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As COVID Resurges in China, Industry Leaders Convene to Prepare and Predict the Impact of the Chinese New Year this Year on Shipping, Trade and Supply Chains

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Archives, Global Logistics, Global Trade Daily

As COVID Resurges in China, Industry Leaders Convene to Prepare and Predict the Impact of the Chinese New Year this Year on Shipping, Trade and Supply Chains

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Container xChange, an online container logistics platform, is hosting a free for all webinar to discuss and predict the impact of the Chinese New Year on China’s manufacturing industry, labor availability and on trade. The webinar is scheduled on Thursday, 12 January 2023, at 13:00 CET.

The eminent panel of speakers includes Cathy Morrow Roberson, Founder and President of Logistics Trends & Insights LLC, Mr. Sun, Director / General Manager @ CNTRANS and Christian Roeloffs, cofounder and CEO, Container xChange

“The infections in China and their impact on the supply chain is a very pertinent topic for many containers logistics and supply chain professionals in the industry. We know that traditionally the Chinese New Year halts the production and movement of containers for two long weeks (minimum) in China and the impact is generally felt for weeks after across the trade lanes. What we hear from the ground is that the consumer demand is considerably low and hence the impact of a shutdown in China is going to be limited as compared to the last year(s). But we believe it is difficult to predict and therefore, demands a closer look at the data and the market scenario.” said Christian Roeloffs, cofounder and CEO, Container xChange.  

“We bring a panel of experts to talk about how the Chinese New Year will impact trade and supply chain in China and for the rest of the world. We are hopeful that such discussions bring clarity to the industry professionals,”  he added.

The official public holiday for Chinese New Year only lasts a week and is scheduled this year for January 22 -28, 2023. However, in most previous years factory output in China has been impacted for far longer as many workers take extended holidays.

At the webinar, the panel will cover the predictions on how Chinese New Year will play out this year and how the industry can prepare for the coming times keeping in mind the resurgence of COVID infections in China.

About Container xChange   

The container is one of the most impactful innovations in history—using standardization to power globalization and lift billions of people out of poverty. But contrary to the standardized container itself, most processes in container logistics have not been standardized nor innovated — and are still frustratingly complex, manual and error-prone. Combined with thin margins, this makes it difficult for logistics businesses to survive and thrive.

Container xChange is the leading online platform for container logistics that brings together all relevant companies to book and manage shipping containers as well as to settle all related invoices and payments.

The neutral online platform…

  1. connects supply and demand of shipping containers and transportation services with full transparency on availability, pricing and reputation,
  1. simplifies operations from pickup to drop-off of containers,
  1. and auto-settles payments in real-time for all your transactions to reduce invoice reconciliation efforts and payment costs.

Currently, more than 1500+ vetted container logistics companies trust xChange with their business—and enjoy transparency through performance ratings and partner reviews. Unlike limited personal networks, excel sheets and emails you rely on, Container xChange gives its users countless options to book and manage containers, move faster with confidence and increase profit margins.

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Archives, Global Logistics, Global Trade Daily

China logistics still Struggling with COVID

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So far, the implications for ports and airports appear not to be too serious, although why this is the case in not clear, as many major cities and regions are in some form of emergency measures. Ominously, the city of Shenzhen has issued a “work from home” order despite the wider region appearing to relax measures in the face of public disturbances.

Chinese state media reports that the neighboring port of Guangzhou, “has seen a limited impact on logistics and trade so far thanks to the local government’s launch of dynamic epidemic control measures to bring down the possible impact of the outbreak and quick reining of the virus.”

Ports further up the coast also seem to be unaffected. For example, the city of Dalian relaxed measures at the end of last week.

However, the city of Shanghai, which is the location for China’s largest container port, has just embarked on a further round of restrictions, with mass testing, business closures and movement restrictions. In the past such measures have led to serious disruption at both ports and airports, with truck-traffic in particular unable to drive through the city.

