The pandemic originated from China, marking its beginning in 2019, and has been continuously spreading by then to all over the world, so far 218 countries and territories, and 2 international conveyances have been affected with COVID-19, the U.S. being on the top with cases reaching to about 31.5 million, followed by India, Brazil and then by many European countries such as Russia, France, Italy, and others. The COVID-19 cases reaching to the big named countries with strong dominance in the global market which has adversely affected the economy globally. The spread of the Coronavirus has led to the global recession, many companies are being bound to take stringent actions of laying off their employees, small businesses are being shut, and manufacturing facilities are being put on hold. There has been a disruption in the supply chain of many industries due to restrictions in logistics and the closing of manufacturing facilities. In addition, the slowdown in the economy has lowered the spending capability of individuals and people are saving money for emergencies.
The World Bank stated that the global economy is expected to reduce by 5.2% in 2020. Emerging market and developing economies (EMDEs) are expected to decrease by 2.5% and the economic activity in advanced economies may get reduced by 7% in 2020.
The U.S. witnessed a decline of 4.8% on an annualized basis in the first quarter of Q1-2020. In addition, the slowdown in the economy has also lowered the spending capability of individuals and people are saving money for emergencies.
The Latin American region is affected by COVID-19 in both human and economic terms. The IMF World Economic Outlook stated a decrease of 8.1% in the GDP of Latin America in 2020.
Tolling system makes use of vehicle-to-toll plaza communication technologies that allow electronic payment of toll. The system enables a monetary transaction between a vehicle passing through a toll plaza and the toll collection agency. The tolling system is replacing the manual toll collection and making the passage of vehicles much faster thus reducing traffic congestion and enabling smooth flow of traffic. However, the recent pandemic has slowed the flow of traffic and there is a fall in the transportation of vehicles due to several lockdowns and work-from-home initiatives.
COVID-19 has brought in a diverse change in the trend of various industries and markets. The implementation of digitalization has boosted and companies are making digitalization their core strength. The social distancing norms have led to the development of some advanced technologies and so is the case with the tolling system. Vehicle owners prefer making cashless payments and the public-private partnership is aiding for the same purpose. Several authorities are taking initiatives to increase the number of the electronic tolling system.
In July 2020, Florida’s Turnpike Enterprise and the State Road and Tollway Authority of Georgia (SRTA) joined the E-ZPass network. The new partnership will help in bringing interoperability to motorists traveling along the east coast soon.
The pandemic has forced the companies to adopt several changes to their operations and companies require taking a strategic decision to sustain their development in this pandemic crisis. Certain companies delayed any sort of acquisitions and cut short the capital expenditure to maintain their financial conditions, in addition, they also need to align the sales projection with changing demand to limit their production and avoid any extra spending. Companies need to align their strategies with the changing market, they need to operate the facilities according to the present safety norms of government to bring the production back to pace. Companies need to innovate and develop technologies according to the changing trends of society.
Companies are required to re-evaluate the business models and bring in several changes to be prepared for any such situation. The companies need to include more direct-to-customer shipping as part of the standard model. Also, the market players need to increase resilience by competing in growing market sectors.
COVID-19 has led the companies on refocusing their short-term operational priorities and re-evaluate their demand forecasting. The pandemic has adversely affected all the industries with sales of automotive, electronics, and other products falling. The restriction on traveling, logistics, and closing of offices, schools, and major lockdowns reduced the traffic flow on the roads. This situation adversely affected the demand for tolling systems. For instance, Miami, New York, and Los Angeles are the most congested cities in the U.S. However, due to the pandemic, the traffic in each city dropped from 2019 levels by 26%, 30%, and 36% respectively.
However, crashes, fatalities, and speeding increased proportionately to the number of drivers on the road. For instance, in April 2020, New York City reported 83,478 violations within eight days in March that even with such few people on the roads. A situation similar to this brings an opportunity to enhance the road infrastructure and install better and more advanced violation enforcement and tolling systems.
The supply chain of tolling systems was adversely affected as several transportation and logistics movement were restricted. Several industries experienced a range of complications related to transportation due to country-to-country travel restrictions. However, the market players are trying to incorporate safety norms and working as per government regulations to maintain their supply chain. The pandemic impacted most industries including the highway sector. For instance, a company such as Clearview Intelligence Ltd stated that they struggled in the supply chain to service new orders in the short term. However, the company is fully committed to serving the ongoing contracts and customers.
As the COVID-19 prevailed the initial period saw a disruption in both supply and demand of the tolling system market. Several restrictions were imposed on transportation thus impacting the market adversely. However, the tolling system market will see a gradual increase in its growth due to several changing trends in the market such as increasing growth in automotive vehicles and growth in connected cars. The increasing investments to build smart cities will lead to higher demand for tolling system products, solutions, and services. The urban cities are now being upgraded with more advanced technologies for law enforcement and post-COVID days are likely to see more development in urban cities and advanced technologies.