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The global road freight industry could be looking at an accumulated loss nearing $1trn as a result of the coronavirus outbreak, the International Road Transport Union (IRU) has warned.
“On the basis of the significant fall in intercontinental container shipments, IRU estimates a decline in global road transport activity of up to 20% in 2020, depending on how long the situation continues.
“This could lead to a global loss in operator revenues of $800bn,” it said in a statement, revising an earlier figure that estimated losses could top $1trn.
The organisation added that the situation had become confused, due to “rules and restrictions changing rapidly and often in a haphazard or uncoordinated way”.
That has become particularly true in Europe, where countries have begun to close land borders, with cross-border movements of road freight at risk.
The fear of both trucking companies and many of their customers is that, with thin margins and low capital reserves, many road transport operators could go to the wall in a comparatively short space of time.
“Nearly 6% of all people in employment worldwide work in road transport – largely in small and medium-sized firms that, due to their size, cannot easily cope with external shocks such as the economic impacts of Covid-19.
“The economic burden is high, and growing, on both workers and the owners of firms. They are doing their best to stay afloat, however functioning supply chains and the mobility of essential workers depend on them remaining in business,” the IRU explained.
According to the EU Observer, as of yesterday, nine EU countries had closed their land borders: Czech Republic, Cyprus, Denmark, Hungary, Latvia, Lithuania, Poland, Slovakia and Spain.
And they appear to have been joined by Germany and Estonia this morning, according to the BBC and Euractive respectively.
One of the first countries to close its land borders was the Czech Republic, although, according to the Czech association of road transport users (CESMAD), the movement of goods was still allowed.
“Operation of international road haulage remains without restrictions but there are measures to be applied by drivers of the international road haulage.
“In particular, drivers in international transport are advised to protect themselves when loading/unloading and to limit contact with other people,” it told The Loadstar.
However, the situation was markedly different in nearby Hungary, which has reportedly closed its borders to all road traffic, including trucks, leading Italy’s Minister of Infrastructure and Transport, Paola De Micheli, to telephone her Hungarian counterpart, László Palkovics, to request the withdrawal of the blockade at the border of the entry of drivers of trucks in transit or arrival in the country.
“As part of a coordinated action with the Ministry of Foreign Affairs and with the other ministries concerned, the minister asked to ensure the restoration of the regular flow of Italian goods to the markets of Central and Eastern Europe and the Balkans and to return to normal border between Italy and Slovenia.
“In recent days, similar talks with the same requests from Italy have been the subject of another call between Minister De Micheli and the Slovenian Minister of Infrastructure and Transport, Jernej Vrtovec,” a statement from Italy’s transport and infrastructure ministry said.
Yesterday the European Commission issued new guidelines to member states to try and ensure European freight movements continue unimpeded, as it was “particularly crucial for essential goods such as food supplies including livestock, vital medical and protective equipment and supplies”, and that “member states should designate priority lanes for freight transport (eg, via ‘green lanes’)”.
EC president Ursula von der Leyen said: “Our measures to contain the coronavirus outbreak will be effective only if we coordinate on the European level. We have to take exceptional measures to protect the health of our citizens.
“But let’s make sure goods and essential services continue to flow in our internal market. This is the only way to prevent shortages of medical equipment or food. It’s not only an economic issue, our single market is a key instrument of European solidarity.