Shore up global transport to defeat the COVID-19 (coronavirus) pandemic

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Empty plane cabin. Photo: JC Gellidon / Unsplash
Photo: JC Gellidon/Unsplash

The coronavirus pandemic is an unprecedented calamity, simultaneously striking at the global, national, local and personal levels. How we respond at each level will make the difference between a flatter and less traumatic COVID-19 curve or the acute health, economic and social impacts that could leave long-lasting consequences, especially for the poor.

Strengthening emergency health services is the urgent priority, and this depends on our capacity to move people and goods safely during the crisis. Transport also has a vital role in containing long-term damage to societies and speeding up recovery. However, at the same time, air travel, public transport and freight are unraveling all around the world.


COVID-19’s toll on transport

The response to the pandemic, from social distancing to lockdown policies for affected areas, has had major implications for mobility and connectivity, as well as cumulative impacts on the basic infrastructure systems that keep regions, markets and supply chains going. This magnifies the effects brought by the pandemic, not just on health, but also on education, jobs and economic inclusion as people and goods stop circulating.

Aviation is the hardest hit, with collapsing demand and far-ranging negative effects, even while air travel is critical to safeguard the mobility of professionals and essential goods. A decline of over 40 percent in global passenger traffic is expected in the near term, and the International Air Transport Association (IATA) estimates that airlines will lose passenger revenues of $113 billion globally if the coronavirus spreads further. This will threaten the financial stability of many airlines. The immediate impacts of COVID-19 on the aviation industry include layoffs of airline and airport workers, as well as slowdowns in related sectors; but the effects cascade into all sectors of the global economy.

The exposure of global logistics—which together with transport account for 10 to 12 percent of global GDP, or more than $8 trillion—has become starkly visible in the crisis. COVID-19’s economic impact will be felt most strongly in countries whose value chains are closely linked to epicentres of the disease, as disruptions in transport supply chains affect production nodes and cause cascading shortages of products—further worsened by hoarding. It is estimated that COVID-19 wiped $50 billion off global exports in February alone.

Likewise, the pandemic will disproportionally affect countries that have major regional ports, and those with long or weak supply chains for essential goods, particularly low-income countries that do not produce enough food or medication. Countries with large urban populations that rely on public transportation are facing drastic challenges of moving essential workers and goods, and countries that have significant public-private partnership programs in transport face fiscal risks from force majeure and compensation clauses as demand falls.


The way forward

Mobility must be a crucial part of the response to the pandemic, not just to curb its spread but also to rekindle economic activity and ensure that the poor are shielded from its immediate and long-term impacts.

As governments work on moving from isolation to management of the pandemic, the top priority has been continuing the supply of services and goods while stopping the spread. Solutions depend on the well-being of transport workers and lifeline mobility services that get essential teams to their workplaces. This requires actions such as access control and infection inspections, but getting systems working again may also require rescuing essential operators, for example by reducing fees or taxes on airlines to alleviate the financial crunch. With support from the World Bank and other international financial institutions, emergency investments in road maintenance could quickly generate livelihoods for the poor and reenergize economies. The private sector can also work with governments to patch gaps in supply chains, and support long-distance and large-volume transportation for medical supplies, doctors and nurses.

The crisis has laid bare the vulnerabilities of the transport sector, and we should make it an opportunity to address some of these to build future resilience. This must include openly discussing the existing business models and finding solutions for complex issues, such as state-owned air carriers that are highly indebted and not financially sustainable. In low-income countries, it is also a chance to formalize the trucking and public transport sectors, reduce the reliance of railway companies on subsidies, and invest in rural roads projects that improve connectivity to health facilities and local markets.

As tens of thousands of people continue to become infected and millions go into preventive self-isolation, keeping transport systems running while observing the necessary precautions is vital to defeating the pandemic, both now and for the future.


Makhtar Diop

IFC’s Managing Director and Executive Vice President

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