PECULIARITIES OF FUNCTIONING AND ADAPTATION OF SMALL AND MEDIUM-SIZED ENTERPRISES IN UKRAINE’S TRANSPORT SECTOR UNDER MARTIAL LAW

Abstract

Introduction. The full-scale Russian invasion of Ukraine in 2022 had a tremendous impact on the national economy, and the response of the transport sector was fragmentary and complicated, provoking serious disruptions. Small and medium-sized enterprises (SMEs), whose importance to the national transport sector has been growing since 2010, have faced new war related challenges such as damaged infrastructure, demand shocks and lack of labor. These SMEs are vital for employment, innovation, and resilience of Ukraine’s economy, and their survival during wartime is critical for ensuring both national functionality and future economic recovery. Purpose. The aim of the study is to assess the influence of martial law on the operational performance of SMEs in the transport industry and to identify key adaptation mechanisms that ensured business continuity under extreme conditions. Methods. The study is based on statistic data from 2019–2023 and qualitative analysis of industry reports. The study conducted using general and special scientific methods, statistical and comparative analysis methods to indicate changes in enterprise numbers, service volumes, employment and evaluates adaptation strategies; generalization for forming conclusions. Results. It was established, that in 2022, the number of small and medium transport enterprises declined by over 25% as the result of war and martial law. In 2023, SMEs in transport sector began to recover with a 7.1% increase in sector service volumes. Recovery The reason for the recovery of the SMEs growth is in fast adaptation of enterprises to wartime conditions, which included the following measures: reorienting logistics to the western borders, minimizing costs by reducing the workforce and optimizing the supplier network, increasing attention to domestic markets, exploring new foreign markets, and implementing digital tools. Digitalization was a key factor in maintaining efficiency and service continuity. It has been established that the implementation of GPS-control systems for the movement of vehicles, electronic document management, automated passenger service technologies, and logistics coordination platforms has significantly increased the efficiency of work in wartime conditions. Conclusion. Despite the immense pressures of wartime conditions, Ukrainian transport SMEs have demonstrated strong resilience and adaptability. Flexible business models and innovative solutions allowed Ukrainian transport SMEs enterprises to stabilize and begin gradual growth. Continued support for innovation and risk management is essential to ensure long-term recovery and competitiveness of Ukrainian transport SMEs.