Logistics is the transport industry most enthused about investment in new technology, and together with the rail industry, sees clear benefits in greater integration with other forms of transport.
Investment in new technology is viewed as the optimal investment for the logistics industry currently, favoured by 41 percent of respondents. Infrastructure improvements and a merger or acquisition are also highlighted, but to a far lesser extent, by 18 percent each.
Aside from fuel efficient and low carbon technology, what form of technology will be the most significant driver of change in the logistics industry over the next five years?
In common with respondents from rail and shipping, logistics respondents consider that big data is the technology that will act as the greatest catalyst for change over the next five years. The ability to anticipate consumer behaviour and to predict repairs and maintenance issues via the adoption of big data and predictive analytics is most likely to transform the industry over the next five years, according to 36 percent, while autonomous vehicles is cited by 23 percent. Drone technology, adapted for commercial deliveries, is selected by 18 percent.
What form of infrastructure investment would benefit the logistics industry the most over the next five years?
Just 9 percent believe that software supporting Transport as a Service and the development of tailored end-to-end supply chains is the technology that will have the greatest impact on the logistics industry over the next five years. However, 50 percent believe that integration with other forms of transport to deliver bespoke supply chains is the infrastructure investment that would benefit the logistics industry the most over the next five years. A further 37 percent believe investment in road infrastructure would aid the industry most.
Inadequate infrastructure is believed to pose the greatest challenge to the operational efficiency of the logistics industry, together with a lack of suitably qualified people, both cited by 27 percent. Overcapacity is a concern for 23 percent.
The logistics industry is far more apprehensive about the impact of a worldwide economic downturn than aviation, rail or shipping. 46 percent of respondents from the logistics industry view a global recession as the greatest threat to the industry over the next five years, followed by 18 percent who are uneasy about the effect of political uncertainty globally.
Respondents are divided when asked if market conditions are generally positive for the logistics industry. Of the 64 percent who believe market conditions are positive, 36 percent attribute their confidence to improved conditions in key markets, followed by 21 percent who cite continued lower oil prices and a further 21 percent who point to the impact of infrastructure improvements. Half of the 36 percent who do not consider current market conditions to be positive attribute their pessimism to increased competition from traditional competitors, new market entrants and new modes of transport, while 38 percent cite overcapacity.
Respondents offer a range of views when asked to consider the outlook for the next five years. While 59 percent believe that the industry will face heightened competition, 60 percent anticipate that freight costs will rise, and 46 percent expect the number of routes and services offered will increase. 54 percent expect fuel costs to rise.
Fares/freight costs will
The number of routes/services offered will
Fuel costs will
Aside from infrastructure investment, which of the following forms of government support would help the logistics industry most?
Aside from infrastructure investment, the lowering of fuel taxes is seen as the most helpful form of government support for the logistics industry, by 29 percent. This is followed by 26 percent who believe deregulation would provide the greatest assistance to the industry.
When asked which regulation has had the greatest impact on the logistics industry over the past decade, 24 percent point to increased environmental regulation, while 19 percent are concerned about uncertainty around the regulation of new technology, perhaps unsurprisingly given the logistics industry’s interest in autonomous and drone technology.
Which three countries offer the best investment opportunities for rail over the next two to five years?
In common with respondents from the aviation and shipping industries, Asia is regarded as the region offering the best investment opportunities for the logistics industry over the next two to five years. By country, India is the most popular market, selected by 14 percent, followed by China and the US, both selected by 12 percent.
Respondents from the logistics industry are the least confident that the availability of funds will increase over the next five years – 19 percent expect access to finance to improve compared with 22 percent of aviation and shipping respondents and 52 percent of rail respondents. Bank debt is expected to remain the logistics industry’s primary source of funding, by 25 percent, while capital markets, finance leases and shareholder equity were each selected by 18 percent.