COVID-19 – Economic Impact on the Transport Industries

In a letter addressed to Secretary General of the United Nations, the Secretary General of the IRU, raised issues regarding the economic impact of COVID-19 that poses a big risk to primarily small and medium-sized enterprises.

​First focusing on the facts and figures of the economic impact, the letter mentions that according to WTO figures the global economy is projected to decrease sharply by up to 8% and global trade will fall by up to 32% this year as a result of the COVID-19 pandemic.

The letter then mentions that the IRU have conducted in-depth research and developed direct reports from the Road Transport industry to show the serious impact that will be felt across the goods and passenger road transport industries:

For goods transport:

  • Revenue declined by 40% during the confinement period (in comparison to last year’s figures).
  • Many transport operations such as transport of automotive parts, clothing, flowers and construction materials have dramatically slowed to almost 100%.
  • Empty running increased by up to 40%.
  • New contracts have declined by 60-90%.

For passenger transport:

  • Tourist coach operations, long-distance international operations, and school and kindergarten transport is down 100%. Long-distance national lines declined by 90%, taxi services are down 80%, and special transport for municipalities (sick, elderly, etc.) are down 90%.
  • Revenue declined, on average, by 50-100% during the confinement period. This ranges from 50% for private operators who run public service contracts, for example, urban transit authorities, up to 100% for companies running scheduled intercity and international services, and tourist coach services.

This unprecedented dramatic situation has resulted in the deterioration of the liquidity and profitability of small and medium-sized enterprises, which make up 80% of the road transport industry, and which are especially at risk of bankruptcy within the next months.

As everything is interconnected by road transport and keeping in mind the gradual lifting of the confinement measures, IRU thus urges the UN to call on governments and international financial institutions to keep road transport operators in business and to allow road transport to drive global economic recovery from COVID-19 by implementing the industry’s “Driving the Recovery” plan.’

The letter then moves on to suggest specific short term schemes that will help to ensure that road transport can drive economic recovery:

Financial Measures

  • Provide direct cash grants to road transport companies, as a temporary aid, which can be phased out as the situation improves.
  • Facilitate access to loans for covering variable costs (such as ongoing operational needs), refinancing of pre-existing credits for asset purchases (e.g. vehicle leases), and facilitate credits for the renewal of fleets at low or 0% interest rates.
  • Facilitate delays to due dates for loan repayments and lease instalments.
  • Extend payment deadlines and/or temporarily reduce or waive taxes, charges and duties including corporate measures, social contributions and fuel tax.
  • Facilitate reduction of insurance premiums and waive premiums for non-operational vehicles due to halted goods and passenger services.
  • Set-up financial support programmes for temporarily unemployed road transport workers and facilitate reintegration back into the transport workforce of skilled people made unemployed due to the crisis.

Non-Financial Measures

  • Establish green lanes for trucks to be implemented at all borders, backed by policies and procedures that prevent additional and systematic stopping of trucks at all borders.
  • Prioritise collective passenger transport, particularly for workers, with appropriate health protective measures put in place.
  • Designate road transport workers as key workers, giving them priority access to proper protection, disinfection equipment and material, which have not yet been made sufficiently available by governments.
  • Allow for maximum flexibility on the interpretation of driving rules, driving restrictions and tolerance measures to prolong the validity of expired control documents including visas, certificates, and licences.

To view the full letter sent to the United Nations by the World Road Transport Organisation, click here.