The vaccine rollout in 2021 was a lifeline for businesses globally, as stringent lockdowns started to ease and some semblance of normality resumed. But while economies gradually reopened, transport and logistics continued to grapple with the damaging effects of the pandemic.
Labour shortages and supply-chain disruptions dragged on into 2021, adding to a situation that was becoming precarious even before covid. The American Trucking Association warned in 2019 that the driver shortage in the US was becoming grave, projected to swell to more than 160,000 by 2028.
Over the next decade, the US trucking industry was expected to need about 1.1 million new drivers to meet domestic demand. And these figures were pre-pandemic. Today, more than 70 percent of all US freight tonnage is moved via the nation’s highways, showcasing the scale of the crisis.
The situation is not just restricted to the US. The UK and EU struggled to fill driving vacancies in 2021, triggering intermittent panic buying and supermarket shortages. E-commerce shopping sparked by extensive home working and economic lockdowns has boomed since 2020, disrupting the logistics sector and exacerbating pre-existing labour shortages.
Dutch information services firm Wolters Kluwer said in October that it expects the global transportation industry to grow at a rate of 3.4 percent through 2027, far below pre-covid forecasts of close to 20 percent.
Shipping was also not spared last year. Ports struggled with maritime congestion and bottlenecks caused by the greater demand for goods. Delayed containers have added to supply-chain problems that have weakened the global economy, and the lack of sufficient drivers to take cargo away from the ports have compounded the gridlock.
In November, the International Energy Agency projected that global seaborne trade for the year would surpass 2019 levels by 0.5 percent and expected road traffic to return to pre-covid levels in Q4 2021. Whether pressures on logistics and the transport sector start to fade as restrictions end remains to be seen, but cracks in the system were clearly there pre-covid and will take time to resolve.
The approval of the bipartisan US infrastructure plan was a landmark moment for the country’s declining roads and a potential turning point for private sector participation. Transport electrification is one notable example from the $1.2 trillion package, an important shift aimed at tackling emissions.
President Joe Biden has set his sights on a national network of 500,000 EV chargers. In February 2022 the government was expected to publish updated guidance for states and cities, with the goal ultimately to kickstart greater private investment.
If the US is to meet Biden’s climate target of net-zero emissions by 2050, the government will need to decarbonise the transport system rapidly, and that will create diverse new investment opportunities for private sector stakeholders.