Understanding COVID-19’s Impact on the Transport Industry
The result is a dramatic decrease in transportation revenue that is causing a range of issues in both the short and long term, from pay decreases and redundancies to closures of long-standing businesses that can’t maintain liquidity through an extended period of inoperability.
COVID-19 has presented unparalleled challenges to all businesses across the globe, but perhaps one of the most affected are those within the transport industry.
No longer can we freely move people across cities, countries and continents due to the travel restrictions put in place to combat the virus.
Transport operators must at the very minimum consider the following initial changes to their operating and commercial models in order to support their clients to adapt quickly and efficiently to a new, infection-conscious way of providing a positive and efficient journey to customers.
Fixed-cost pricing models need to transform into variable cost contracts with suppliers in order to support a relatively unquantifiable phased return to a ‘normal’ number of passenger traffic.
Liquidity is one of the key issues around finances for transport organisations. Suppliers, providers and internal costs will need to be adjusted from a commercial and payment terms perspective.
The new world will require a build-up of confidence in customers safety as well as new ways of travelling during the re-opening stages and after the crisis. This will require companies to invest in understanding their customer’s journeys. Back-burner programmes and delayed projects will need to be accelerated, cancelled or re-evaluated against the new state of play globally.