#Covid19: Estimated 18% average decline in annual turnover for goods transported by road

Barcelona, September 24, 2020.- The global pandemic of the Coronavirus Covid19 remains, increases its expansion in many countries and does not have a near end. Its economic consequences are unprecedented in the last 100 years. However, we have to learn to live with this situation and conjuncture. The transport and logistics sector is one of the most important to keep us alive. The Freight News South Africa’s publication has highlighted some keys to the proper functioning of the global supply chain:

Globally, movement restrictions, health screening, and border controls and closures – put in place to ward off the virus that caused Covid-19 – had led to an estimated 18% average decline in annual turnover for goods transported by road, Hügel said

Unlike anything before it, the Covid-19 pandemic has underlined the importance of harmonising legislation governing the transport of goods across borders.

This was the message from all four speakers at the second webinar hosted by the Southern African Transport Conference (SATC) earlier this month. The webinar explored Covid-19’s impact on freight and logistics, and was addressed by Transnet group chief executive Portia Derby, TradeMark East Africa senior director of transport Abhishek Sharma, and International Road Transport Union senior advisors Jens Hügel and Kazeem Asayesh.

The view of every speaker was that harmonising the legislation that governs cross-border good transit would bolster economies by reducing transport and warehousing costs, and thus increase individual countries’ resilience in the face of economic crises.

Sub-Saharan Africa had taken several hard knocks due to the pandemic, which had caused significant supply chain disruptions that had led to shortages of vital commodities such as food and medicines, said Sharma.

“The sub-Saharan region is not the only one to feel the negative effects of the pandemic on freight and logistics,” said Hügel. The IRU is a global road transport organisation representing companies that provide transport, mobility and logistics services in more than 80 countries across the world.

Globally, movement restrictions, health screening, and border controls and closures – put in place to ward off the virus that caused Covid-19 – had led to an estimated 18% average decline in annual turnover for goods transported by road, Hügel said. The Asia-Pacific and Middle East-North Africa regions are the worst affected, with a 21% drop in turnover.

Harmonised legislation could reduce delays and save livelihoods, without endangering lives, he added. Instead, ever-changing and often conflicting health and safety rules at borders in the sub-Saharan region have led to heavy delays, especially at road borders. In turn, this has led to increased costs and supply shortages.

Hügel’s contention on harmonising cross-border legislation was supported by Sharma, who said increased health and safety requirements at borders, while critical, had led to significantly longer delays in cross-border trade in the East African region, and in its international trade. At Malaba, on Kenya’s border with Uganda, there was a 60% increase in transit times in April 2020, despite an average 50.4% decrease in import truck numbers and
an average 55.45% decrease in export truck numbers that month.

Sharma said the region stood to lose some of the impressive gains in GDP growth it had made since 2005. He warned that this momentum could be lost if the Covid-19 pandemic led to a long-term decline in GDP that in turn precipitated a decline in maintenance on infrastructure already in place, and to lower infrastructure investment in the future. “This is of concern as it is infrastructure investment that has led to the GDP growth,” he said.

Harmonising legislation could mitigate further decline by reducing delays, thereby improving competitiveness, he added. But there is hope. Already an agreement between Kenya and Uganda to accept each other’sCovid-19 test results has sped up transit times – a practical example of the positive effect
harmonisation can have.

Asayesh said there was no reason for any region to spend time coming up with rules for cross-border goods transit when there were existing UN rules used in 76 countries already – the United Nations Convention on International Transport of Goods Under Cover of Transports Internationaux Routiers Carnets (TIR).

The TIR, which requires no person-to-person contact or on-paper documentation, is the only global transit system that enables goods to be shipped from a country of origin, through transit countries, to a country of destination in sealed load compartments controlled by customs via a multilateral, mutually recognised system. The system used information technology tools and required only limited physical checks at borders, which reduced customs officials’ potential exposure to viruses, he said. “Using it smooths trade, and it would be a benefit to the sub-Saharan region.”

AndSoft, Transportation and Logistics Software

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