Covid-19, coming logistics lessons for the defence base, and why it isn’t all doom and gloom

5 June 2020 (Last Updated June 5th, 2020 16:34)

Covid-19, coming logistics lessons for the defence base, and why it isn’t all doom and gloom

With the commander of the Army Medical Research and Development Command telling reporters that the Army expects to have a vaccine by the end of the year, and human testing to commence late summer, the focus is once more on the role of the defence base in stabilising the current crisis. With defence having formed a critical mechanism for keeping cash flowing through manufacturing, as well as the logistics for supply distribution, repatriation, and emergent response support, important areas for reinforcement have been highlighted.

The vital role of military logistics apparent in this crisis will likely result in significant increases in EU and NATO expenditure on dual-use infrastructure, bucking the likely trend of declining opportunities in the contracting economies. With dual-use infrastructure an identified area of importance in the EU budget meetings on the 27 May, this is expected to be a useful way for European NATO members to attempt to meet the 2% GDP spend target, whilst investing domestically and in the potentially less palatable label of defence.

Critical roles such as airlift operations, defence consortiums developing ventilators and other medical gear, or the use of military logistics to distribute medical material, have demonstrated the weakness of commercial enterprise and civil society to some degree, presenting a number of key opportunities for defence companies in spite of the coming austere environment.

Key areas of emerging opportunity for companies in the defence space will depend on the ability to resent products and capabilities as dual-use, such as emergency response or airlift capability. With the logistical and supply chains’ weaknesses exposed, significant opportunities will exist for logistics management and planning, in addition to the necessary platforms themselves. The next phase of the crisis may well be quarantine management with an expectation of functioning supply chains. The ability to effectively manage logistics on this level and at this volume will in itself present industry important opportunities. With economies throughout Europe and the rest of NATO needing government stimulation, infrastructure and logistics, if for no other reason than their dual-count value, will be a key opportunity space to watch.