The transportation industry is always on the move – but even for such a dynamic landscape, it has been an eventful few years. Between the Covid pandemic, the ensuing supply chain crisis, and the current state of the global economy, transportation companies have faced challenge after challenge.
That taught us a few things. We found out supply chains are not invincible, and the world felt first-hand the effects of a disrupted logistics industry. But we also saw the transportation industry’s resilience and knack for innovation. As the world is recovering and picking back up, it’s time to look to the future.
I sat down with our engineers and analysts and asked them what transportation industry trends they expect to see. Here are the major 2024 trends and market shifts they predict.
Digitalisation and going paperless
One of the most major effects the pandemic had on the industry was the move to remote work – and the consequential push toward digitalisation. Currently, we’re seeing a serious increase in the popularity of digital carrier platforms, transportation management systems and fleet management systems. Big shippers such as MSC, Hapag-Lloyd and others have arelady digitised their operations. Smaller companies are following suit, and many are even investing in their own software solutions, systems and tools for their employees and customers.
A good example of digitisation currently happening in the transportation industry is paperless shipping. Just a few months ago, a manufacturing firm in the UK sent a fully digitalised shipment to Singapore, making the UK the first G7 country to move toward fully paperless shipping. The move reduces processing times by up to 75%, and we can fully expect the rest of the industry to quickly start following suit.
Embracing mobile connectivity
In an industry that revolves around large fleets spanning across huge distances, communication is more than important – it’s critical. Whether we’re talking about communication between staff members or with customers, being able to reliably and quickly transmit information can make or break a modern supply chain.
Mobile apps make it easier for everyone along the chain to communicate, execute transactions, transmit their location, obtain environment and delivery data, and more. Several of our clients with large supply chains have supplemented them with a mobile application to keep drivers connected and help keep track of deliveries.
Beyond our own experience, mobile app usage is rising on a global scale. 60% of online travel searches begin on a mobile device, and the number of mobile app downloads has been steadily rising since 2014. Everything points to that trend continuing, and mobile connectivity being an increasingly prevalent part of transportation in 2024, as well.
Sustainability and regulations
As the climate continues to change, the world at large is increasingly focused on preserving the environment. The transportation industry is no exception.
In recent years, we’ve seen various regulations aimed at reducing the environmental impact of shipping regulators. As we head into 2024, we can expect some more transportation regulations to take effect.
For example, starting January 1st, 2024, the EU is including shipping into the EU ETS – Emissions Trading System. That means that shipping companies will be required to carefully monitor and report their emissions, as well as purchase and submit allowances for them.
In addition, on March 1st, 2024, the third update of the European Union’s customs pre-arrival safety and security system, Import Control System 2 (ICS2), will be implemented. The update brings various new requirements for all goods transported to, or through, the EU, and businesses involved in transportation will need to follow certain steps. All transport companies will need to undergo self-conformance tests and ensure their systems align with ICS2 regulations. As such, we expect transportation industry trends in 2024 to include a heavy focus on ESG tracking, reporting, and compliant solutions.
As digitalisation grows, so does the need for cybersecurity. That goes for any sector – and since, as we said, transportation is going increasingly digital, the risk of exposure to cybercrime is also on the rise.
According to a Moodys report, transportation is one of the sectors facing high cyber risk exposure. Cyberattacks on the sector are capable of paralysing entire systems and disrupting supply chains, as well as exposing huge amounts of passenger or shipment information.
For example, in January 2023, an attack on China AIrlines systems resulted in 3 million passengers’ details being leaked. In a different incident this summer, a ransomware attack managed to shut down Japan’s largest container airport for two days.
In light of these events, it’s not surprising that companies are investing more heavily in cybersecurity. Looking at transportation industry trends coming in the near future, we can safely conclude the industry is going to remain focused on safeguarding its operations.
AI and ML
Artificial intelligence is revolutionising the world around is, and that includes the transportation industry. AI adoption in the industry is rapidly rising, with the global AI in transportation market expected to reach $3.87 billion by 2028.
Artificial intelligence brings a plethora of possibilities to transportation. AI systems are being trained to recognise lights and pedestrians in order to automate aspects of driving. On a larger scale, algorithms are being used for traffic control, which can help town planners reduce congestion and even control emissions.
Automated Pavement Distress systems are another way artificial intelligence is already helping the transportation industry. Computer vision algorithms analyse large volumes of images to identify potholes, then create classification and detection models based on deep learning.
And those are just some of the examples. The possibilities of AI are potentially limitless, and I firmly believe we’re going to see more and more applications of various algorithms across the industry.
It’s shaping up to be an eventful year for the industry. The sector, fueled by recent challenges, is embracing digital progress, as well as focusing on cybersecurity. Sustainability is very likely to remain at center stage, especially considering how many companies have committed to going carbon-neutral in the coming decade or two. Last but not least, the proliferation of artificial intelligence and machine learning is already revolutionising aspects of the industry, and I firmly believe there is a lot more to come.
In our work, we’ve seen each of the above transportation industry trends slowly taking hold through the years. As we head into 2024, it’s important to know what to watch out for and what the market is moving toward. The transportation industry will continue to evolve, and knowing which way it’s going is our best way of keeping up with it.