…as we look back at 5 things that happened in global trade during this year's first lockdown

Thu 5 Nov 2020
Posted by: Noelle McElhatton
Trade News

As England goes into a second lockdown, we predict the future by looking back at the past, namely what happened in the first lockdown earlier this year:

1. E-commerce boomed 

Covid-19 massively accelerated the growth of e-commerce, according to Forbes, quoting an Adobe report that total online spending in May hit $82.5 billion, up 77% year-over-year. This represented an acceleration of growth by 4-6 years.

Amazon hired 100,000 warehouse staff in the US alone “to respond to the surge in online shopping” and targeted “unemployed hospitality workers” as potential new recruits, as one Amazon specialist told the Daily Update.

2. Importers and exporters told IOE of Covid-19 issues

A majority of the import and export businesses (62%) responding to questions from the IoE during a webinar in March reported a decline in demand for their services due to the Covid-19 outbreak.

More than a third (35.6%) said they been impacted by staff illnesses while a similar percentage (35%) reported cash flow issues. 

However, only 5.84% of firms had successfully applied for the government loan support available.

3. Warehousing reached capacity 

Non-essential goods quickly filled up UK warehouse space as they had nowhere to go with stores closed.

Peter Ward, chief executive at the UK Warehousing Authority, warned in April that warehouses were “quickly reaching capacity”.

The consequences of this were potentially “catastrophic”, ultimately causing backlogs that could have blocked the flow of essential supplies such as foods and pharmaceuticals.

4. Freight space prices peak

Rising freight prices became a major concern when global lockdowns began in February and March.

The issue ranked high in the IOE&IT weekly Covid-19 tracker of the big issues affecting importers and exporters: see here for the state of play in early June.

With a decline in demand for non-essential goods and services, and a rise in need to move PPE from the Far East to Europe, came a dramatic increase in the cost of air freight. Some airlines substituted passengers for cargo, as consumer demand fell.

In March the Times quoted the price for sending goods from Shanghai to Heathrow as rising by more than a third (35%), according to the TAC Index (a Hong Kong-based company providing price information for international air cargo).

And finally...

5. Translation apps demand boom

Language apps such as Busuu, Memrise and Duolingo surged in popularity during the pandemic. With much of the UK’s working population staying at home, on furlough or having been made redundant, many took the opportunity to enhance their language skills.

Bdaily reported that London-based Memrise saw a 71% increase in new user registrations in the UK in April and 31% increase globally, while Busuu told the Update they saw a 300% spike in new users from Italy and China in March.