Picture of Complex road network by night

How can commercial OEMS navigate the crossroads of market shifts?

Authors

  • Johan Örtendahl

    Senior Manager, Consulting, EY Sverige

  • Ulrika Eklöf

    EY Global and EMEIA Mobility Leader; EY Nordics Industrials and Energy Sector Leader; EY Global Coordinating Client Service Partner

  • Martin Cardell

    EY Global Mobility Solutions Leader

13 minute read 14 Apr 2025
Related topics
Automotive
Advanced Manufacturing

As the logistics sector evolves at breakneck speed, discover how OEMs can stay ahead by redefining their go-to-market strategies.

In brief
  • OEMs must overhaul legacy strategies to match the fast-evolving logistics landscape.
  • Specialized demands and cost pressures are pushing them to refine service models.
  • OEMS must digitize and innovate to capture value in a shifting market.

The logistics landscape is currently at the epicenter of a pivotal shift. Even as transformative waves sweep across various industries, the logistics players are facing a confluence of challenges, from evolving consumer behaviors and fluctuating customer demands to geopolitical upheavals, global restructuring of supply chains and double-sided pressure on profit margins.

It is, therefore, imperative for commercial truck original equipment manufacturers (OEMs) to recognize the profound changes that are unfolding in one of their key markets. The convergence of strong forces of change is resulting in a new paradigm for ground logistics.

This article, based on extensive EY research and interviews, explores what it will take to win in commercial vehicles market from the OEM’s customer perspective. We examine the implications of change in the logistics sector, explore a new market cluster model and emphasize the urgency for OEMs to adjust their strategies and their commercial operating model in response to market fragmentation.

Picture of Dashboard and rearview mirror of a truck
1

Navigating ground freight’s new terrain

Five pivotal forces are redefining ground freight logistics, creating strategic opportunities for OEMs ready to embrace change.

Our research indicates there are five primary drivers of change in ground freight logistics. Many of these present sizeable opportunities for OEMs, but only if they realign their commercial approach. 

  • De-risking ripple effects: The combined effect of the COVID-19 pandemic-induced supply chain crisis and the geopolitical development over the last five years has created clear incentives for many verticals to de-risk supply chains by regionalizing both supply chains and production. Increasing regional demand translates to good news for ground freight specifically, but this rise in demand doesn’t come for free. The increase in overall complexity will force multinationals to drive efficiency even harder to offset their increasing cost base, which in the long run will trickle down as increasing pressure on the logistics sector to optimize every aspect of their business.

  • Double-sided margin squeeze: Temporary post-pandemic overcapacity in ground freight has, in combination with the overall pressure to drive efficiency, already put a lot of pressure on ground freight pricing. This increasing pressure on the revenue side is further compounded by significant increases in operating costs driven by the recent year’s inflationary pressures, ultimately exposing ground freight operators to a double-sided margin squeeze.

  • Technology impact at all levels: Rapid progress in better tools and systems as well as machine learning (ML) and artificial intelligence (AI) in general is dovetailing with the pressure to drive efficiency. This leads to an unusually fast adoption of new technology across almost every aspect of ground freight. Technology adoption is now driving increased automation, precision and efficiency across warehousing, ecommerce picking, load tender marketplaces, general operations and planning, real-time tracking, enhanced visibility, route planning and more. Some players can’t afford to keep up through, so steep technology investments have merged with traditional economies of scale as a catalyst for consolidation, especially in Europe.

  • Dominance of omnichannel: While the COVID-19 pandemic accelerated 10 years’ worth of ecommerce adoption in the short term, the most significant change was that it really cemented omnichannel as the dominant model across many large consumer verticals for the foreseeable future. As large retailers looked at increasing ecommerce sales — but also returns — they were forced to leverage their retail network as free pick-up and return drop-off points to keep costs under control, while also proving a seamless omnichannel shopping experience. The cumulative effect of all of this is the rise of omnichannel distribution, which requires much more dynamic, responsive and bi-directional logistical capabilities. These need to deliver customer delight, reasonable margins and high operational efficiency across all distribution channels — all at the same time.

  • Sustainability ambivalence: With increasing uncertainty around consumer willingness to pay for low-emission products and previously set regulatory timelines, we’ve entered an era of sustainability ambivalence. In addition, logistics players will have to deal with regulatory uncertainty on a city level where certain metropolitan areas are revising their previously stated city zone regulations, whereas others are not. With this context in mind, we see that some logistics players and their customers are pivoting back to business-as-usual scenarios, whereas others are teaming up to instead lead the way and make it work. This development will present pockets of market opportunities for OEMs with the right solutions.
Trucks and cars driving in a city at night, with a tech overlay
2

Unveiling new buyer behaviors and their implications

The commercial vehicle market is at a crossroads, with OEMs and customers facing challenges that require a strategic, nuanced approach.

