Ecomotive - Archive

Road transport: details of a global meltdown

Paolo Castiglia

The crisis sweeping through the entire automotive industry is having, as expected, an adverse effect on the supply chain, as discussed in previous articles. And now, new figures involving the freight transport sectors, reveal a loss of 550 billion euro at global level. "Road transport services are vital for economies and communities all over the world," said Umberto de Pretto, Iru's Secretary General. "These are alarming figures indeed. Every single road transport operator forced out of business will have an impact on the movement of both people and goods". A new study, by the Iru research institute, shows that over 3.5 million road transport operators around the world are facing unprecedented financial losses due to travelling restrictions and the general economic recession caused by the global pandemic. Global freight transport companies expect an average drop in turnover in the region of 18% in 2020, totalling 551 billion euro.

Significant is the impact in the Middle East, North Africa (-22%) and Asia (-21%); in Europe the drop amounts to 64 billion euro (-17%). While companies in Argentina, China and Iran recorded a drop of over 30%. Both freight and passenger transport companies reported that restrictions superseded aids or support measures during the worst period of the lockdown, with an additional impact on the sector. Recovery measures are therefore needed. The Iru published a 10-point recovery plan with financial and non-financial measures in which governments and banks are called upon to support road haulage operators in difficulty, facilitate the movement of people and goods and promote global recovery, but very little, and in some cases nothing at all, has happened since then. "We have seen many governments adjust regulations and announce recovery packages, but in general, the details involving road transport operators are quite vague," said Umberto de Pretto.

The severe crisis caused by the Covid19 emergency, however, is forcing the sector to consider a new business model, seeing the great impetus the crisis has given to e-commerce channels and consequently to a large part of transport and logistics organizations. The large groups managing the web at a global level, kicked into action to promote what is emerging as a great trade revolution destined to affect the entire transport chain inextricably linked to it.

Here are some practical examples: Microsoft and FedEx have announced a strategic partnership to develop freight transport and logistics IT solutions. This alliance stems from the need to rationalize transport and combine digital logistic systems with “intelligent” software capable of promoting and improving deliveries thanks to the combination of innovative technologies with an efficient and organized distribution network. According to the two giants, it is possible to make transport and shipping simpler.  On the one hand FedEx, leader in the transport sector, and on the other hand Microsoft, have decided to combine a global digital and logistics network (FedEx) with the power of Microsoft's smart cloud. And, speaking of giants, Amazon - a multinational company now involved not only in e-commerce but also in a myriad of other sectors including entertainment - confirmed the opening of a new strategic logistic facility in Genoa, which will become operational next autumn. The warehouse covers 7 thousand square metres of space and was built in the Campi area. The distribution giant led by Bezos intends to create about thirty permanent jobs. The head of Amazon Logistics in Italy, Gabriele Sigismondi, explained that "at the moment we consider the announcement of a new sorting depot in Genoa even more important than usual, as this will guarantee customers a more efficient service". Many things are happening in the sector, even in privileged areas of distribution: for example, a multinational freight forwarding company such as Kuehne+Nagel recently inaugurated a platform dedicated to wine logistics in Verona, the location of a well-known world-class trade fair.

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