The IRU has revealed that the government’s inaction towards the road transport sector could lead to a wave of bankruptcies.
New research from the transport organisation has shown the continuous impact Covid-19 has had on the commercial road transport industry which could trigger a “very high default and insolvency risk” across the sector worldwide.
IRU reported, on a ranked risk scale from one to ten, all regions of the world are standing at the “highest levels” at nine or ten.
The organisation claimed this could indicate a wave of bankruptcies in road transport, which could overall have a “negative effect” on the global economy and its ability to recover from the pandemic.
The research also shows that global losses have escalated to $679bn (£511.9bn) for goods transport, and at least $500bn (£376.9bn) for passenger transport.
The update is said to be “particularly disastrous” for Europe, where the forecasted losses for goods transport operators have risen two-thirds since the summer to $125bn (£94.2bn), and $94bn (£70.8bn) for passenger transport companies.
IRU has warned that if no “immediate action” is taken, these losses are expected to “spiral further” during the second wave of Covid-19.
IRU’s General Assembly has reportedly backed an “urgent call for action” to governments worldwide requesting particular help in securing “cash grants” to address liquidity, insurance premiums flexibility, and to waive taxes and charges.
Umberto de Pretto, secretary general for IRU, said: “The vast majority of the over 3.5 million road transport companies that we represent are small and medium sized firms, and they are the glue that holds global supply chains and mobility networks together.
“Most of them are struggling to pay their bills. This is a huge threat to the global economy. Without immediate government action, a shocking number of road transport operators will go bankrupt in the coming months, causing irrevocable damage to supply chains and mobility networks, and therefore devastating the global economy.”