Transport networks are under a number of major pressures.
A new report from Deloitte, The Future of Freight: Changing the Flow of Goods, identifying a number of trends impacting the industry. The most obvious one is the fact that many companies are doing nearshoring to shorten and secure supply chains. The global landscape is changing as China’s dominance declines, with its trade growth forecast to drop from 26% to 13% over the next five years.
Elsewhere in the world, countries in Central and Southeastern Europe, as well as Central America and Mexico, are making up the shortfall with competitive labor and closer proximity to end-use markets.
At the same time, trade patterns are shifting and technology is advancing rapidly, especially in data science (artificial intelligence and data analytics), materials science (electric vehicles) and engineering (self-driving cars). “Each shift represents an opportunity for new competitors to enter the market, as startups, large retailers and hyperscalers vie for a share of trillions of dollars,” the report said.
To help the industry navigate the future, the report provides the following key conclusions:
Onshore and nearshoring are redrawing the transportation map. Transportation executives preparing for nearshoring predict that by 2025, 20 percent of freight originating in Asia will be diverted to closer markets, and that figure will double to 40 percent by 2030. This will create new opportunities as companies look to move operations closer to end consumers, mitigating the risk of disruption and the impact of inflation on the cost of goods.
Data is a differentiator. Over the next three years, companies surveyed expect data to provide better asset and merchandise visibility (48%), improved customer relationship management (44%) and more efficient workforce optimization (35%), emphasizing The role data and analytics will play as companies seek new opportunities.
Expect new competitive dynamics to emerge. As the industry reorganizes itself, cloud service providers, big box retailers, automakers and tech startups are chasing the transportation industry and its profit streams. In fact, nearly 60 percent of respondents expect these new providers to emerge as leaders in a changing environment, capturing territory and customers from traditional logistics companies while driving new partnership models.
The next generation of vehicles will drive competition. 60% believe truck manufacturers will inevitably seek to become fleet managers as technology advances and supply lines are redrawn, signaling a potential power reorganization.
Core competencies are aligned with changing needs. Transportation leaders recognize the need to adjust capacity to meet demand and look for opportunities to restructure their operations. 60% outsource non-core capabilities and 59% are actively pursuing acquisitions to expand capabilities.