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‘Good commercial road transport services will drive economic recovery’

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A car plying the newly commissioned Oshodi-Abule Egba Bus Rapid Transit (BRT) lane in Lagos. PHOTO: AYODELE ADENIRAN

The Covid-19 pandemic and restrictions on movement, have had enormous impact on commercial road transport operators and those they serve, the International Road Transport Union (IRU) said.

IRU said Covid-19-linked disruptions in the global logistics chain would see a “dramatic” 18 per cent decline ­ valued at €551 billion in road freight transport turnover in the 2020 financial year.

This estimation is based on 78 major economies where the yearly turnover of road freight represents three per cent of nominal Gross Domestic Product (GDP).

Senior Adviser, IRU, Jens Hügel disclosed this at a transport webinar.

In Africa, excluding North Africa, the impact will be somewhat softened, to an 11 per cent drop in revenue at €6billion, said Hügel.

The most impacted regions are Asia-Pacific and Middle East-North Africa, with a 21 per cent drop in revenue.

Hügel said well-functioning commercial road transport services are fundamental to drive economic and social recovery during and after the pandemic.

“The introduction of restrictive measures has slowed down transportation across the globe with disruptions in the volume of operations due to movement restrictions, health screening and border controls and closures,” says Hügel.

“If you go one level down, to the road transport companies, you see that the revenue decline is, on average, 40 per cent,” he adds.

For many transport operations, such as companies involved in the transport of automotive parts, clothing, flowers and construction materials, there has been a complete standstill, Hügel noted.

Empty running has increased by up to 40 per cent, with new transport contracts declining by between 60 per cent and 90 per cent, which is “really worrying, so the outlook is really grim.”

Passenger transport revenue during lockdown periods has also declined, on average, by between 50% and 100%, with up to a 100 per cent drop for companies running international services and tourist coach services.

“Micro, small and medium-sized enterprises, which make up more than 80% of the transport industry, are on the brink of going bankrupt,” said Hügel.

“This is exacerbated by the fact that countries are actually not coordinating their (COVID-19) measures, so it is really difficult for transporters to plan their operations.”

In the IRU’s recovery plan, the union suggests that road transport companies receive an array of financial grants and loans, including the refinancing of existing credit, especially vehicle loans, at low or zero per cent interest rates.

Payment deadlines should also be extended, while the temporary waiving of taxes, user charges and duties, including corporate taxes and fuel tax, should also be considered.

Insurance premiums can also be reduced, or waived for non-operational vehicles.

“Financial support programmes should also be set up for temporarily unemployed road transport workers,” said Hügel.

Nonfinancial interventions include the establishment of quick-moving, green lanes for trucks at all borders, backed by policies and procedures that prevent the systematic stopping of trucks at borders.

“Also, allow for the 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.”

The IRU described itself as the global voice of companies providing commercial road transport, mobility and logistics services. The union has more than 160 members, such as Scania and Iveco, in more than 80 countries, with 60% of its membership in the logistics and 40% in the mobility sector.

The IRU said it aims to facilitate trade, the mobility of people, sustainable road transport and the safety of goods and people travelling by road. In Africa, its aim is to support governments and the private sector to reduce the cost of trade.


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