Transportation 2025 Megatrends & Current Digital Best Practices

Forward-thinking supply chain leaders consider future megatrends that will impact their business, and they effectively lead their organizations to develop the supply chain capabilities necessary to thrive in that future.

This Global Supply Chain Institute white paper identifies the major megatrends that will impact the transportation industry over the next ten years as well as the key capabilities that transportation thought leaders are developing to enable their firms to successfully manage transportation in 2025.

Transportation represents the largest element of most firms’ supply chain logistics cost.

Accordingly, supply chain leaders have prioritized managing this cost for decades. In many cases, this cost focus drove a commoditization of much of the transportation carrier market.

This efficiency versus effectiveness dynamic has changed in the twentyfirst century.

Over the last decade, the transportation discipline faced major challenges including sharp fluctuations in fuel pricing, driver shortages, expansion of 3PL/4PL providers, commoditization of carrier pricing, expanding use of technology and tools, the rise of megaships in ocean freight combined with the expansion of the Panama Canal, increasing regulation (for example, regulations on hours of service; compliance safety and accountability; electronic log device), and the explosion of digitization capabilities.

These challenges have exponentially increased the complexity of the transportation environment.

Leaders in the field understand that transportation is a strategic element of the end-to-end supply chain.

The company’s last interface with a customer/consumer comes when goods/services are transported to them.

Smart companies leverage this interface as a customer service tool, and treated as such transportation requires new capabilities in preparation for the coming decade.

Examining the past decade can reveal much about how to prepare for the journey to 2025.

Seven best practices emerged from leading organizations’ transportation capabilities.

Applying these best practices represents a first step for managers seeking the opportunity to derive significant value from the supply chain.

All seven of these best practices will be covered in the white paper, including the two leading practices:

• Creating value from Lean methodologies; and
• Establishing the right culture for driving transportation excellence.

It is not sufficient, however, to focus solely on current capabilities.

The digital economy that is being fueled by the Internet of Things (IoT), necessitates that supply chain leaders plan for a future in which transportation will be significantly different.

Examining research based on the trends and issues in transportation and logistics over the past twenty-five years, we have identified three critical transportation megatrends for 2025.

The megatrends provide the second major building block in developing an action plan to deliver the supply chain capabilities of the future.