COVID-19 and the road transport sector
IRU has a global network of members in the road transport sector, with whom we have been in close contact throughout the pandemic to build a picture of its financial and operational impact. We can confirm that the global economic slowdown caused by the pandemic has greatly affected the road transport industry. In addition, the transport restrictions put in place by governments to control the spread of the virus have disrupted mobility networks and supply chains. According to IRU research, global goods transport losses are expected to exceed USD 679 billion in 2020, a turnover loss of 18% in comparison to 2019 (IRU, 2021).
Commercial road transport operators have maintained services where possible, despite an often higher cost base due to transport, routing and delivery restrictions. Many road transport businesses have managed to survive up to now, but anecdotal evidence from IRU members and research from our market intelligence team indicates that they will not survive much longer without financial assistance. Following this concerning discovery, IRU assessed two key sets of financial indicators that provide an early warning on the risk of business default and insolvency. Both point to an approaching wave of bankruptcies in the road transport sector over the coming year (IRU, 2021), which would have a devastating effect on global supply chains and trade networks. Road transport operators in all regions, including the Western Mediterranean, are facing a high or very high risk of defaulting on loans. This would lead to a deterioration in their creditworthiness, which in turn would increase their cost of borrowing, particularly for vehicles.
In spite of a bleak outlook for road transport companies, governments have failed to act. While many administrations have implemented support measures for businesses, IRU analysis of government measures in 79 countries, including France, Italy, Malta, Morocco, Portugal, Spain and Tunisia, revealed that very few transport operators benefitted. This lack of action shows the extent to which the importance of the road transport sector is underestimated. However, without it we would not have the essential goods and services we need to survive. Over 80% of commercial land transport of mobility and logistics services (in tonne-kilometres and passenger-kilometres) are provided by the road transport industry.