Similar measures are reported to be being applied in Chengdu and Wuhan, with both production and logistics activities being disrupted. Wuhan is a significant river port on the Yangtse and a key feeder location for Shanghai. Last week saw unrest in Zhengzhou in response to the imposition of new measures, with the most high-profile disturbances at the large Foxconn production and logistics hub in the city.

The situation is all the more febrile due to the political implications. The central Chinese government has attempted to articulate a change in policy over COVID measures, emphasizing a shift away from sweeping quarantine policies. However, it does not seem that these new policies are being applied on the ground. There has been extensive public unrest in reaction to these measures.

Judging by the little emerging from China, it seems that much of the regional and national government is keen to keep production and logistics operations continuing. However, it is unclear how successful they will be in the face of other parts of the state that seem wedded to a more extreme response.

The immediate implications for air and sea freight do not yet seem to be at the level of seriousness seen in 2021, when a number of major ports in regions such as the Pearl River Delta and Shanghai reduced operations to a minimum. What the present situation implies is that sea and air freight will recover at a slower rate than had been assumed. In particular it would appear that markets such as aircraft belly freight will remain short of volume.

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Archives, Global Trade Daily, Special Reports

5 Reasons Company Leaders Resist Needed Change – Even During This Crisis

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The thought of change can be scary, even more so during the type of crisis we’re experiencing now with the COVID-19 pandemic. Although there are business leaders who are already implementing change in response to the challenging economic and operational landscape, many others are not.

“Sometimes the writing is on the wall and organizations are triggered to change,” says Edwin Bosso, Founder and CEO of Myrtle Consulting Group and the ForbesBooks author of 6,000 Dreams: The Leader’s Guide To A Successful Business Transformation Journey. “In fact, members of the organization often are keenly aware that something needs to be done. However, despite that, management does not act, and the cost of inertia can be high.”

According to Bosso, there are five reasons why leaders resist change and, as a consequence, struggle to move their company forward:

They confuse important versus urgent. Leaders sometimes confuse the terms important and urgent. “Important issues are those that do not necessarily have an explicit deadline, like urgent issues, but can effectively have some impact, large or small, on a business,” Bosso says. “The confusion sets in when owners and managers spend too much time putting out fires rather than planning. For example, the company may know that it is important to upgrade its operations. But it doesn’t become urgent until later on when the company looks at the output of its competitors that have completed transformation projects and have become a lot more cost-competitive.”

They lack courage/leadership abilities. Successfully initiating and executing a change process involves numerous leadership skills. “It can be intimidating taking on such a challenge that, to some leaders, may seem like moving a mountain,” Bosso says. “Others are better prepared to take risks, confront reality, envision a better way, make plans, and then act on those plans to lead a change.”

They misalign the incentives. The incentive to change or transform organizations can be misaligned with the incentives of people who are in charge of leading those transformations. “Misalignment of personal incentives can cause us not to act, even when we know it’s the best thing for the company,” Bosso says. “When we are in line for a promotion and higher pay, we certainly don’t want to take on risks that can potentially work against us.”

They lack support and/or resources. Not being afforded the requisite tools or the consensus for necessary transformation can leave a leader feeling powerless. “This is a set of obstacles that many leaders run into,” Bosso says. “The powerlessness can come from the lack of company means, organizational backing, human capital and resources to support the cost of a transformation. After a while, they run out of energy, or time, to make the case.”

They lack a method. It’s not uncommon for leaders to know the difference between where their company is and where it could be, but they don’t know how to proceed. “In such situations, leaders often freeze up and put off the impending need to change, or they approach it through trial and error,” Bosso says. “Having a methodology is beneficial when taking on such an effort. Some leaders take the time and effort to learn what needs to be done, while others bring in experienced people to provide a method for leading a smooth and successful transformation.”

According to Bosso, leaders must understand that there will never be a perfect time for change, but also that often the right change only happens if they force the issue.

