The impact of COVID-19 on freight transport has highlighted the interconnectedness of the global economy and revealed a number of underlying vulnerabilities in the global supply chain and transport of goods. While initial projections estimated substantial reductions in global freight transport volumes, data from the forthcoming 2021 Transport Outlook reveals a decrease of roughly 4% in total volumes between 2019 and 2020, attributable in part to a decrease in the consumption and trade of fossil fuels linked to reduced energy demand (World Economic Forum).
Overall, there has been an estimated 6.1% decrease in gross value added by the logistics industry, with some countries, such as Italy, experiencing declines of as much as 18% (Statistica). While initial projections were estimated substantial reductions in global freight transport volumes, data from the forthcoming 2021 Transport Outlook reveals a decrease of roughly 4% in total volumes between 2019 and 2020, attributable in part due to a decrease in the consumption and trade of fossil fuels linked to reduced energy demand (World Economic Forum).
Some sectors of the freight industry have been hit harder than others. For example, greatly reduced passenger air travel has caused significant capacity issues for the air freight industry. In the shipping industry, COVID-19 has created uneven demand trends across regions, created labor problems and congestion in ports, and skewed shipping container availability (Logistics Bureau).
Shifting demands, such as a dramatic increase in the need for medical supplies and an increase in e-commerce and home deliveries due to stay-at-home orders has put additional strains on the freight sector. Freight carriers have responded by using all available means to transport goods, including repurposing passenger aircraft for cargo, and switching to alternative modes of transport, such as rail, to avoid COVID-19 related delays to flights and shipping, when possible. In Bangladesh, the municipality of Singra re-purposed rickshaws to help deliver food and medicine to families in need (ICLEI).
Governments have also responded by designating ports, shipping, and trucking services as essential, exempting them from lockdown measures. Designated “green lanes” for road freight crossing country borders have also been established to keep supply chains intact in the EU, (European Commission) and workers in international freight transport have been exempted from entry prohibitions in many countries, including Angola, Turkmenistan and Uruguay. (ITF) Governments have also been required to work closely with third-party logistics companies to address supply chain bottlenecks and facilitate clearances. (IFC) Other restrictions on trucking operations have been relaxed, including limits on operation during weekends, public holidays, and at night, and restrictions on driving and rest times. (ITF)
Given shifting consumer demands and dramatic increases in-home deliveries, the pandemic has highlighted the importance of improving last-mile delivery. In some countries, such as Malaysia, governments are taking over the transport and distribution of products down the supply chain, ensuring in this case that farmers are able to get their crops to consumers.
COVID-19 is also accelerating existing trends in lower-carbon and automated delivery solutions, including the use of contactless autonomous delivery robots at universities and hospitals throughout North America; crowd shipping services emerging as a sustainable delivery alternative for congested megacities in Asia; and the wide-scale adoption of e-cargo bikes in Latin American and the Caribbean. (LEDS)
Overall, COVID-19 has highlighted the need to increase the resiliency of the freight industry through measures such as shortening of supply chains. It has also spurred a movement to accelerate digitisation of the supply chain, shifting from long-standing inefficient manual processes to more streamlined and transparent digital processes. (Ship Technology) These trends have the potential to greatly increase efficiency and reduce emissions long-term.
This section was developed by SLOCAT Partnership on Sustainable, Low Carbon Transport with contribution from International Transport Forum (ITF).