The commercial vehicle market is experiencing significant changes, characterized by the emergence of distinct key customer categories that each present unique challenges and opportunities. Historically, the market was defined by a straightforward buyer-seller relationship, primarily focused on vehicle specifications, durability, reliability, maintenance and service. Customer categories were typically organized by industry and application, allowing OEM key account teams to operate within a relatively straightforward and consistent framework of customization options.

Picture of Traditional ground freight value chain

However, as the market evolves, OEMs face transporters who have engaged even deeper in a multitude of interconnected activities, including inbound logistics, warehousing, order processing, transportation planning, outbound logistics and last-mile delivery. Today, major transportation players are striving to integrate horizontally across the entire transport value chain, leveraging digital capabilities to enhance end-to-end visibility and optimize the flow of goods.

This transformation is leading to a shift toward strategic partnerships in transportation, such as collaborative fleet models and subcontracting. These collaborative approaches allow companies to optimize resources and reduce costs, minimizing the need for major transportation companies to maintain large fleets while maximizing utilization rates. Additionally, there is an increased focus on flexibility in fleet ownership, with companies opting for leasing vehicles instead of outright purchases. This flexibility enables them to scale their fleets up or down based on demand fluctuations without the long-term commitment of ownership.

To effectively navigate this intricate ecosystem, OEMs must understand the specific dynamics of key customer categories, which include:

  1. Long hauling: This segment focuses on transportation over long distances, where efficiency and cost-effectiveness are critical.
  2. Regional hauling: This segment addresses transportation within specific regions, often requiring specialized vehicles to meet local and regional demands.
  3. Last mile: The last-mile segment is essential for delivering goods directly to consumers, emphasizing speed and reliability.

Additionally, OEMs need to grasp the broader landscape in which these customer categories operate. Understanding the following components within the transportation ecosystem is essential:

  1. Home depots: Involve facilities that support trucks — crucial for efficient preparations of trucks and optimized to reducing downtime and enhancing operational efficiency
  2. Destination facilities: Encompass the logistical needs of warehouses and distribution centers, which are integral to supply chain efficiency
  3. Third-party logistics providers (3PLs): Manage logistics and transportation for various clients, playing a vital role in the supply chain
Nowadays, new factors such as charging infrastructure, grid capacity at our home depot and digital capabilities are impacting our composition of the truck fleet structure.

Medium-sized transport provider

Charging possibilities at the distribution center was a key factor to sign the distribution agreement.

Large 3PL

By understanding these key customer categories and the complex ecosystem in which they operate, OEMs can effectively engage with their customers and adapt to the changing landscape of the commercial vehicle market.

Picture of The transportation ecosystem

As OEMs confront the challenges associated with these categories, they must acknowledge the increasing complexity of customer needs. Traditional models of customer engagement are becoming obsolete as buyers demand more tailored solutions that address their specific operational requirements.

For example, the long-haul category faces systematic pressures that necessitate a continuous reevaluation of pricing and service models. Rising fuel costs and labor expenses are squeezing margins, leading to a competitive environment where profitability is increasingly difficult to maintain.

The rise in operational costs has resulted in a margin squeeze for logistics players. This, combined with inflation, has resulted in a race to the bottom in terms of profitability.

Logistics industry expert

Furthermore, the regional haul landscape is marked by a growing demand for specialized services, particularly in high-margin segments such as cold transport and health care logistics. OEMs must adapt to these niche markets to remain competitive. Additionally, the regulatory environment is becoming increasingly stringent, especially regarding environmental standards. Companies are under pressure to comply with regulations while maintaining profitability, leading to a heightened focus on sustainability and low-emission vehicles, including electric vehicles. This shift presents unique challenges for buyers, who struggle to value electric vehicles due to uncertainties surrounding total cost of ownership, including residual values, and fluctuating energy prices and ways to secure them long term. 

Electric vehicles are particularly challenging to value from a buyer's perspective due to uncertainties surrounding total cost of ownership, fluctuating energy prices and the evolving infrastructure needed to support them.