_______________________________________________________________

Edwin Bosso, the ForbesBooks author of 6,000 Dreams: The Leader’s Guide To A Successful Business Transformation Journey, is the founder/CEO of Myrtle Consulting Group (www.myrtlegroup.com). Bosso specializes in operations improvement and change management, and his project history includes work for major brands such as Heineken, Texas Petrochemicals, T-Mobile, Anheuser-Busch, Rohm and Haas, Campbells Soup Company, Kellogg’s and Morton Salt. A wide range of assignments has taken him throughout Asia, Europe, and North America. He completed his undergraduate education at The Hague Polytechnic in the Netherlands and earned an MBA from Rice University in Houston.

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Archives, Banking, Global Trade Daily, Special Reports

Will Consumers be in a Better Place by the End of 2020?

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The pandemic unleashed a staggering one-two punch on the economy – double-digit unemployment and drastically reduced revenues for many businesses. As states reopen with varying restrictions, what the future holds in the next six to 12 months is anybody’s guess.

But while the economic downturn will continue to impact consumers and businesses indefinitely, it could have been even worse, says Ron Oertell, Chief Financial Officer at LendingUSA, LLC.

“Given the high unemployment rate, there was a very strong concern out there as to what short-term effect the pandemic would have on the consumer,” Oertell says. “The surprise has been that consumers have been relatively stable in paying their bills. That has been driven in part by public policy decisions such as the stimulus payment plans and the government stepping up in a strong way.

“In past crises, the government has walked solutions into the crisis. This time they have run to fix the problem from many different aspects. From a consumer finance side, deferments and defaults are lower than some of the initial estimates. However, there is a strong concern that we’re not out of the woods yet. We still have a very high unemployment rate. And nobody knows how long it’s going to take for the true economy to recover and for the marketplace to drive strong consumer performance.”

Oertell gives his outlook on key issues facing consumers as the nation tries to get back to work during the pandemic:

Tightening lending. With unemployment remaining high, many people seeking loans or credit may find both harder to secure. “I do believe it will be a challenge for many people to obtain credit,” Oertell says. “There will be an undersupply of credit and bank-backed funding for individuals who are unemployed. When the economy was strong, credit was relatively easy to obtain, but now lenders are cutting credit limits on some current customers and making new credit more difficult to get. The country went from its lowest unemployment rate in many decades to its highest in 90 years, and banks are showing they are nervous.”

Government support. If more consumers are denied credit or loans, where will they turn? “Much will depend on the actions of federal and state governments,” Oertell says. “If governments and lenders continue to provide unprecedented support to individuals through payments and/or expense relief measures, such as mortgage payment moratoriums or the halting of eviction proceedings, then I do not see personal bankruptcies rising significantly. The speed of the recovery will be critical in determining the effect of the high unemployment rate on the number of bankruptcies. “A theme many have recently expressed is the confidence in the government to continue forms of consumer support through the election period. However, such governmental actions cannot continue indefinitely. When consumers are denied traditional lower-cost credit, many will turn to higher APR lenders or non-traditional forms such as title loans to cover unexpected or emergency life events.”

Consumer debt. Recent reports have indicated consumer debt is down as a result of the pandemic and people drastically reducing their shopping. What impact could that have on people getting credit? “A reduction in shopping could reduce an individual’s request for credit as well as reduce outstanding balances on credit cards,” Oertell says. “Traditionally, both factors would increase availability based upon standard underwriting metrics. However, many lenders have placed hard cut-off rules based on employment status and other factors, which would more than offset any benefit from the reduction in shopping. Over the next few months, lenders will continue to deal with the uncertainty of future credit-worthiness when traditional indicators of payment behavior are distorted and capacity to pay in is highly uncertain.”

“Consumers are facing very challenging economic times, but the long-term impact of the pandemic on the credit markets isn’t close to clear,” Oertell says. “How many businesses are fully functioning, and whether the unemployment rate is substantially lowered, will be the key things to watch in the next few months.”

