How transportation and logistics can position itself in a new world

The volume of goods shipped will quadruple by 2050. But competition is coming from all directions, and digitalization will drive big change.

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 and 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.

The global trends in play

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

1. 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.
   
2. Urbanization: With the rise of megacities, T&L providers need to cope with the challenges of urban logistics, including congestion, difficulties in loading and unloading, and last-mile delivery.
   
3. 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.
   
4. 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.
   
5. Need for new talent: New technologies require new skill sets — including design thinking, data sciences and robotics. Hiring costs will rise, and innovation will be a key competitive factor.
   
6. 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.