Logistics sector moderately impacted by COVID-19 pandemic, brands could lose up to 10% of brand value, equating to a US$16.7 billion loss cumulatively
UPS has retained the title of world’s most valuable logistics brand, brand value US$29.5 billion
DSV is the sector’s fastest-growing, brand value up 41%
MTR is the world’s strongest logistics brand, Brand Strength Index (BSI) score 84.8 out of 100
The world’s top 25 most valuable logistics brands could lose up to US$16.7 billion worth of brand value as a result of the COVID-19 pandemic, according to the latest Brand Finance Logistics 25 2020 report. Brand Finance’s analysis shows that the logistics sector is a moderately impacted industry globally and could face a potential 10% loss in brand value.
The sheer size, diversification and complexity of the logistics sector mean that brands are going to be affected differently from the unique challenges that have arisen from COVID-19. On the one hand, the e-commerce, and post and parcel division, have benefitted and flourished as people resort and rely on online orders more amid global lockdowns.
This increase in a B2C business, however, has not been able to compensate for the heavy decline in B2B volumes generated through supply chain and global freight forwarding services.
Looking beyond the logistics sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.
Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. The likely impact on brand value was estimated for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.
Richard Haigh, Managing Director, Brand Finance, commented:
“Looking forward, as the world seeks to recover from the monumental disruption that COVID-19 has posed, we may witness a reconfiguration of global supply chains, either shortened or diversified in some way, as the pandemic has exposed the faults and flaws in the current mode of operation. Those brands that rise to this challenge are likely to fare better in the coming year.”
UPS posts top brand value
UPS has retained the title of the world’s most valuable logistics brand with a brand value of US$29.5 billion. As the world’s largest package delivery brand, UPS employs over 495,000 people globally and in 2019 delivered a staggering 5.5 billion packages and documents. UPS celebrated strong revenue growth last year, thanks to the brand’s strong volume growth in the US, which is thriving under its new transformation initiatives, including increased automated capacity and new aircraft within the fleet.
Despite global disruption from COVID-19, UPS has benefitted from the spike in demand for home deliveries, posting higher than expected revenues and profits in Q2 this year. This, paired with stronger demand in Asia and increased healthcare shipping activity, has gone some way to protect the brand from the coronavirus fallout.
DSV soars 41%
Denmark’s DSV is the fastest-growing logistics brand in the world following a 41% brand value growth to US$2.2 billion. With the Panalpina acquisition completed in August last year, the merger has launched DSV to become the world’s second-largest airfreight forwarder, only behind DHL (brand value down 9% to US$10.1 billion).
This merger has expanded the brand’s global footprint, increased freight volumes, network and capacity as well as bringing new vertical expertise and products, all of which puts the brand in a strong position to grow the business even further.
MTR is the sector’s strongest
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value.
According to these criteria, MTR (up 9% to US$2.9 billion) is the world’s strongest logistics brand with a Brand Strength Index (BSI) score of 84.8 out of 100 and a corresponding AAA brand strength rating.
Celebrating its 40th year of operation, MTR now boasts over 260km of railway networks in Hong Kong, carrying over 1.9 billion passengers per year. Maintaining its on-time passenger journeys at an outstanding level of 99.9%, the brand has broken world records for its best-in-class service.
MTR has suffered a tumultuous year, however, with the civil unrest that has swept Hong Kong significantly impacting the brand, with rioters repeatedly targeting the network and vandalising its stations. This, paired with the repercussions felt from the coronavirus pandemic, namely the drastic decline in travel demand and ridership, signals a difficult journey ahead for the brand.