Credit Management July and August 2021

OPINION
such as coffee shops, newsagents and
sandwich bars in train stations which
were reliant on the transport industry’s
commuter footfall.
It’s a problem that shows no sign of
abating. Even if many countries are
now apparently over the worst of the
virus, unlocking society is a slow and
cautious business (and the risk of further
restrictions has not yet faded).
There’s no two ways about it – disruption
will be the new normal for the foreseeable
future. And with that in mind, businesses
need to be predicting what’s on the road
ahead.
AUTHOR – Tim Vine
A POSITIVE FUTURE
While uncertain times definitely lie
ahead for the transportation sector, it’s
not necessarily all doom and gloom. Over
the last year many roads have been turned
into cycle or public transport routes,
lowering emissions, and improving the
health of the population. Combine this
with the electric vehicle revolution just
around the corner, and you have an
industry which is significantly greener
than before the pandemic.
and public transport will begin to swell to
considerable – if not quite pre-lockdown
– levels. The road ahead is different to
what’s come before, but it’s not necessarily
worse. The world is on course for a
future which is both greener and more
convenient for consumers.
It’s now up to organisations to weather
the current storm, remain flexible as
the world opens up, and put in place a
bold new vision to take advantage of an
exciting future.
THINKING LONG TERM
In terms of long-term thinking,
transportation businesses must continue
to monitor the situation as we emerge
out of lockdown and adapt as needed.
As policies change, they need to strike
a balance between reduced operations,
and providing enough capacity for key
workers and whoever else can legally
travel while adhering to social distancing.
On the back of this, long term investment
programmes need to be re-examined
in light of the fact that things won’t be
returning to normal anytime soon. On
the subject of employees, organisations
will have to plan for the availability of
key personnel to ensure that staff with
critical skills and training are available.
As the world opens up and more people
are allowed to travel, businesses will
need a strategy for scaling up their active
workforce to ensure networks remain safe
and operational.
Another point to consider is that
travelling patterns may well never return
to normal. It’s no secret that the world
has embraced remote working with
enthusiasm, and many businesses will
no longer require employees to be in the
office all the time. This will significantly
reduce use of transportation services in
the long run.
Payment performance data can be used
as an indicator of the financial health of
businesses and is a useful tool to help
businesses assess risk. Our trade payment
data shows that payment behaviour in the
transport industry slightly deteriorated
over the past year, with businesses paying
their bills promptly decreasing by 2.8
percent to 36.3 percent in February 2021.
Urban, suburban or metropolitan area
passenger transport – other than railway
transportation by underground – saw
the highest deterioration in prompt
payments. Thankfully, the current data
indicates that the industry has enough
short term assets to cover its short
term debt and return to growth as
lockdown eases.
Transport is no exception.
Transportation is of course integral to
our lives, but under lockdown, it took on
a new importance.
This change in how we move also comes
with brand new business opportunities.
Ridesharing for example, or bicycle
rentals. As the economy opens up, there
will be further opportunities across the
industry and the whole economy. In fact,
as a baseline scenario, Dun & Bradstreet
expects the economy to rebound by
around five percent this year, offsetting
some of the losses incurred in 2020 when
real GDP fell by almost 10 percent .
As the world begins to open up, private
Tim Vine is Head of International Finance
and Risk Solutions at Dun & Bradstreet.
Advancing the credit profession / www.cicm.com /July & August 2021 / PAGE 35