Gradual disintegration of transport in the Czech Republic

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*Coach and bus service paralyzed * Rapid fall in road transport

ITOY Member Milan Olšanský outlines the situation from Eastern Europe:

Functional road transport of goods is for the State like blood in the arteries of a healthy body. If it starts to get stuck, we can expect a healthy individual to soon become a hospital patient.

Because it is not easy, even in this epidemiologically difficult situation, to imagine what would happen to the economic life of the State if we were have total blackout, not to mention to keep road transport running. Compliant people will stay home, they will not go anywhere, and may suit those that may have a home office, but the provision goods must not stop. People stand, but the goods movements need to continue.

However, there is a slightly different situation in the people transport sector. Logically, when the borders were closed and measures to restrict the movement of people were issued, one of the first to feel the downturn in their operations or economic position was long-distance, regional, intercity and even urban public transport companies. The situation is definitely serious. Although trucks travel on roads and highways, a high percentage of vehicles are already in storage and many have license plates in the depository. Subsequently, these trucks and trailer fleets are under threat from the banks which finance them. They become risk partners and very quickly have to renegotiate the financing conditions – of course, to the detriment of the risk partner.

Paralyzed coach and bus service
After two weeks of the crisis, at the beginning of April, the Czech Carriers Association Česmad Bohemia, a member of the International Union of IRU Carriers, undertook a survey among Czech carriers about how their business is affected by the Coronavirus. Unfortunately, the total decline in orders for bus carriers has been confirmed, more than half of which is also recorded by 40% of freight carriers.
While 80% of casual and commercial carriers lost all orders two weeks ago, today it is almost 90% and an additional 8% lost more than half of the orders.
Tour transport is basically stopped, 43% of companies are already forced to lay off their employees, 45% of employers leave their people at home. There is also an alarming situation for bus carriers providing transport services, where they carry less than 10% of passengers.
It is clear that the quarantine emergency measures have completely paralyzed the bus service and will not need immediate State aid to be able to resume operation after the crisis.

Public transport in many cities runs in restricted mode

Rapid fall in road transport
The situation is also deteriorating rapidly in freight transport. While around 15% of carriers lost more than half of their orders two weeks ago, today it is almost 40% and a further 20% have seen a decline from a third to a half. This is mainly related to the cessation of the automotive industry. 90% of all respondents expect a further worsening of the situation. Here, too, state aid will be required to keep businesses running. However, it will be necessary to improve the payment discipline for its customers, which is declining rapidly, and to support leasing companies in negotiations on deferment of installments. A welcome support would be greater loyalty of Czech based companies to its national carriers, to prefer the services of domestic companies, as we have long witnessed to the West of our borders.

Road transport is the blood in the veins of the economic system