CONSIGN?s main objective is to collect real-time experiences from the COVID-19 pandemic?s impact on freight transport and reliability of supply for Norway?s transport-dependent industries, and as a base for developing more robust supply chains. In cooperation with ten industry partners, we study the pandemic?s effect on security of supply, adaptability, costs, and induced innovation at large national transport buyers and transport firms with global networks.
Immediately after the first societal lockdown and until the first reopening, road traffic went down considerably, but not for trucks. However, the pandemic did affect truck transport in many ways. The first challenge was related to border-crossings but was resolved quickly with professional drivers receiving exceptions from country entrance restrictions. Both transport buyers and transporters experienced much uncertainty in the period after the first lockdown, resulting in temporary layoffs, delivery challenges, payment issues for customers, and many transporters fearing bankruptcy. Simultaneously, consumers started hoarding, yielding a short demand boom and sold-out situations. However, this situation stabilized after a while.
In-depth analyses of truck movements indicate that activity remained relatively stable during the crisis, but with large differences between segments. Data from on-board systems of trucks show a trend towards more stops per vehicle, especially in urban areas. Reduced road traffic after the lockdown improved conditions for delivery. After the 2021 reopening of society, increased traffic due to reduced public transport use, resulted in driving taking more time, requiring better planning, and in challenges for delivery reliability.
For analysis of transport demand, we had access to 2019/2020 shipment data from the three largest freight forwarders in Norway (ca. 80 and 100 mill. shipments). These data provide a rich basis for analysis of demand effects w.r.t. time, geography and market segments. We find a temporary reduction in deliveries B2B (business-to-business) immediately after the first lockdown, but increases back to the 2019 level during summer 2020 and more so from autumn 2020. Especially parcel deliveries B2B saw a reduction. Simultaneously, deliveries to consumers (B2C) increased strongly right after the lockdown. Especially increases in the parcel segment were large and have remained at high levels since. With new restrictions and lockdowns during autumn 2020, especially around Oslo, the parcel segment increased even more, reaching record volumes around Christmas. Especially demand for home-deliveries has increased. In some periods, there were shifts in transport demand from B2B to B2C and from HORECA to retail.
For B2C deliveries, short-term challenges occurred, like limited sorting capacity and delivery point and distribution capacity. Also demand for grocery home-deliveries increased much, especially in periods with high infection rates, and yielded (short-term) capacity challenges. Transport volumes for industry and wholesale trade were somewhat reduced, while especially retail saw increased volumes. In sum, however, demand for heavy transport did not change considerably during the crisis, and increases have mostly been in the number of shipments. According to the freight forwarders, e-commerce increases will continue throughout 2022. This yields increased distribution of parcels and more driving (kms) with vans.
Nationally, the vulnerability of production and warehouses to infection outbreaks was soon recognized and strict infection control measures were introduced early. Internationally, especially container shipping and air freight were affected and experienced large rate increases and capacity challenges that can yield longer-term consequences. For container transport, challenges started with lockdowns in China and reduced capacity at important global harbors. This resulted in container imbalances and shortages and harbor delays, while transport demand increased. Large impacts of the Suez Channel blockage made this situation even worse. For air freight, large reductions in passenger routes strongly reduced belly capacity. These developments resulted in increased rail transport from China to Europe.
For truck transport to/from Norway, experiences are more mixed. Border-crossing transport has largely been satisfactory, except for large delays immediately after border closure and reopening. In 2021, challenges increased, particularly from autumn onwards. Especially the scarcity of both Norwegian and foreign drivers has given structural challenges and travel restrictions and uncertainty for foreign drivers apparently changed their focus more towards the European market. Further, delivery times of trucks have increased much because of a lack of critical parts; a consequence of COVID-19-induced demand changes. In some industries (e.g. fish export), this has already given precarious transport capacity challenges.
The COVID-19 pandemic has led to major changes and disruptions for Norwegian business and industry, not in the least for freight transport. With CONSIGN, ramifications of the current crisis will be studied through three veins: 1) analysis of real-time and time-series data from fleet management systems for a large sample of trucks; 2) screening of changes in economic activity in different sectors based on detailed shipment data from the three largest freight forwarders in Norway, and 3) in-depth case studies among important actors within Norwegian transport and supply chains.
Combined, this yields insights into economic and cost impacts of disruptions on Norwegian freight transport and transport-dependent industries in the economy as a whole, reliability of supply for the Norwegian society and approaches to tackle transport and supply chain challenges.
CONSIGN will also study effects of public support measures, by assessing the timing of changes in activity levels against the timing of policy measures and restrictions. Further, CONSIGN will assess whether changes are characterized by short-term shocks, or stabilize at new levels. The latter can provide insights into response time and adaptability for firms and public authorities.
Through collaboration with ten major actors from industry, CONSIGN is strongly anchored with practice. This ensures relevant and real life insights, and facilitates very comprehensive analyses that cover a large share of the Norwegian economy and supply chains across a broad range of industries, all transport modes, and with a high level of detail both in geography and time.
Due to the abruptness of disruptions and their nature, the corona situation allows for a unique stress test of the robustness of supply chains for Norwegian society and business, and understanding the veins through which the current situation affects transport and reliability of supply is crucial for the design of effective political responses and policy measures.