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back to index backAMERItalk November,  2016


Getting Ahead of the Megatrends in Transportation and Logistics

This is an excerpt from Transportation and Logistics in a Changing World: The Journey Back to Profitable Growth (BCG report, October 2016).

In the coming years, the transportation and logistics (T&L) industry will most likely be significantly altered by several megatrends that are reshaping the business environment. As these megatrends change the industry, leading players will capture the new opportunities by reacting faster and more decisively than their competitors. The most successful companies will start preparing for these changes today.

Six Critical Megatrends

Our discussions with T&L CEOs have highlighted six megatrends that will exert the strongest influence on the industry. These trends will affect T&L segments in different ways. Some segments will encounter headwinds (for example, road and air transport will see higher costs as companies meet sustainability objectives), while other segments will gain advantages (for example, rail transport stands to benefit as a greener” mode of shipping). In all cases, the megatrends will create business opportunities that players should be prepared to address.

A Two-Speed World. Global economic development is progressing at two speeds. Emerging economies are expanding rapidly, while growth in developed countries is stagnating. The fast growth of emerging economies will further increase trade flows within and among Africa, Asia, and Latin America. As consumption increases in rapidly developing economies (RDEs), so too will production. As a result, companies from these countries will become large global players. (See Allies and Adversaries: 2013 BCG Global Challengers, BCG report, January 2013.)

All T&L segments will benefit from the increase in transport volumes resulting from the high growth rates of RDEs. The biggest beneficiaries of the increase in long-distance global transport will be the sea and air transport segments—as well as the infrastructure and freight-forwarding segments that provide services related to long-distance transport. The greater complexity of transport chains will also create demand for logistics advisory services and contract logistics.

Urbanization. As the large-scale migration from rural areas to urban centers continues, more megacities will evolve and create new demand patterns among consumers that affect logistics players. These companies will need to cope with the greater complexity of logistics within cities and with consumers’ increasing expectations for convenience.

The segments that stand to benefit the most from urbanization are road transport and CEP delivery, as well as hinterland terminals and warehousing. The contract logistics segment will also see increased demand. Rail and air transport and the related infrastructure segments will benefit to a lesser extent as players offer more point-to-point connections between cities.

Sustainability. More stringent regulations and greater resource constraints make it imperative for logistics players to find new ways to reduce energy consumption. Additionally, the increased awareness of sustainability issues among consumers will mean that green” transport will have greater value.

To read entire article, please click here.

Source: BCG Perspectives - GAI





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