COVID-19 Outbreak and the Transportation Industry – Effects, Challenges and Prospects

By:
Oladimeji Shotunde,
Lagos, Nigeria.


PREAMBLE

Quite topical is the theme of this essay, at a time when Nigeria and the rest of the world grapple with hydra-headed challenges, occasioned by the novel Coronavirus Disease 2019 (COVID-19). The COVID-19 pandemic has posed grave danger to the global economy, with experts positing that the pandemic has instigated an economic downturn, the likes of which the world has not experienced since the Great Depression of 1929. Precipitated by this health emergency, the International Monetary Fund (IMF), in its April, 2020, World Economic Outlook report titled “The Great Lockdown” projected a sharp contraction in global economy by 3% in 2020, a condition that will dwarf what was recorded during the 2008–09 financial crisis.

Unemployment is sky-rocketing, with millions filing for unemployment claims in the United States of America (more than 22 million since President Donald Trump declared a national emergency for COVID-19). And to further worsen the situation for some countries (Nigeria as an example), the recent crash in oil prices (with OPEC basket which fell from $67.93 as of 19 December, 2019 to $12.41 per barrel as of 28 April , 2020, a decline of about 81.73%), amongst other sad economic realities, have all conspired to paint a grim picture about the future of all sectors of the world economy, to which transportation is critically central.

The transportation industries across countries would certainly not be left out in this global meltdown. It might turn out that the industry would be among the “worst hit” sectors, when the dusts are finally settled, considering the fact the industries lubricate the engines of economies. The metaphor of “blood” and “human system” (transportation industry is the former while economy is the latter), perhaps, analogically, conveys this relationship better, presupposing that the importance of transportation cannot in anyway be downplayed. To bring it home, the situation is understandably not different in Nigeria. To lockdown a sector, albeit partial in some sense, whose GDP grew by N13.3 billion between the third and fourth quarter of 2019 from N261.8 billion (Trading Economics, 2020) bode ill for the growth prospect of the country. It would, therefore, not be unexpected to see a sector that has been contributing phenomenally to the nation’s GDP, although with undulating growth trajectories since June 2017, experience a tragic decline in performance. During the pandemic-induced lockdown, we have come to realise just how pivotal it is, to have seamless movements of goods within the country.

No doubt, the citizens require steady and uninterrupted supply of necessaries, special mention of which are – food, medical supplies, emergency goods, amongst others; however, the supply of these necessaries has been largely hindered by restrictions placed on movements (vehicular and human), and this has resulted in a direct negative impact on the Nigerian transportation industry in its entirety. I am not under illusion to know that the pandemic will have far-reaching adverse consequences which are felt in every nook and crannies of the nation. This is because; the private, public, maritime and rail transport were all grounded. Of particular note is that any spike in the number of confirmed cases was always accompanied by a drastic decline in patronage of the offerings of the industry, and thus, resulting to a large fall in revenue for industry players.

There are some other not-too-pronounced harmful effects that the COVID-19 pandemic has had on the transportation industry, one of which is the impairment of assets and equipment. Mechanical devices such as motors and engines were built primarily to operate and thrive in motion. Therefore, any form of inactivity, especially for a long time, might hamper their effectiveness. Looking at the medium to long term, the transportation industry should be prepared for what would seem like a paradigm shift in the ways things operate, especially when you consider the phenomenon of “Work From Home” (WFH) which is fast gaining traction. How effective this will be remains to be seen? As this poser agitates our minds, I will be quick to posit that the transportation industry should brace up for a really tough time in the months ahead.


THE CRUX

It is important to identify the major issues that “are posing and would pose” as challenges to the Nigerian transportation industry; coming as an offshoot of the COVID-19 outbreak, and how these challenges could best be handled. We cannot holistically proffer solutions and evaluate prospects without torch-lighting these challenges. The pandemic has brought about in novel challenges for the Nigerian transportation industry to address.

