5 Future trends in transportation

So far in 2022, we have noticed that the road haulage sector has undergone some changes that have been looming and have now become a reality. A number of trends, which we already announced in our macro survey of more than 1,000 hauliers across Europe in 2021, are still in force this year.

The effects of the coronavirus crisis, the 'Brexit', digitalization, or more recently, the conflict in Ukraine which raised the gas prices to an all-time high, are drawing a new paradigm that is projected into the future and that leaves us some clear lines to follow. These are, broadly speaking, the trends in transportation that we must take into consideration in the coming months.

Trend 1: A more efficient supply chain

As we mentioned previously, the consequences of the coronavirus pandemic (in China, one of the world's main logistics "engines", partial and even total closures are still ongoing), the conflict in Ukraine, and other factors have led to the current supply chain facing an unprecedented demand for goods, in a scenario with less accessible routes, lack of labor and more limited transportation capacity.

This is why logistics professionals are seeking solutions that involve all points in the chain to make it more efficient. Aspects ranging from production to sales, obviously including transportation. A good example is Smartchain, a project funded by the EU and involving a total of 43 institutions from eleven European countries, aimed at improving the fruit and vegetable supply chain on the continent.

Its objective is to develop innovative systems in terms of production, processes, development, market access, logistics, storage and distribution in the field of fruit and vegetable production with nine communities working in France, Germany, Greece, Hungary, Italy, the Netherlands, Serbia, Switzerland, and Spain. The project shortens supply chains for perishable products and thus promote the consumption of local products.

Trend 2: Alleviating shortage of truck drivers

Another major issue that needs to be addressed immediately by the road transport sector is the severe labor shortage. As we recently saw in this blog, the situation is increasingly worrying.

In fact, the International Transport Organization (IRU) has revealed in a recent report that during 2020 alone, the supply of truck drivers fell by three quarters in Europe, from 24% to 7%. These figures come at a critical time when demand has risen sharply.

It is estimated that the shortage of drivers in Europe is above 400,000, a significant figure that could continue to increase given the average age of those in active service, above 50, and the dropout rate of self-employed drivers. In addition, working conditions that require long hours of solitude and long working hours keep many away from work.

For this reason, the objective now is to work towards easier access to the profession and more flexible conditions, making it a more attractive occupation.

Trend 3: A cheaper last mile delivery

In recent times, last-mile shipping (the final leg of transporting a product directly to the consumer's door) is emerging as one of the most established trends worldwide. Consumers demand immediacy and convenience, and the traditional process of shipping from manufacturers to warehouses, and from distribution warehouses to stores, is becoming less common.

E-commerce, which was up 44% in 2020 compared to the previous year, is playing a big role in this scenario. 'Black Friday' or 'Prime Day' offers are in an all-time-high, with more and more people ordering online what they usually picked up in a physical store. This is a trend that will continue for a long time to come. In fact, the consulting firm P&S Intelligence has forecasted that the last-mile delivery market will expand at a CAGR of 20.3% from 2021 to 2030.

However, for enterprises and logistics companies, this represents yet another expense. To alleviate this, the need arises for more efficient methods using technology such as AI, autonomous vehicles, freight exchanges such as Teleroute and crowdsourcing.

Trend 4: Electric vehicles: a tangible medium-term gamble

And this is where the electrification of commercial vehicles comes into play, something that is not new but is becoming increasingly plausible, with more and more brands announcing the launch of 100% electric models and the commitment of companies to use them. DHL, for example, has just announced the purchase of 44 Volvo electric trucks for its delivery work in Europe.

However, the final leap will have to wait a little longer. This is at least according to the analysis carried out by Cambridge Econometrics and presented by the European Transport & Environment Federation (Transport & Environment), which indicates that pure battery-electric vans and trucks and trucks prepared to use electric roads will not be competitive compared to internal combustion vehicles until 2025, and fuel cell vehicles competitiveness will not be achieved until 2030.

These are deadlines that will have to be brought forward if the goal of reducing carbon dioxide (CO2) emissions from the road freight fleet and, therefore, of climate neutrality by 2050 is to be achieved. This will require technologies (batteries, electric road systems, and fuel cells) and fuels (green hydrogen) with zero carbon emissions to be brought down in cost and, above all, regulations to be established at the European level and in each country to make rapid and safe progress on the path to the decarbonization of road freight transport.

Trend 5: Sustainability, the all-encompassing trend

And, of course, we have sustainability. In the search for "greener" transportation, measures are already being taken, such as the aforementioned electric trucks that reduce dependence on fossil fuels or the offshoring of large companies' supply chains, which means fewer kilometers traveled and, therefore, a reduction in the environmental cost of manufacturing these products.

Another aspect of great importance is innovation to reduce supply chain emissions. As investors and consumers pressure large manufacturers to reduce emissions, supply chain professionals are constantly looking for new ways to improve efficiency. For example, technology that tracks on-road behavior, which not only reduces transportation emissions but at the same time saves money on fuel and maintenance costs.

A good example is a tool that Teleroute has just launched: TelerouteRecommends. This is a feature based on artificial intelligence and machine learning (AI&ML) that aims to recommend transport offers to platform users that match their daily needs through an AI&ML algorithm that analyzes drivers' historical usage data to discover patterns and suggest the best freight offers.