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Understanding COVID-19’s Impact on the Transport Industry

5 minutes
Peter Mohring Serco's Associate
No longer can we freely move people across cities, countries and continents due to the travel restrictions put in place to combat the virus.

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.

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.

The Impact

No longer can we freely move people across cities, countries and continents due to the travel restrictions put in place to combat the virus. 

Private and Public services
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.

Aligning Strategies

Private companies and regional governments have aligned their strategies in this critical time to deliver an unprecedented response to the global medical emergency including a record number of infection tests, screenings, temporary quarantine centres and medical facilities as well as limitation of travel whilst providing support to those unable to return home. This same level of commitment in response must continue in the thought processes and proactive development of operational initiatives and solutions that will help shape land, sea and air travel after the impact of the pandemic begins to subside.

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. 

Dubai metro

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.

 

Serco's Associate Peter Mohring

Mohring, Serco's associate,is responsible for delivering excellent service performance to existing customers, optimising organic growth opportunities through related diversification and delivering new business wins aligned with both the growth aspirations of the sector across our chosen markets in the Middle East.
Peter Mohring