First, there is the need to appreciate the development witnessed in the transportation industry, specifically from year 2016 till date. The sector has witnessed a huge turnaround, specifically in the areas of modernisation of our railway systems and securing our waterways. Further, the repositioning of key agencies by the present Minister, to a large extent, contributed to the successes recorded by the industry in recent times. Although, there are some areas in which more could have been done, and inefficiencies were encountered; however, that cannot be exhausted on this platform.

The pandemic has constituted a huge setback to the progress made in the industry thus far, as stringent measures have been taken towards containing the spread of the virus. Lockdown measures directly affected the transportation sector, thus restricting the movement of people and even goods, with exemptions given to essential items. The shutdown of train operations by the Nigerian Railway Service has affected the revenue generated by the government through that avenue. This development is not too good for a sub-sector that is gradually becoming acknowledged. Road operations have also been barred, especially in Lagos (regarded as the economic hub of Nigeria and even West Africa), Abuja, Ogun and other states – of which it has in some ways, stalled the progress made in the road sub-sector, particularly revenue generated from public transports. Interstate travel ban has further aggravated the problem. Same can be said of the maritime sub-sector, whose operations were largely grounded. No thanks to the COVID-19 outbreak.


PRESCRIPTION AND PROSPECTS

Despite the obvious bottlenecks encountered prior to this time, and the ones occasioned by the COVID-19, bright prospects abound. The pandemic presented a platform to actually discover and unlock a lot of opportunities that would aid the reform and modernization of the sector. Let us be clear - transforming the transportation sector would be an arduous task; however, in the face of so many difficulties, we must find a way forward.

To start with, the pandemic laid credence on the need to adopt Mobility-as-a-Service (MaaS) in the transportation industry. MaaS is a range of ideas that aims to make transportation more efficient and convenient, via end-to-end digital solutions. MaaS integrates all stages of a commuter’s journey, ranging from trip planning, booking, e-tickets, and payments; thus, infusing them into one application. This approach allows for digitalizing the industry with attendants benefits such as reducing congestion, optimizing the maintenance of transport systems, increase in transport data – all of which allows for the modernization of the industry. Closely linked to the MaaS is the Mobility Service Providers (MSPs), which enabled contact-less deliveries, payments and protected rides that guarantee public safety and the continuous movement of people and goods. By so doing, revenue will be generated through official channels and efficiency will be achieved.

Second, the pandemic further exposed the need to restructure and reposition the transportation industry in its entirety. It gave reasons to rethink on how best the industry could contribute to addressing climate change, by reducing congestions across all transportation media. Recent reports have it that the pandemic allowed for an improvement in climatic conditions, due to clean air and decongestions - and this is one area the industry can key into, by adopting initiatives such as the MaaS or MSPs, earlier discussed in this essay. Certainly, modern policies, especially those that are Nigerian-oriented need to be enacted to achieve this, while also not failing to put the industry at an advantage. The industry will, no doubt, be overwhelmed immediately after lockdown is over. The reason is because there will be a rush in business activities and the need to transport people and goods (particularly the ones that have been stocked prior to the outbreak) across geographical boundaries. This will present an opportunity for the industry to rake in huge revenues, which could possibly cover up for the period of inactivity. However, emphasis must be placed on decongestion while exploring that avenue.

In the final analysis, migrating from what is presently obtainable in the transportation industry, to a more improved and modernized system requires taking audacious measures. No doubt, some regulations or policies might seem tough to make and enforce; however, these steps must be taken in the best interest of Nigerians. Interestingly, the pandemic has shown that everyone, with no exception, would be equal when things get out of hand. Hence, it is left for the government and all stakeholders to take cues and lessons from the outbreak and accept that nothing is actually impossible or impracticable, provided we fix our gaze on it.

Thank you for reading.
Oladimeji Shotunde.

Reference:
www.weforum.org
www.forbes.com
www.businessday.ng
www.mobility.hero.com
www.tradingeconomics.com
www.opec.org