How Covid-19 affected the transportation industry and the future impacts it will have on the transportation industry

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Covid-19 impact and challenges in transportation draft

Background of COVID-19

Coronavirus is an infectious disease caused by acute respiratory syndrome, SARS-COV-2. COVID-19 pandemic is a serious global health threat that has affected millions and turned our world upside down. It has altered our world and now we are dealing with unforeseen challenges caused by this pandemic. As the world struggles with the human and economic crisis, our supply chains are finding themselves experience different challenges of their own. The pandemic has had and currently is having a huge impact on the exchange of goods throughout the world. It is said that COVID-19 might have been the biggest disruption to supply chains that the world has ever seen. The supply shock that started in China and the supply chain vulnerability that it caused all over the world as businesses are making rapid decisions and taking immediate actions to maintain their businesses to support customers. So many companies rely on production and supplies in China, Asia etc. Now, let us focus on how the pandemic affected our transportation industry and the future challenges to come.

Why our transportation industry is important

The transportation industry is an important industry sector in the economy that involves the collection of modes in which goods or people are moved from place to place, facilitating trade between different people. Transportation and mobility are critical to the region’s economy. Governmental restrictions aspiring to slow down the spread of the pandemic lead to impairments for economic operations which impacted transportation networks comprising the maritime, rail, air, and trucking industries. (Loske,2020). Now our travel industry is under pressure to rebuild itself so the world can get back to normal.

How it affected public transport

First, traveling in the U.S took a sharp turn due to the public health emergency. Massive restrictions had been enforced on our public transportation to limit the spread of the virus and maintain the safety of our workers and people. This has triggered a crisis for public transport and the less people means less fare revenue creating a budget crisis. According to the latest census data prior to the pandemic, about 5 percent of all U.S commuters use public transportation, but in major cities that number jumps to 10 percent. (Tan, Flowers, Keating et al.) People no longer felt comfortable with the idea of commuting to work via public transport. Ridership on our bus and train services has taken the biggest hit withing our different modes of transport. There has been drops of ridership due to people working remotely, due to less hours of operation and shutdowns from different public transport systems and most importantly the fear of individuals exposing themselves to the virus due to issues like sanitation and overcrowding. A crucial population of people depend on public transportation and with restrictions enforced on our public transport system due to the pandemic, it has severely threatened their financial stability.

Aviation Industry

Air cargo is important for the smooth operations of global supply chains. Our airline industry provides the only worldwide transportation network which makes it significant for global business and tourism. Airports must meet their capital expenses by high fixed costs necessary for maintaining and operating the infrastructure components of the airport including runways, taxiways, aprons, parking stands and terminal buildings. (Gittens,2020). Our aviation industry faced a lot of crises such as 9/11, SARS and the Great Recession. (Galpin, Ozores & Burroughs,2020). Our aviation industry was one of the first industries that was affected from the COVID-19 pandemic because the disease is easily passed among people. It was affected all over the globe mainly in North America, Europe, and Asia-Pacific. (Maneenop & Kotcharin 2020). The key factors which were travel restrictions, especially the decline in tours and travels as a large number of international and domestic flights got canceled, changed behavior of passengers and fear of travel resulted in a dramatic drop in demand for airline services.  COVID-19 resulted in significant reduction in passengers due to canceled flights, empty planes operating which then followed massive, reduced revenues for airlines. Then followed airlines forced to lay off employees or declare bankruptcy. The weekly number of international flights declined by 46.4 percent during the week of March,23 2020 compared to March 25,2019. (Mazareanu,2020). The year-on year change in the number of scheduled flights declined by 69.9 percent during the week of May 4,2020 compared to May,6 2019. (Mazareanu,2020). Our airline industry became so crippled by the loss of traffic and revenues because of COVID-19, it was said that some airlines have attempted to avoid refunding cancelled trips to decrease losses. Key airline companies that got affected globally included American Airlines, China Eastern Airlines, Boeing, Delta Air Lines and many more. According to the US Travel Association, there has been a loss of 5.9 million travel-related jobs resulting in a $910 billion hit to the local economy. And according to the IATA (International Air Transport Association) analysis of passenger revenue, there has been a prediction of $252 billion loss. Now our airlines are seeking bailout funds from the government to recover from the hard-hit it took from the pandemic.

Road Transport

Road transport is essential to social and economic development and guarantees mobility across jurisdictions and countries. Countries around the world placed restrictions on domestic transit and closed borders for road freight transport services. Large industries like our trucking and transport sector of the supply chain got affected by this pandemic.  While our trucks have moved a large amount of important goods, freight traffic has taken a hit. There has been a truck freight slowdown from trucking operations which includes deliveries, travel times, etc… Truck drivers experienced longer wait times at delivery and pick up points due to decrease on-site personnel and busier receiving schedules. (Salzer, 2020). According to the American Trucking Associations index which tracks the amount of freight, in May 2020 the amount of freight declined by 10% in comparison to 2019. Even individuals commuting for work or personal trips has also played a role in the steep drop in traffic due to the work from home and shelter in home restrictions. This resulted in lot less fuel, paid parking, tolls, and lesser fines. These funds pay for expansion, maintenance and road repair which is critical for our transportation industry.

Maritime Transport

As 80% of trade is carried by sea, it is evident that disruptions to sea transport can damage trade flows and disrupt supply chains. (Heiland & Moe,2020). COVID-19 has triggered an economic crisis for our maritime transport and trade. Our developing countries play a large role in global maritime transport and trade. Restrictions applied to our maritime transport has resulted in disruptions affecting ports, shipping, and supply chains. The challenges COVID-19 created for our ocean transport was raw material shortages, lead time issues, ocean blank sailings, port closures, reduced working hours at ports, equipment and labor shortages and truck/transport capacity constraints. According to an article in American Shipper, there was a turnaround time on ocean exports from China after ocean carriers had initiated about 111 blank sailings which would have normally been shipped but were not. (Anonymous,2020).   According to UNCTAD(United Nations Conference on Trade and Development), global merchandise trade has fallen by 5 per cent in the first quarter of 2020, and expects a deeper contraction of 27 percent in the second quarter.

References:

IGC. (2020, August 6). Impact of COVID-19 on public transport. https://www.theigc.org/blog/impact-of-covid-19-on-public-transport/

The Impact of the Coronavirus on the Transportation Industry. (2020, March 13). https://www.fwf.com/2020/03/13/the-impact-of-the-coronavirus-on-the-transportation-industry/

Rumore. (2020, September 23). Empty roads, trains, buses and airports: How COVID-19 and staying at home changed how Chicago gets around. https://www.chicagotribune.com/coronavirus/ct-viz-chicago-coronavirus-transportation-changes-20200923-3kg2whspebhuzaz7l4umheikue-htmlstory.html

IEA (2020), Changes in transport behaviour during the Covid-19 crisis, IEA, Paris https://www.iea.org/articles/changes-in-transport-behaviour-during-the-covid-19-crisis