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Ron Oertell is Chief Financial Officer at LendingUSA, LLC, a consumer lending company focused on physical point-of-sale locations. He has more than 25 years of experience as an attorney, investment banker, investment fund manager and CFO, and has completed over $9 billion in capital transactions.

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Archives, Global Trade Daily, Utilities

U.S. States and Metros Hit the Hardest by the Drop in Oil Prices

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The COVID-19 pandemic has sent the world economy into turmoil as lockdowns around the world have caused economic activity to grind to a halt. The demand for oil has crashed in the wake of the growing pandemic, sending oil prices diving and even dipping below $0 per barrel. According to the most recent data from the U.S. Census Bureau, the U.S. employs close to 130,000 people in the oil and gas extraction industry. Many of these workers now face uncertain employment.

Bureau of Labor Statistics (BLS) data from the last two decades shows that employment in the oil and gas sector tends to rise and fall with crude oil prices. Price drops in 2014 resulting from oil surpluses caused the oil and gas sector to shed roughly a third of its workforce. Today, the pandemic combined with a lack of storage capacity for excess oil have caused the price to fall sharply again—a trend that threatens thousands of jobs.

The concentration of oil and gas extraction workers varies widely by location. At the state level, Oklahoma and Wyoming have the highest concentrations of workers in oil and gas extraction at 7.7 and 6.7 times the national average respectively. Texas, with a relative concentration of 5.8 times the national average, boasts the largest number of total oil and gas workers of any state. Many states such as Hawaii, Maine, and Rhode Island don’t produce oil or natural gas and have no employees reported by the Census Bureau.

To find the metropolitan areas hit hardest by the drop in oil prices, researchers at Construction Coverage used data from the U.S. Census Bureau and the Bureau of Economic Analysis. The researchers ranked metro areas according to the relative concentration of employment in the oil and gas extraction industry. Researchers also looked at the total number of oil and gas extraction workers, the median earnings for those workers, and cost of living. To improve relevance and accuracy, only metropolitan areas with at least 100,000 people were included in the analysis.

Here are the 25 major U.S. metropolitan areas with the highest concentrations of oil and gas workers:

For more information, a detailed methodology, and complete results for all major metros and U.S. states, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/cities-hit-hardest-by-drop-in-oil-prices

Report republished with permission

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Archives, Commentary, Global Trade Daily

Three Ways the COVID-19 Crisis has Affected Corporate Travel and Entertainment Expense Claims

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In a few short weeks, COVID-19, also known as the coronavirus, has permeated every aspect of our lives and completely changed how (and which) businesses operate. Business travel and entertainment have come to a standstill. Many companies have switched almost entirely to working from home to enforce social distancing or comply with mandatory shelter-in-place mandates. As the economic landscape becomes increasingly uncertain, many companies have been forced to take difficult actions to cut spending as they endure a severe downturn of unknown length.

As the crisis progressed, the scale and nature of expense claims have changed drastically. As expected, trip cancellations and work-from-home expenses increased dramatically, while business travel expenses dropped.

AppZen wanted to dig even deeper into the data to find out how employee expenses have changed in comparison to this period last year: Which industries’ expenses have been most and least affected by the current environment? What kinds of expenses are changing the most?

The baseline: Strong year over year growth before COVID-19

To contextualize the changes wrought by the current COVID-19 health crisis, let’s first look at what happened before it began. Between January 2019 and January 2020, expenses in the top 10 largest categories grew by 24%. While COVID-19 was causing significant disruptions in Asia and Europe in early February of this year, overall expenses still rose by 8% compared to last year. By March, that percentage had declined to about 7%.

