The Coronavirus pandemic has placed the UK and large parts of the world in virtual lockdown, with several industries effectively coming to a complete halt. Here, we take a look at the impact that the COVID-19 outbreak is already having on the transport and logistics industry, as well as the various steps being taken to keep supply chains moving.
With China slowly easing its lockdown measures, intercontinental container shipments are starting to leave the country again. However, the impact of the measures has been felt by haulage operators around the world, with many now playing catch-up as a result. One in four containers in the ports of Hamburg and Rotterdam originate from China, putting the effect on European freight transport into perspective.
According to the International Road Transport Union (IRU), a significant fall in global container shipments could see road transport activity decline by as much as 20% worldwide in 2020 – amounting to a total loss in operator revenues of $800 billion.
Authorities in the UK have taken a number of steps to help haulage and transport operators during this period.
The London Council has suspended the London Lorry Control Scheme (LLLS), which limits the movement of heavy goods vehicles with a maximum gross weight of over 18 tonnes. The scheme is designed to manage the environmental impact of HGV journeys through London, but the decision to suspend it will allow haulage companies to keep supermarkets and other essential shops stocked during the pandemic.
“This is a vital step forward in the industry’s response to the challenges posed by Covid-19,” said David Wells, CEO of the Freight Transport Association. “By extending the hours in which deliveries can be made, it strengthens the resilience of the supply chain and helps businesses to keep supermarkets stocked with the essential items consumers need to remain healthy and safe during this unprecedented time, including food, hygiene products and other basic items.”
In addition, Transport for London (TfL) has suspended all road user charges indefinitely, to further aid HGV drivers and critical workers such as NHS staff during the crisis. The suspension applies to the congestion charge, as well as the Low Emission Zone (LEZ) and Ultra Low Emission Zone (ULEZ).
Other measures introduced to support haulage firms include:
– Deferment of VAT and income tax payments – no business will have to pay VAT for the period from 20 March to 30 June 2020, with payments deferred to the end of the tax year. Income tax for self-employed contractors will be deferred to 31 January 2021.
– Reimbursal of employee wages – the government will cover 80% of the wages of any employees who are temporarily unable to work, allowing companies to “furlough” staff until they are able to return to work, but without having to pay them.
– Delay to IR35 rules – proposed changes to the IR35 rules, or off-payroll reforms, have been postponed to April 2021. The reforms would have seen many self-employed contractors reclassified as employees for tax purposes.
Richard Burnett, chief executive of the Road Haulage Association (RHA), said: “This is good news for the thousands of businesses that are suffering as a result of the impact of the current pandemic. For UK hauliers in particular it’s good news. Their profit margins stand at between 1% and 2% and many are already operating on a knife-edge. For them, these measures represent the difference between make or break.”
In addition to the measures outlined above, the IRU has advised haulage operators to follow government guidelines and implement higher health and safety standards for loading/unloading goods and handling documents. It has also stressed the importance of incorporating traceability into the monitoring of driver and worker movements.
At Transmode, we are taking all the necessary precautions to ensure the safety of both our drivers and customers, as we continue to provide efficient container haulage solutions.
We welcome the action taken by the government and other authorities to keep supply chains moving and will continue to monitor the situation closely over the coming weeks and months. If you have any questions, please don’t hesitate to get in touch with our team.