Medium-sized transport provider

Buyers require clear pricing models that reflect long-term savings and operational efficiency. Consequently, manufacturers have been compelled to offer shorter leasing periods, as buyers are hesitant to invest in electric vehicles with long payback periods. The rapid pace of industry development means that significant changes could render older models obsolete in just a few years, making it crucial for OEMs to provide clear and flexible pricing models.

Also, the last-mile revolution is reshaping delivery expectations, with consumers demanding faster and more reliable service. This shift necessitates flexibility in delivery solutions, as businesses must adapt to fluctuating demand patterns. The ongoing driver shortage poses significant operational challenges, impacting both costs and service levels. This shortage compels logistics providers to rethink their fleet strategies and seek innovative solutions to enhance efficiency. Furthermore, the regulatory environment remains stringent, particularly concerning environmental standards. Companies are under pressure to comply with regulations while maintaining profitability, leading to a heightened focus on sustainability and low-emission vehicles. 

Currently, there is uncertainty regarding future regulations. But there is a lot of attention, and political decisions will affect the business significantly, e.g., we see cities implementing CO2-free city zones.

Large 3PL

As OEMs confront these emerging challenges, they must also be aware of the competitive pressures exerted by new entrants and established players alike. E-commerce giants and players with their logistics arm have intensified competition, compelling traditional logistics providers to innovate and enhance their service offerings.

In summary, the commercial vehicle market is at a crossroads, with OEMs and their customers facing a myriad of challenges that require a strategic and nuanced approach. By understanding the specific dynamics of each key customer category, OEMs can better position themselves to meet customer demands and capitalize on emerging opportunities. The following chapter outlines actionable strategic imperatives tailored to each category, enabling OEMs to navigate this complex landscape effectively.

Trucks at a charging station
3

Adapting to a new market reality

In the evolving commercial vehicle market, success hinges on recognizing distinct segment needs.

As the commercial vehicle market continues to evolve, OEMs must recognize the unique challenges and opportunities presented by each distinct market segment. The traditional one-size-fits-all approach is no longer viable; instead, a tailored strategy that addresses the specific needs and dynamics of each cluster is essential for success. By understanding the intricacies of the transportation ecosystem, OEMs can develop targeted solutions that not only meet customer expectations but also drive operational efficiencies and profitability.

The following strategic imperatives outline actionable recommendations for OEMs to effectively engage with the ecosystem of commercial vehicles, ensuring they remain competitive and responsive to the changing landscape.

  1. Long hauling:
    • Develop integrated solutions: Create comprehensive solutions that combine vehicles and services integrated to support logistical flows.
    • Enhance cost competitiveness: Establish centers of expertise that specialize in enabling competitive pricing structures focused on total cost of ownership (TCO) models that includes, e.g., fuel efficiency, maintenance, insurance and financing.
    • Leverage technology: Invest in telematics and data analytics to provide customers with insights, e.g., on route optimization and vehicle performance, helping reduce operational costs.
       
  2. Regional hauling:
    • Focus on niche markets: Identify and target higher-margin segments, such as cold transport and health care logistics, which require specialized vehicles and services.
    • Regionalized sales approach: Implement a more localized sales strategy that allows teams to respond quickly to regional market demands and fragmented customer preferences.
    • Best-in-class TCO offers: Equip sales teams with the tools and training necessary to deliver competitive TCO offers across various vehicle configurations, emphasizing the benefits of different powertrains.
       
  3. Last mile:
    • Highly specific product applications: Develop specialized vehicles designed for last-mile delivery, focusing on features that enhance efficiency and comply with local regulations.
    • Flexible delivery solutions: Offer modular solutions that allow customers to scale their operations based on demand fluctuations, including options for subcontracting and outsourcing.
    • Sustainability initiatives: Invest in electric and low-emission vehicles to meet growing environmental regulations and customer expectations for sustainable delivery options.
       
  4. Home depots:
    • Operational efficiency: Focus on optimizing operational processes at home depots to ensure maximized uptime and address fluctuating vehicle demand.
    • Infrastructure development: Collaborate with facility operators to enhance the infrastructure that supports truck operations, ensuring that these facilities are set up to handle varying demands and usage patterns.
    • Technology integration: Implement vehicle monitoring systems and digital tools to enable high utilization, excellent vehicle and driver performance, and route optimization.
       
  5. Destination facilities:
    • Customized fleet solutions: Work closely with destination facilities to understand their specific operational needs and develop tailored vehicle solutions that enhance efficiency.
    • Collaboration with local authorities: Engage with local governments and regulatory bodies to ensure compliance with zoning and environmental regulations, facilitating smoother operations for destination facilities.
    • Infrastructure support: Provide guidance on optimizing the physical footprint of destination facilities, including recommendations for energy management systems and operational workflows.
       
