Transport and Logistics Trends 2019

#2 Shifts in international trade

Shifts in international trade are already visible, e.g. in the rapidly growing numbers of train trips from China to the EU. Growing China-EU trade volumes (both directions), new investments along trade routes and land transport (acting as an alternative that’s faster than ocean freight and cheaper than air freight) will likely reshape international logistics in Eurasia. New trade routes will open and existing ones will expand, as emerging economies become more connected to the global economy.

Shifts in international trade are driven by:

- establishment of free trade agreements,
- emergence of trade wars and barriers to trade resulting from regulations,
- globalization of transport businesses,
- infrastructure development (especially in rail and road as well as through the Belt and Road Initiative supported by the government of China).

T&L companies will undoubtedly benefit from the modernization of railways, highways, telecommunication and other facilities such as hubs located along emerging trade routes. The “new silk road” corridors between China and the EU are expected to grow rapidly over the next few years. Such developments will lead to a lowering of the costs of transport and will enable the creation of new services. These investments and the opportunities for creating new services can together be referred to as “New Trade Route Solutions”.

#3 Software-driven process changes

Software-driven processes changes are expected to grow dynamically over the next few years, generating even larger benefits for business, but at current stage these solutions still need to find their way into the mainstream. The evolution of base technologies, such as Artificial Intelligence, the Internet of Things, Big Data Analytics or Blockchain/DLTs and the pressure on business effectiveness they generate, will create a favorable environment for the development of such solutions.

The following solutions are expected to reshape T&L as software-driven process changes:

- Intelligent Transportation Systems
- Robotic Process Automation
- Predictive solutions (e.g. for maintenance and deliveries)
- Blockchain and all Distributed Ledger Technologies
- AI solutions 

Companies can be expected to implement them to build cost and quality advantage and a better insight into passenger and cargo flow, enabling consumers to experience better convenience and stay ever more informed about (and connected to) transport services.

Substantial changes in markets’ domestic commerce can be expected over the next few years, fuelled by optimistic economic growth forecasts, development of eCommerce markets and the sharing economy and increasing M&A activity in the T&L segment. Solutions in this area will also be driven by changing consumer expectations and an ageing society. All these changes will create a push for new services as well as different value-chain integrations between producers, including ​e-tailers and T&L companies.

There are a number of new solutions that companies can explore due to changes in domestic commerce to provide consumers with more affordable and innovative services, enabling more convenience in online shopping as well as new possibilities to share resources for everyday use:

- Leading brands looking towards opportunities for growing their sales online
- eCommece businesses investing in logistics
- CEP companies designing tailor-made solutions for eCommerce
- Sharing economy
- Logistics consolidations

Among other benefits, machine-driven core process changes can be expected to increase the efficiency of transport and logistics services. Solutions in this area require investment in new technologies and thoughtful implementation.

Machine-driven process changes will be enabled in the longer term by the development of base technologies (including advancements in electro-mobility) and changing regulations. They will also be shaped by an emerging focus on environmental sustainability.

With wider application of the following machine technology solutions, T&L companies can benefit from increasing work efficiency, the automation of core operations and possibilities to fix bottlenecks and design new services:

- Robotization
- Electro-mobility
- Augmented Reality and Mixed Reality devices
- High speed Rail (HSR)
- Last Mile Optimization

To consumers and employees, machine-driven process changes will mean interacting less with people and more with machines in the future, but ultimately, will also result in a greater availability of flexible services.