The better the question. The better the answer. The better the world works. У вас есть вопрос? У нас есть ответ. Решая сложные задачи бизнеса, мы улучшаем мир. У вас є запитання? У нас є відповідь. Вирішуючи складні завдання бізнесу, ми змінюємо світ на краще. Meilleure la question, meilleure la réponse. Pour un monde meilleur. 問題越好。答案越好。商業世界越美好。 问题越好。答案越好。商业世界越美好。

Transportation and logistics in the coming decade

Disruption. Digitalization. Disintermediation.

Technology innovation and digitalization are disrupting almost every process across the transportation and logistics ecosystem, including the methods of shipment, content and cargo management, and supporting administration activities, such as documentation and payments.

As global population will increase from 7.4 billion to 10.6 billion by 2050, the volume of goods shipped will quadruple by 2050, driven by urbanization, increases in disposable income and internet penetration, and ease of access to new technologies. Document/paper-based shipments are expected to decrease significantly as digital document management evolves.

Given the accelerating pace of change, transportation and logistics (T&L) companies need to transform themselves for a world where they are no longer protected by entry barriers, competition comes from all directions, and digitalization will become the major agent of change.

EY - Transportation and logistics in the coming decade

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Transportation and logistics in the coming decade

"Transportation and logistics companies are facing tremendous pressure due to increasing expectations from both shippers and receivers while nontraditional players are looking to disrupt the industry. Companies need to embrace change and transform themselves to effectively protect and efficiently grow their businesses."

— Kevin Custis, Principal, Sr. Leader Transportation Sector Executive Team

Trade and transport by the numbers

EY - Trade and transport by the numbers

The global trends in play

We have identified six industry-specific change drivers that will impact the T&L industry over the next decade:

  • Global uncertainty: Disruption in the global supply chain cost US$56 billion in 2015 in Europe alone. Economic turbulence, protectionism, and geopolitical instability are forcing transportation and logistics providers to adopt new business models and new alliances.
  • Urbanization: With the rise of megacities, T&L providers need to cope with the challenges of urban logistics, including congestion, difficulties in loading/unloading, and last-mile delivery.
  • Digitalization: Digital technologies will transform the industry, with new efficiencies and new visibility. However, technology is a double-edged sword that also creates rising customer expectations and security challenges.
  • Technology innovation: Business model disruption is coming from established companies and a host of new entrants who are harnessing the latest technology innovations. This will lead to horizontal and vertical integration across the value chain, and networks that are real-time optimized.
  • Need for new talent: New technologies require new skillsets – including design thinking, data sciences and robotics. Hiring costs will rise, and innovation will be a key competitive factor.
  • Sustainability and transparency: Stakeholders, government agencies, and consumers are keenly interested in the practices that guide T&L companies, including sustainability, labor conditions, and environmental compliance.

The T&L industry ecosystem

We believe that companies will need to embrace innovation and encourage new ideas. Fail fast, fail often. Respond with agility and take advantage of regulatory changes. Companies need to prepare for technologies in three waves:

  • Wave 1: Exploit the opportunities provided by technologies that are past the tipping point, such as analytics, digital collaboration, the Internet of Things and robotic process automation
  • Wave 2: Swiftly embrace emerging technologies such as blockchain, connected vehicles and drones as these will disrupt the industry within the next five years
  • Wave 3: Prepare for technology disruption of deep learning, augmented/virtual reality and 3D printing

Next-generation T&L efforts

One of the major retailers has invested more than US$700 million in robotics and has about 30,000 robots working in its warehouses alongside human workers, saving the company about US$22 million in each fulfillment center.



A global medical technology company built a global manufacturing network for its disposable syringe business, with production facilities in the United States, Ireland, Mexico and Brazil. When the Mexican peso was devalued, the company quickly shifted its production to the Mexican plant, gaining from a cost advantage over its competitors’ US factories.

A global bank conducted its deal using blockchain in September 2016 to guarantee trade of approximately US$100,000 worth of cheese and butter between an agricultural food cooperative company and a trading company. The entire process, which usually takes seven to ten days, was completed in four hours.

An e-commerce company is developing an application to connect across all the modes of transport, eliminating the third-party middleman. The US-based app utilizes excess capacity of vehicles already on the road, and analyzes registered drivers’ travel patterns to provide a faster, cheaper, and more efficient shipping alternative. The app was launched in January 2015 and currently has over 25,000 registered drivers.

One of the leading online grocery retailer uses a 5 Ghz radio control system to manage autonomous robots moving around a grid, storing and retrieving stacked crates. The company can control 1,000 robots from a single base station, communicating with them 10 times a second. The company also uses a cloud-based fulfillment and logistics smart platform.

Looking ahead

For some time, the T&L industry has been evolving, with consolidation of players and companies seeking to provide an integrated portfolio of logistics services to address shipper needs. Companies need to think and act as challengers. Now is the time to review their purpose and corporate strategy, business model and enterprise operating model to identify areas which need immediate attention or change in the near future.

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Contact us

Randy Miller
EY Global Automotive & Transportation Sector Leader
+1 313 628 8642

Kevin Custis
Principal, Sr. Leader Transportation Sector Executive Team
Ernst & Young LLP
+1 404 817 4747

Gaurav Malhotra
Digital Supply Chain and Operations Leader
Ernst & Young LLP
+1 312 879 4463

Jim Morton
US Logistics Consulting Practice Leader
Ernst & Young LLP
+1 904 633 3115

Anil Valsan
EY Global Automotive & Transportation Lead Analyst
+44 7903 206464

Gyula Kangiszer  
Innovation and Digital Strategy
Ernst & Young LLP
+1 323 791 4092

Brian D. Lynch  
Logistics & Supply Chain Transaction Advisory Services
Ernst & Young LLP
+1 216 583 2914

Regan Grant
EY Global Automotive & Transportation Marketing Leader
+1 313 628 8974

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