In March, travel expenses began to drop

Unsurprisingly, travel-related expenses such as airfare, hotels, baggage fees, taxis, and trains dropped 9% between March 2019 and 2020. Looking at weekly data shows just how precipitously travel expenses have dropped. Expenses in early March were higher than in 2019, but as the month progressed, expense claims fell dramatically. By the last week of March, travel expense claims were down by 40% compared to the previous year.

However, not all industries are equally affected. Heavily white-collar, digital businesses that have been deemed “non-essential” have dropped off the most. In finance and insurance, for example, expense claims fell by 47% year over year in the last week of March. In information businesses (mostly software and media), claims fell even more – over 63%.

Businesses like construction (whose “essential” status varies by type and location), and life sciences (definitely essential!) were affected to a much lesser extent to date. In the same timeframe, expense claims for construction companies only decreased by 12% compared to last year. Life sciences companies saw an uptick in expenses during this time – a 3% increase from last year, though the trend line in the previous five weeks, if it continues, points toward a decrease in the weeks ahead.

Office expenses have gone up as many employees have shifted to working from home

Expenses in the office supply category have increased across every industry during this timeframe. The most significant spike was during March, where AppZen saw 80% growth in these expenses across sectors.

As companies closed their offices and began encouraging their employees to work from home, many employees needed to expense office supplies such as laptops, monitors, cables, and keyboards. The last week of March was the most significant spike in these expenses, particularly for the construction, information, and professional services industries.

Variations in expense categories by industry

In March, expenses in categories such as subscriptions, training, and internet were 20-25% higher compared to March of last year. Demand for subscription-based services such as video conferencing software rose in March as employees began to work from home. This would explain the additional charges for the internet, as some companies allow remote employees to be reimbursed for internet usage.

AppZen also saw variation by industry. Both life sciences and construction industries show an uptick in transportation mileage during March. This may be because these industries are considered essential, and car travel adheres more strongly to social distancing requirements in the current environment. Finance and insurance companies saw a significant surge in subscription expenses, over seven times higher than 2019. Construction companies saw the most significant rise in office supplies, five times higher than the previous year.

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Archives, Global Logistics, Global Trade Daily, International Trade

Free Trade in Free Fall: How Companies Can Navigate the Pandemic

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Even before the global pandemic arrived in every corner of the globe, free trade and the globalized trading system were in critical condition. The bruising U.S.-China trade war, along with regional conflicts such as the Japan-Korea trade war, Brexit, import tariffs, the decline of the WTO, left companies struggling to adjust supply chains and many wondering whether the globalized trading system will survive.

Yet these challenges pale in comparison to the trade and supply chain issues the COVID-19 pandemic generates on a nearly-hourly basis. Demand has plummeted around the world for goods and services as vast portions of humanity are isolated in their homes and left without incomes. Export restrictions on medical supplies, food and other critical products, while still limited, are on the rise, creating fears of reverse protectionism. Airfreight capacity has dropped as tens of thousands of flights are grounded. Logistics companies are struggling to deliver goods as nearly every country in the world has implemented ever-tightening border restrictions in a matter of weeks.

As a result, companies and individuals are struggling to keep our grocery stores, pharmacies, and retailers stocked with the cheap and plentiful products consumers have grown accustomed to, not to mention supply the medicine and equipment that our frontline healthcare workers desperately need. While these are dark days in trade, there are ways to immediately protect your company and your supply chain.

First, companies must protect their workers from the disease. Crisis management procedures to keep people healthy, whether that means remote working procedures or social distancing policies to keep production facilities running, should be implemented and revisited as the crisis moves on. While most companies have implemented these policies as a result of government orders, companies should continuously evaluate how to both keep their employees safe and their companies running. Fighting this disease and its economic ramifications is a marathon, not a sprint, so companies should find ways to maintain continuity as long as possible.

Next, now is the time to be hands-on with your supply chain. Companies need to examine every aspect of their supply chain and logistics: every container, every ship, every truck, every port, and every border crossing. In this way, you can understand how your goods must pass to understand how the pandemic will affect each shipment. Seafreight remains stable, though that could change, so companies with any slack in their supply chain should consider moving goods in advance through slower means.

