Breath of fresh air in the transport industry?

The year 2020 took its toll on us. Both transport companies and the economy as a whole have been hit hard by the effects of the pandemic. However, the first data for 2021 shows that we have a chance for a significant improvement in the situation.

The year 2020 took its toll on us. Both transport companies and the economy as a whole have been hit hard by the effects of the pandemic. However, the first data for 2021 shows that we have a chance for a significant improvement in the situation.

What was 2020 like?

The first months of the year are the time for summaries and drawing conclusions from the previous financial year. All market participants are waiting for financial statements, statistical results and forecasts. The first months of the year always cause a lot of emotions and generate a lot of questions among entrepreneurs. The year 2020 was perverse and it was difficult to predict what would happen in a week or month, not to mention its summary and further forecasts. Many entrepreneurs experienced a difficult period, the predictions for many were far from optimistic. There was talk of a huge economic crisis that will be felt in almost every industry. So what is the situation in the transport industry?

The transport industry started very optimistically in January 2020. You could read about the increase in results compared to previous years. Unfortunately, the enthusiasm of many disappeared in March. Information about the spreading epidemic, increasing restrictions and new regulations made entrepreneurs very worried about their companies. The significant decrease in turnover on the market also affected transport.
Passenger transport almost froze. The numbers of carried passengers were very small. Many carriers have decided to switch from passenger to freight. It was most visible in air transport. The closing of the borders, limiting the possibility of gathering and movement of people forced the airlines to change. Instead of transporting passengers, there were medical supplies and other goods on board. Enterprises that decided to quickly change the transported assortment could, at least for some time, secure the means to survive such a difficult period.

The situation in land transport was slightly different. Despite continued uncertainty and new ideas to stop the spread of the virus, all countries realized that the transport of goods could not be stopped completely. Such a decision would stop the flow of supply chains and also make it impossible to fight the virus. It is difficult to survive with a complete closure of borders in the era of globalization. However, at critical moments, some countries opted for such a solution, or a significant reduction in exports and imports of cargo, which obviously affected the entire transport industry. An example is Italy, where some provinces have been completely closed to transport other than “urgent service requirements and emergencies”. In particular, the first half of 2020 was a difficult period due to numerous complications, quarantine, and thus fewer employees, suspension of activities and other related difficulties. On the other hand, some countries, in order to facilitate the work of drivers, have decided not to punish drivers for violating working hours. These included Spain, Belgium and Norway.
Certainly, the pandemic had a big impact on the road transport of passengers but also goods. There were huge lines at the borders due to the need for testing or increased checks, resulting in long delays in deliveries. Some companies have decided to switch from road to rail transport. The rates for transport services have also increased significantly. 2020 was undoubtedly a breakthrough and difficult time for the transport industry.

Signs of change in 2021

Currently, when looking at the first statistics of 2021, we can talk about signs that inspire optimism. On the example of the data of the Federal Road Transport Authority in Germany (BAG) on the movement of trucks on German roads, January 2021 was 1.3% better than January 2020. This indicator concerned the number of kilometers that trucks traveled on German roads. In addition, the figures presented in January 2021 are 2.2% higher than the monthly average for the entire period from March 2019 to February 2020. It can be seen that these results have not only returned to those from before the pandemic, but even surpassed them.
You might wonder where these numbers come from? Many factors contributed to this, including lockdown and bringing life online. Many companies have decided to work remotely, some brands have decided to sell online due to the lack of the possibility of stationary sales. It all boils down to increasing the demand for the transport of goods. Moreover, research and the production of vaccines have also added value to shipping goods.
For comparison, it is worth paying attention to the situation in sea transport. Unfortunately, the first quarters were usually not the best period for this type of transport, so the annual results are not as optimistic as in road transport. Nevertheless, the forecasts for 2021 are not pessimistic. Using the example of western US ports, the figures are as follows: from January to September, the volume decreased by 4.4%. These values were therefore not better than in 2019, but it was not as low as predicted at the beginning of the pandemic.

When reviewing the forecasts for 2021 for maritime transport, it is difficult to make clear indications. High hopes are placed on the coronavirus vaccination, which is to enable a return to “the old reality”. But is it really a good sign for the transport industry? Not necessarily. Currently, transport is essential, especially road transport, which can be seen in the values and the aforementioned results. In the case of maritime transport, the situation is slightly different. According to BIMCO (Baltic and International Shipping Council) expert Peter Sand (BIMCO’s Chief Transport Analyst): “Many of the goods that have already been transported to the US and Europe and will end up there are durable goods. It is rather unlikely that these things will be bought quickly a second time “.
In his opinion, the demand for services, which is currently suppressed, will explode twice in 2021. This may mean that a little less of the planned budget will be allocated to the purchase of products, and this will have a negative impact on container transport.
In conclusion, the situation in 2021 showed that you cannot be sure of anything and that the forecasts are only assumptions that should not be taken for granted. Moreover, a situation that will herald a crisis for some may be an opportunity for development for others. Nevertheless, we should be on full alert and not slow down, so as not to miss our “5 minutes”.

Author: Lidia Kałamacka