  6. Third-party logistics providers (3PLs):
    • Tailored offerings: Develop customized vehicle and service packages that cater specifically to the operational needs of 3PLs, including flexible leasing options and asset-light models.
    • Data monetization strategies: Support 3PLs in leveraging data collected from transportation activities to create new revenue streams, such as offering analytics services that enhance operational efficiency.
    • Partnerships for innovation: Collaborate with technology providers to integrate advanced route optimization tools and AI-driven solutions that can improve fill rates and reduce empty miles.

By following these strategic imperatives, OEMs can position themselves as valuable implementation partners to their customers, driving growth and success across the evolving landscape of the commercial vehicle market. This proactive approach not only addresses immediate customer needs but also anticipates future trends, ensuring that OEMs remain at the forefront of industry innovation and competitiveness.

Truck driving by
4

Thriving in a rapidly changing landscape

OEMs must innovate with precision, crafting tailored strategies to drive success in the long term.

How EY can help

The logistics sector and ground freight specifically are changing faster than most OEMs are prepared for — even players within the logistics sector struggle to keep up. While some manufacturers experiment with new business models, the reality is that legacy structures such as existing go-to-market playbooks, traditional sales and service approaches with key accounts, and connected incentive structures are all still deeply entrenched.

 

OEMs that fail to adapt and re-optimize their go-to-market approach will not only struggle to win new customers, but they also risk becoming irrelevant to a gradually growing share of customers. The days of selling "a truck with a couple of add-on services” are numbered. The new game is selling the right truck, to the right operator, with the right ecosystem of services and digital capabilities to ensure success.

 

The challenge is to not only become excellent at this more granular go-to-market approach but to also do it while retaining overall cost-of-sales and operational efficiency.

 

For a pragmatic playbook for OEMs, you must:
  • Redefine how value is captured: Future commercial wins will be less about hardware and more about ongoing tailored high-margin services, from uptime-as-a-service to financial and insurance products designed to meet specific fleet needs. This will be a gradual and granular shift, playing out differently across the entire market.
  • Strategically evolve the old key account model: Fragmented customers require a more tailored, localized and consultative approach to sales. The adaptable go-to-market model that connects the right balance of technical, commercial and financial expertise, backed by proficient and flexible sales teams, is crucial. Achieving this at scale, and with high cost of sales efficiency, is where you truly differentiate in bottom-line impact and customer satisfaction.
  • Digitize the entire sales and service experience: OEMs must build new, technology-enabled engagement models that not only integrate OEM technology offers, such as telematics, predictive analytics and AI-powered fleet management but also leverage digital tools and analytics to help drive sales performance and efficiency for OEM sales and aftersales teams alike. A 360-degree digital enablement is the key to achieving better sales results, despite higher granularity and without organizational bloat.

The winners will be those who move first, fast and decisively — those who not only react to these changes but also actively shape them. Winners will also move strategically, thoughtfully placing bets on new commercial capabilities and evolving their go-to-market approach, informed by best practices in globally scaled solution sales. Massive market shifts always present great opportunities to drive outsized business growth, but conversely, they can also cost you even your best customers if you don’t evolve with them at the speed of their market.

 

How EY teams can help

At the EY organization, we work with leading OEMs on corporate and individual market levels to help navigate this transition, build new sales strategies and future-proof their commercial models. Through our industry professionals , local presence, vast experience from solution-based sales and our broad technology, data and AI capabilities, we provide tailored insights and solutions that drive tangible results.

 

Let’s build a better future for commercial vehicles — together. 

 

The authors wish to thank Anders Tylman, Johan Berlin, Mathias Malik Nilsson and Christoph D. Erbenich for their contributions to this article.

Summary 

The ground freight logistics sector is undergoing rapid transformation, outpacing the readiness of many commercial truck OEMs. This article, leveraging EY teams’ research, advocates for a digital, customer-centric overhaul of sales and services, suggesting that the winners in this space will be those who act swiftly, strategically and decisively to harness the opportunities presented by these market shifts.

About this article

Authors

  • Johan Örtendahl
    Senior Manager, Consulting, EY Sverige
  • Ulrika Eklöf
    EY Global and EMEIA Mobility Leader; EY Nordics Industrials and Energy Sector Leader; EY Global Coordinating Client Service Partner
  • Martin Cardell
    EY Global Mobility Solutions Leader
Related topics
Automotive
Advanced Manufacturing

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