Companies also need a proactive examination of their legal risks.  This assessment must include a review of which contracts may be broken through force majeure and other similar break clauses, whether initiated by you or the other party. At first, only producers were using force majeure as they realized they did not have the raw materials, labor shortages, and logistical support to deliver products. Now, importers and end-users are breaking their contracts as demand drops and shops close. Similarly, insurance markets are struggling to find ways to insure goods, services, and even projects as supply chain issues threaten to slow projects around the world. A holistic examination of your legal risks will save your company money and time when legal challenges arise.

Companies also need to find help from their governments. Governments are looking to help companies stay afloat, keep people employed, and keep goods and services flowing, but they are frequently looking for answers from companies. If you are not part of a trade association, join one. And if you do not have representation in Washington, now is the time to make sure that government authorities know how best to help your company and industry navigate this crisis and to remind them of the value that trade brings to communities around the world, and where you need help.

The COVID-19 crisis will leave the global trading system permanently altered, but it is also a reminder that, just as our physical health is intertwined with our neighbors, our economic health is also dependent. Long-standing trade relationships are under strain, contracts will be voided, and shipments unfulfilled. Yet a healthy dose of compassion and understanding that your business partners are facing the same challenges as your company may help you maintain your trading relationships through these hard times and allow them to rebound faster when the crisis is over.

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Benjamin Kostrzewa is a Registered Foreign Lawyer at Hogan Lovells, working in Hong Kong and Washington serving the needs of clients on both sides of the Pacific. Before joining Hogan Lovells he served as Assistant General Counsel at the Office of the U.S. Trade Representative.

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Archives, Global Trade Daily, Special Reports

Your Enemy is not Uncertainty, but Complexity

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As a nation, we look to the economy to answer our basic questions about the future. What will fluctuations in global markets and supply chains bring? How will the dollar recover from the circumstance of a stalling consumer market? And what impacts, if any, will change the way we do business? As spring approaches, the anticipation around these questions builds. We watch for signs of our shuttered economy lurching back into motion.

Businesses, much like individuals, have coping mechanisms when faced with a crisis. There are ways to build a business contingency plan, even with unforeseen challenges. Some industries have not dusted off their plans since the financial crisis of 2008, and there is anxiety around what it means to enact it. But the truth is: business contingency plans are built precisely for moments like the spread of COVID-19. And while words like “unprecedented,” “alarm,” and “volatility” rule headlines, reactivity is not how businesses run. It is through preparedness and foresight. It is with a business contingency plan.

While no leader takes comfort from enacting their company’s plan, the ability to swiftly empower crucial business functions with ease is possible. Uncompromising company and financial data security and work-from-home procedures are not mutually exclusive. A bit of knowledge is required to migrate an office environment to the home without opening new vulnerabilities.

Divide and Conquer

Dividing and conquering is the oldest trick in the book for any opportunist looking to damage their business. Security hackers and other ill-intentioned opportunists look for times of organizational chaos to strike. They trust that business leaders have overly-divided their attention and that employees will not adhere to traditional protocols for data security or safe treatment of sensitive information.

There are also a substantial number of leaders who will focus on the uncertainties of the future, preventing them from seeing vulnerabilities that are right in front of them. This, of all things, means that many companies and their leaders must know the enemy is not the distractionary dips and dives of the economy, but the complexity of an organization that prevents it from responding elegantly to uncertainty. Military strategist Sun Tzu of The War of Art provides insight into how we should prepare for battles with the unknown:

“Know the enemy and know yourself; in a hundred battles, you will never be in peril. When you are ignorant of the enemy, but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and yourself, you are certain in every battle to be in peril.”

Having a business contingency plan is only the beginning. Redraw your battle lines when uncertainty strikes, and you will unmask the hidden areas that need better solutions.

