COVID-19 flipped the world on its head. Due to the threat of further spreading the virus, the world had to screech to a halt. This means that travel by land, sea, and air had to be heavily reduced.
So much so that the Pew Research Center has found that 91% of the world’s population lived under restricted travel restrictions during the peak of the pandemic. And while the numbers by themselves are staggering, restricted travel had dire real-world consequences as well.
The commercial transportation industry is one industry that was hit hard by COVID-19. Truck drivers, in particular, took the brunt of the pandemic and made what was already a difficult job much harder due to the health and logistics issues caused by the spread of the virus.
But how exactly did the pandemic alter commercial transportation and trading? To help you further understand the effects of the pandemic, we’ll be breaking down the immediate impact of the virus on this industry.
Impact of the Pandemic on Trading
While the pandemic shifted millions of people to remote working operations, this just wasn’t an option for people that worked in commercial trading. Truck drivers had to operate under strict travel restrictions, which not only made their jobs harder but also affected our supply chains.
Decline in Revenue
The trucking industry has taken a significant hit in recent months. Truck operators from all over the world have suffered massive losses. In fact, the International Road Transport Union highlights how new freight contracts have dipped by 60% to 90% due to COVID-19.
Transport Topics details that while the pandemic was originally a health crisis, it soon morphed into an economic crisis. The pandemic has had dire effects on both trucking companies and their drivers as it has caused massive losses across the board.
Due to the significant losses, many major trucking companies have been forced to either shut down or reduce their workforce. In fact, at least 88,000 truckers lost their jobs back in April alone due to many businesses closing down.
Crippled Supply Chains
Supply chains have also suffered greatly during the pandemic. Now, one obvious reason for this is the strict travel restrictions that were put in place to help curb the spread of the virus.
And while the trucking industry was exempt from the stay-at-home orders, the restrictions slowed down the entire process due to reduced on-site personnel for social distancing purposes. For an industry that thrives on precise scheduling, these delays were surely a logistical nightmare.
Another reason for the crippled supply chains was the sudden increase in demand for certain products. Things like disinfectant products, medical supplies, and other goods associated with the rise of the virus were now in high demand.
This had manufacturers scrambling to meet this demand, which in turn forced truck drivers to keep up with the changes as well. The erratic behavior of the market goes both ways.
The Wall Street Journal details how the pandemic has also caused a massive overcapacity, as trucking companies were moving only half of the number of products that they used to move.
Truck Drivers at Risk
Indeed, truck drivers have had it particularly rough over the last year. Truck drivers continue to play a vital role, as they transport essential goods like medical supplies and groceries. This is why it’s particularly disheartening that they are also one of the groups that are most vulnerable to the virus.
Truck drivers are required to go from city to city to transport goods of all kinds. This puts them at significant risk of contracting the virus. This issue is amplified by the fact that 38% of truck drivers do not have health insurance.
The lack of parking spots also put truck drivers at risk. 75% of US truck drivers have a problem with parking shortages. The Center for Disease Control and Prevention highlights the importance of social distancing, so crowded parking and truck spots could be potentially hazardous.
Impact of the Pandemic on Commercial Transportation
Commercial transportation also took a pretty big hit due to the multiple lockdowns brought about by the pandemic. Indeed, both the reduced ridership and restricted movement significantly hampered the commercial transportation sector.
Weakened Public Transportation
Considering the travel restrictions and stay-at-home orders, public transportation was bound to take a hit. The pandemic has caused a massive drop in ridership in many major cities in the country.
Bus ridership in New York City was down 15%, even during the early stages of the pandemic. This makes sense as New York is one of the hardest-hit cities in the United States as it was the fourth state to record 1 million cases.
The decline in ridership is present across the country. So much so that the American Public Transportation Association called on Congress to provide $16 billion in emergency funds to help support the country’s public transportation system.
Decline in Ride-sharing
Ride-sharing was also no spared from the effects of the pandemic as the ride-sharing industry also faced a steep decline in ridership. What makes this problem worse is that a survey revealed that 39% of people won’t use ride-sharing services even when the pandemic eventually ends.
This means that ride-sharing services will need to cover a lot of ground when it comes to getting back their customers in a post-COVID world. This should lead to stricter hygiene and cleaning regulations to help ease the worries of their customer base.
Incorporating Contactless Payment Technology
The reduced ridership has encouraged innovation. One way this has manifested is through contactless payment technology for transit fares. By reducing the points of contact, individuals are less likely to contract the virus.
Monterey-Salinas Transit has put together a contactless payment system that lets riders use smart cards and phones to pay for their rides. While this was developed as a countermeasure to deter the spread of the virus, this is something that looks like it’ll stick around for the foreseeable future.
How COVID-19 Will Change Commercial Transport and Trading
Innovation and development tend to come about in times of difficulty. The pandemic is no different, as it may have set up lasting and impactful changes in the different industries that it has affected.
Aside from the immediate effects that the pandemic has had on both commercial transport and trading, it’s also managed to impart long-term changes that may change these industries forever. Here are a few long-term changes associated with the fallout of the COVID-19 pandemic.
Rise of Self-driving Trucks
Some companies have responded to the challenges that the trucking industry has faced over the last year by making use of self-driving trucks. This may just be the solution to the supply chain issues mentioned above, as it allows for more efficient deliveries without exhausting manpower.
Locomotion, an autonomous convoying startup, managed to use two human-guided self-driving trucks to deliver 40,000 pounds of food. The trucks delivered food from the Greater Pittsburgh Community Food Bank all the way to Ohio.
While this was merely a test drive, the mere fact that they were able to successfully deliver goods from across multiple states is indicative of where we are when it comes to autonomous vehicle technology.
One of the reasons why the world was devastated by the pandemic is the lack of preparation. This will surely change in a post-COVID world as people will do everything they can to be ready for events like this.
Even with the development of a vaccine, people should expect enhanced health and sanitary protocols in different industries. This is especially true for public transportation, as they’ll need to bounce back from the pandemic.
Another way this may manifest is through the rise of commercial truck insurance. As stated above, a huge chunk of the country’s truck drivers is underinsured. This left them without protection if they happened to contract the virus.
Considering how the pandemic affected many truck drivers over the past year, it would be safe to assume that more people will invest in preparing for such events moving forward.
If you’re looking for more information on the different forms of insurance, Assured Standard is a helpful source of information.
More Electric Vehicles
Electric vehicles have been on the rise in recent years. However, the pandemic gave the global electric vehicle industry a boost. This is especially true in China and Europe as they committed to this innovation via financial stimuli and added infrastructure spending.
And while the United States has yet to invest in electric vehicles as much as other countries, it’s safe to assume that electric vehicles are no longer a trend that can just be ignored. Expect more electric vehicle adoption in the coming years, as the technology will just continually improve.
We hope this helped you understand the immediate and long-term effects that the pandemic has had on trading and transportation. If we missed anything or if you have things you want to add regarding this topic, leave a comment below!