Inland navigation and COVID-19

Inland navigation, as all modes of freight transport, is one of the critical infrastructures and was therefore affected by the COVID-19 crisis. In the research project "Inland navigation in times of crisis" the effects of the COVID-19 crisis on inland navigation in Austria were surveyed. This project was carried out within the framework of the REWWay (Research and Education in Inland Waterway Transport) cooperation between the University of Applied Science Upper Austria and viadonau. The aim was to identify the strengths and weaknesses of inland navigation during the COVID-19 crisis to contribute to a better preparation for future crises.

To determine the impact of the COVID-19 crisis on inland navigation, expert interviews were selected as the method of choice. A total of 10 experts were interviewed between October and December 2020, five of them from the freight shipping sector and five from the passenger shipping sector. In addition to the actual impact of the crisis, the experts were surveyed about the preparation of companies for crisis situations and about lessons learned from the current COVID-19 crisis. Furthermore, they were requested to give a personal assessment of future developments in inland navigation. Table 1 shows an overview of the experts interviewed and the companies they are working for. The following article will focus on insights into effects on freight transport using inland navigation.

Table 1: Interviewed experts

 

Impacts on IWT at the beginning of the crisis

The first effects of the crisis hit inland navigation in March 2020 due to the general decline in global economic performance and the accompanying decrease in transport volumes. However, in specific cases, IWT even experienced increases in transport demand at the beginning of the crisis.

Two of the five experts reported positive effects at the beginning of the crisis due to higher demand for certain transports and services (cf. EFT #1 and EFT #3). In particular, the demand of RoRo services (roll-on/roll-off) offered on the Danube increased to avoid waiting times at Eastern European borders and possible quarantine measures. Instead of travelling by truck to Romania or Bulgaria, the trucks were transported by inland vessels to a Romanian or Bulgarian port and from there to their final destination (cf. EFT #1).

EFT #3 is manager of an Austrian port and describes positive effects due to the increased demand for storage space in the port and the resulting modal shift to inland navigation. At the beginning of the COVID 19 crisis, many companies purchased more raw materials than usual ("hoarding purchases"), which led to a shortage of their own storage space and consequently increased the demand for external storage spaces. Some companies, that rented additional storage space in the port decided to transport their goods by inland vessels, which led to higher demand of IWT (cf. EFT #3).

In the steel industry, demand for barge transport declined at the beginning of the crisis. The decline was due to the weak order situation in the automotive industry. Some car manufacturers' plants in Europe were closed for several weeks, which led to a decline in demand for steel products (cf. EFT #4). The so-called hoarding purchases also had negative impacts on inland navigation in many cases, as raw materials were needed in time for the production of goods and due to the higher transport velocity trucks were used for transport instead of inland vessels as usual (cf. EFT #5). In general, inland navigation was perceived as a reliable mode of transport, mainly because of its high availability (cf. EFT #4 and EFT #5).

EFT #2 confirmed that there was basically less inland waterway transport at the beginning of the crisis. The decline in inland navigation was due to a lower demand for transport and due to regulations, which seemed arbitrary in some cases. At the beginning of the crisis, there were different regulations per country, which e.g. led to waiting times at the borders. In addition to national regulations, port companies set their own rules, for example, with some ports limiting ship handling to one shift or to the time of day (cf. EFT #2). 

A major problem for both freight and passenger shipping was crew changes. Typically, crews are changed every fortnight, i.e. crew members work continuously on a ship for a fortnight and after these two weeks start their time off. At the beginning of the crisis there were cases when the crew had to stay on the ship for two months, as it seemed impossible to change crews due to quarantine regulations (cf. EFT #2). Table 2 shows an overview of the impact of the COVID-19 crisis on freight transport using inland navigation. 

Table 2: Impacts of the COVID-19 crisis on freight transport using inland navigation 

 

Further developments of the COVID-19 crisis on IWT (since summer 2020)

The development of the effects in freight transport were very different. According to EFT #4, the demand for steel products in certain segments developed from very low to very high, which led to an increase in transport demand for IWT. The increased demand at the beginning of the COVID-19 crisis due to hoarding purchases has decreased again, in the meantime demand had stabilised according to EFT #5. The situation regarding storage capacities in the port had hardly changed since the beginning of the crisis; the warehouses were still running at full capacity (cf. EFT #3).

Logistics service providers were less optimistic about future developments, especially regarding reaching pre-crisis transport volumes. EFT #1, who had described his company as a beneficiary of the crisis at the beginning (of the crisis), reported a very sharp decline in transport volumes from the summer 2020 onwards. In some cases, entire journeys were cancelled for economic reasons. As an emergency measure, the remaining goods were transported by truck. According to EFT #2, freight shipping continued to suffer from a decline in transport volume, but noted that the other negative effects regarding the different rules and regulations have been largely resolved. In practice, attempts were made to avoid legally uncertain situations, e.g. the change of ship crews on Hungarian territory, as this was considered rather unstable with regards to the regulations on quarantine measures. The sector relied on the Danube Commission to finally clarify these situations (cf. EFT #2).

Lessons learned from the COVID-19 crisis

The interviewed experts raised several aspects regarding the lessons learned from the COVID-19 crisis: To avoid dependency, it is essential to diversify the customer base. Serving a few customers leads to an increased risk of loss. This risk of loss can be spread by serving several clients (cf. EFT #2 and EFT #3). Furthermore, an honest and targeted exchange of information with customers and employees is considered essential. This serves above all to strengthen customer and employee loyalty (cf. EPT #3). Emergency plans are also useful. In the case of emergency plans, it must be ensured that the employees are able to deal with these plans. An important measure is therefore to raise staff awareness about emergency plans (cf. EFT #5). The COVID-19 crisis has once again shown how important the work of organisations such as Pro Danube International or the Danube Commission is for representing the interests of inland navigation (cf. EFT #2).