for those seeking logistics jobs is favorable provided the US can adjust quickly to the current economic crisis. Some markets will actually thrive during the economic crisis. Fresh fruit shipping should not be affected and whole food distributors and super markets should be able to go forward unimpeded as consumers look to them for cheaper alternatives rather than eating at restaurants.
There has yet to be any reports from US businesses that actually say they are having too much trouble getting loans, and larger banks, even those pushing for the federal bailout, have stressed that the current crisis has not effected their ability to lend.
There is even news that smaller banks in the US are thriving during this crisis as well-qualified borrowers flee riskier investments. The smaller banks borrow from their local communities and lend in their local communities. These survival stories could alleviate the fear, mistrust and resentment people are feeling towards the banking industry right now.
These positive factors fighting the fear may just be enough to bolster consumer spending this holiday season, and could spare logistics jobs through the crisis.
