The cargo market is facing a radical change, the report shows

Five forces are transforming the freight industry after two years of supply chain strain that disrupted trade worldwide, according to a study by Deloitte published this week. To the The Future of Freight: Transforming the Movement of Goods Deloitte surveyed more than 300 executives from transportation and manufacturing companies in the United States and Europe with annual revenues ranging from $500 million to $50 billion. Researchers then conducted executive interviews to gain more perspective on the evolving supply chain and identified five key trends driving the future of the freight market; These include nearshoring, new competitive forces and the growing importance of data and analytics in supply chain operations. “Deloitte research reveals a transportation industry poised for significant transformation, in which success will be largely determined by the ability to dexterously manage five key forces,” the researchers wrote. “These combinations present major challenges and opportunities for the transportation industry.” The five forces, according to Deloitte, are:

  • Onshoring and nearshoring to redraw the transportation map. Our research shows an increased interest in moving manufacturing closer to the end user to mitigate the risk of disruption and the inflationary impact on the cost of goods. Even if this happens half as often as our survey participants expected, it represents a radical change that creates new opportunities for established leaders and openings for new competitors to enter the market.
  • Well-curated data is the big differentiator. Organizations with advanced, unified digital strategies currently have a significant advantage as an industry still suffering from data fragmentation rushes to bridge the gap. Almost half (48%) of survey respondents expect data to improve the visibility of assets and commodities over the next three years. Many say that over the same time horizon, data will help improve customer relationship management (44%) and workforce optimization (35%). The rise of data and analytics could pave the way for new competitors from digital-native startups and hyperscalers targeting transportation as a source of revenue.
  • New competitive dynamics abound. As the industry reconstitutes itself, cloud service providers, wholesalers, vehicle manufacturers and tech startups are following the transportation industry and its profit streams. As interest and expertise grows, they are able to usurp territories and customers from legacy logistics companies while fostering new models of collaboration.
  • The restructuring will adapt core competencies to a changing environment. Transportation leaders realize they must change to master this moment. Most respondents are in the process of reorganizing their structure and operations – 60% are outsourcing non-core functions, and a similar proportion (59%) are actively seeking acquisitions to expand their capabilities. These trends are not mutually exclusive: companies that outsource are also building or acquiring new core competencies.
  • New vehicles and new insights mean new competition. The coming wave of next-generation vehicles utilizing electric power, autonomous technology, and IoT data will not only transform the capabilities, efficiency, and sustainability of the transportation system, but potentially bring about a power shift. Among our survey respondents, 60% believe it is inevitable that truck manufacturers will seek to become fleet managers as technology advances and supply lines are redrawn.

The researchers added that business leaders should prepare for a rapid acceleration of these forces in the years to come, while keeping in mind the role of the public sector in setting policy and modernizing infrastructure to meet the goals of the transportation and freight industry reach. “A new era of partnerships with governments and regulators will impact the long-term success of the industry’s established and new entrants,” the researchers wrote.

Leave a Comment