Transportation, logistics and regional development in COVID-19 era: modelling sectoral shocks caused by policy and safety measures

Abstract

COVID-19 policy and measures have caused both negative and positive challenges for the transport sector. The aim of the research is to model an impact of shocks that transport and logistics encounter during the COVID-19 era on the economy and regional development. A comparative-static approach that involves an input-output model with additional regional modelling block and scenarios are applied. Two scenarios are estimated for Latvia’s economy: firstly, extremely dramatic decline in demand on air transport services by 90%; secondly, unexpected increase in demand for postal and courier services that doubled output. The results of the first scenario argue that the service sector is influenced more than manufacturing due to air transport collapse –rental and leasing services (-11.6%), employment services (-9.7%), other transport services (-7.0%), impact on manufacturing is relatively minor and only on certain branches. The results of the second scenario on doubled output in postal and courier services argue that there is a positive impact, but the scale is relatively low, the most affected industries are manufacturing (of paper products (increase by 1.7%), rubber and plastic goods (1.6%)). The findings confirm that the urban areas due to higher economic activity and larger service sector are more affected to the modelled shocks both negative and positive. The rural areas are relatively less negatively affected during the crisis, but at the same time, during the recovery (for example, in the post-COVID era) it may lead to weaker economic activity and the rural areas will continue to lag behind urban areas.

Two-Speed or Three-Speed Recovery in Post-Covid Era: Regional and Sectoral Development

“…Twospeed and three-speed recovery scenarios employ the same general trend. The findings are consistent with previous results (Auziņa-Emsiņa & Ozoliņa, 2021) showing that metropolitan (urban) regions are more influenced by both negative and positive shocks that the transportation sector confronts due to higher economic activity and a larger service sector. This is a topic that the regional and economic policymakers at the national and EU levels should consider in order to achieve a more balanced and sustainable regional economic development in future.…”

“…The previous results of modelled COVID-19 shocks' impact on transport (Auziņa-Emsiņa & Ozoliņa, 2021) suggest that urban areas would be the most affected, if the anticipated extreme shocks occur. The modelling results on two-speed and three-speed recovery of transport sector in the post-COVID era have alike pattern (see Table 2).…”

“…Land transport and pipeline transport (NACE code H49), water transport (H50), air transport (51), warehousing and transportation support operations (H52), and postal and courier activities (H53) are all classed as part of the transportation (H) industry. Results are obtained using the modified input-output model, elaborated by Auzina-Emsina and Pocs ( 2019) and updated by Auziņa-Emsiņa and Ozoliņa (2021).…”

“…In Latvia, the estimated sectoral shocks resulting from implemented government policy activities and safety measures argue the rural areas are less badly affected during the crisis, but that following recovery (for instance, in the post-COVID era), this may result in lower economic activity, and rural areas will continue to lag behind metropolitan areas (Auziņa-Emsiņa & Ozoliņa, 2021).…”

Rating pressure factors affecting logistics systems during the pandemic and the ideal logistic decision selection under the Pythagorean fuzzy environment

“…The Corona Virus (COVID-19), with its global epidemic and unpredictable duration, has had a great impact on every aspect of people's lives. It is generally accepted that COVID-19 is a phenomenon for ongoing studies (Auziņa-Emsiņa and Ozoliņa, 2021). The logistics industry, especially city logistics, has been severely battered by an acute shortage of distribution personnel, an unpredictable increase in costs and increased quarantine.…”