Strategies for reducing business complexity:

Strategy #1: Define ‘new normal’ from the top down, but bring insight from the bottom up

Your employees will not naturally intuit where the new boundary lines exist. Spell it out so that everyone is on the same page. Barring in-person meetings, you may need to host a company-wide Zoom call with a panel of C-Suite leadership to reassure, set new expectations, and answer questions.

Most importantly, leadership should use this as a chance to gather further information. Seek out the experiences of those who serve your customers directly to get their perspective. How are customers responding to the shift? What are their emerging needs, and is there a niche there that your industry can uniquely fill? Keep your company’s ears to the ground.

Strategy #2: Banish organizational drag through automation.

In environments of economic hardship, businesses with leaner operations and less organizational drag do better. Cutting out redundant manual processes is crucial to eliminating complexity. A business contingency plan will help enact the first line of defense for your business. However, this is not all you will need. The second wave of reinforcements is crucial to keep your business advancing through times of uncertainty.

Automation is your greatest ally in this fight. Now is the time to abandon stale processes. If they’re manual or paper-based, requiring cartons of messy file work or repetitive wet-ink signatures, its time to rethink. Lean heavily on electronic AP solutions, which can clear up the bottlenecks choking out crucial supply chain relationships.

Never in history has the value of a swift and reliable supply chain been more evident than now, as hospitals face shortages of both personal protective equipment and crucial medicines. Industries are re-learning a valuable lesson: that while necessity is the mother of invention, the cost of waiting to innovate can be incredibly painful.

Strategy #3: Reach for a sturdy bottom line more than blue-sky profits

This year is unlikely to offer many sunny prospects in the realm of profits. Yet cost-cutting initiatives will provide the kind of stability a company needs to make impressive cumulative gains in the coming years. What does this mean? Playing defense isn’t your only strategy. You can also cut costs to preserve the liquidity you do have.

With electronic tools already up and running for staff communication or remote meetings, it’s time to ask yourself how you might unburden other areas of the office from slow performance inefficiencies. What is sending through the mail that could be automated? How might making payments to suppliers electronically cut back on paper check costs? Explore every avenue for cost savings. There are many electronic solutions at the ready to lift manual-based work with minimal if not zero downtime for your business. Now is the time to employ these solutions and not hold back when better-designed options exist.

Strategy #4: Invest in secure solutions without needing to hire more IT

Everyone at this point could do with one more great IT hire, but the point of a business contingency plan is to be resourceful with what resources do exist. Making quantum leaps from the office to a remote setting is much easier for companies who have already made steps toward digital transformation.

Instead of losing more time to processes like answering phones, getting approvers to hand-sign checks, and sending paper mail to closed-up company headquarters, make them digital, with greater control and traceability. Fraudsters’ potential access to your systems diminishes when you have greater visibility and fewer cooks in the kitchen. Higher thresholds for security mean that problems or threats are identified in real-time and careless or lagging processes fall by the wayside.

Strategy #5: Innovate, innovate, innovate

It’s tempting to lose steam during a crisis and consider it the wrong time to try creative solutions, but the logic doesn’t stand. Now is absolutely the time to try new things.

Since volatility has introduced new stressors into the equation for your business, the target has shifted. A brand new segment of the market may have just locked into place in the form of potential customers. You have the potential to attract them by showing that you understand their needs quicker than anyone else in the space. This requires agility and a bit of risk, but it’s a risk worth taking, even under present circumstances. Innovation isn’t an optional advantage in times of plenty. Innovation is essential to the survival of every business.

In the words of Sun Tzu, “In the midst of chaos, there is also opportunity.” Do not take advantage of the chaos, but respond with resilience to its demands.

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Lauren Ruef is a research analyst for Nvoicepay, a FLEETCOR company, with years of experience conducting market research and crafting digital content for technology companies.  Nvoicepay optimizes each payment made, streamlines payment processes and generates new sources of revenue, enabling customers to pay 100 percent of their invoices electronically, while realizing the financial benefits of payment optimization.

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Archives, Commentary, Global Trade Daily

How Downtime Forced by Coronavirus Could Be An Entrepreneurial Opportunity

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For would-be entrepreneurs who have longed to turn a side hustle into their main hustle, the shutdown created by the coronavirus may have provided that long-awaited opportunity.

Often, a lack of time is one of the major reasons people give for not starting their own businesses. But these days – with everyone urged to stay home and outside activities limited – those newfound extra hours could be invested in taking steps toward creating that business, says Shravan Parsi, CEO and founder of American Ventures, a commercial real estate company, and ForbesBooks author of The Science of the Deal: The DNA of Multifamily and Commercial Real Estate Investing (www.scienceofthedeal.com).

“It definitely takes effort, energy, and a willingness to step out there, but the rewards can be great,” Parsi says.

Parsi was a full-time pharmaceutical research scientist working 9 to 5 and dabbling in real estate on the side when he realized his regular job was hampering his real estate deals because he wasn’t available to talk with people or show a house during the day. Eventually, he bid farewell to his old career and launched his new one in commercial real estate.

Parsi has a few tips for those who long to shake loose from their current careers and venture into something that drives their passions:

Be bold and flexible. A willingness to take chances and adapt to changing circumstances is critical. Even in seventh grade in his native India, ambition boiled in Parsi. He realized that to become the kind of global leader he aspired to be, he would need to know English. So, he transferred to an English school. “My parents supported my decision even though they knew it would be challenging,” he says.

Be interested in everything and observe closely. You never know when opportunities to expand your knowledge – and be inspired by new ideas – will present themselves. Parsi says he learned this lesson at age 14. His father was a doctor who himself invested in real estate as a passive investment and was having a two-story house built – one story for the family and one as a rental. “He pointed out that I had time to kill over summer vacation and recommended I watch the process,” Parsi says. “So my brother and I watched the construction and supervised the contractors. It left a strong impression on me.”

Pivot when necessary. Life doesn’t always go as planned – as the coronavirus has shown – so you need to be prepared to change direction, Parsi says. As an example, Parsi originally planned to follow in his father’s footsteps and become a doctor. But admission to medical school in India is highly competitive and he missed the cutoff criteria by one-tenth of a point. That’s when he pivoted and became a pharmaceutical scientist instead.

Learn how to sell anything. At different periods in his life, Parsi worked in a cell phone store, sold Amway products, and sold nutritional supplements. Those experiences weren’t always the best, he acknowledges, but he did gain something from them. “I realized that if I can sell the products and a story and recruit others, then I can sell anything,” Parsi says. “Selling is a pivotal skill most entrepreneurs must have.”

Anyone who is inspired to get their entrepreneurial drive moving during the current downtime should not completely throw caution to the wind, Parsi says.

“I did not quit my pharmaceutical job right away,” he says. “I had an objective to stay in that job until the real estate income was twice the value of my salary. When I hit that objective – when real estate was no longer a side hustle – I decided it made sense to invest more time in real estate than the scientific position.”

Now American Ventures is a successful multifamily and commercial real estate investment firm with a proven track record.

“Never settle for less,” Parsi says.

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Shravan Parsi, CEO and founder of American Ventures, a commercial real estate company, is author of The Science of the Deal: The DNA of Multifamily and Commercial Real Estate Investing (www.scienceofthedeal.com). Parsi is an entrepreneur and innovator with a background in the diverse fields of real estate investing and pharmaceutical research. He has been involved in Texas real estate since 2003. Born in India, Parsi developed a life-long interest in business and investing from watching his father, a medical doctor, invest in real estate. Parsi has acquired several apartment complexes in aggregate of over 4000 units  and several commercial properties by co-investing with private equity groups, pension funds, sovereign wealth funds, family offices, and accredited investors.