To mark MT’s 120th anniversary, we asked leading figures from the transport and logistics industry to journey 120 years into the future. In the first of a series of articles, author and transport consultant Dennis Evans gives us his candid predictions
In the first decade of the 19th Century, 1908 to be exact, Henry Ford launched the world’s first mass produced car, The Model T. You could have it any colour desired, as long as it was black. 100 years later the world’s first mass produced electric car was unveiled to the world by Elon Musk, 2008 Tesla, and you could have it any colour you like as long as it was white.
The world’s first recorded flight was in 1903 by the Wright brothers that lasted for 12 seconds in their plane the Kitty Hawk. Fifty four years later the Russians launched its Sputnik satellite and started the space race that has seen over 10,000 satellites controlling communications on planet earth.
Mass production and mass communications have been the driving forces behind the evolution of the transport, logistics and distribution industry for the past 100 years. Any attempt to try and visualise how the truck and transport industry might develop over the next 100 years requires an understanding of the main challenges facing the business that are priorities to be addressed.
From the legacy of the two primary transport modes, vehicles and aeroplanes, it would appear that there is a seismic shift that shapes the industry every 50 years. We should look at what might be possible in 50 year increments. The activities requiring immediate attention can be summarised in the following 10 activities.
1. Industry profitability – this is a 2-3% margin business at its best
2. Compliance with increasing environmental regulation – threats of ZEV penalties
3. Driver & logistics staff shortage & recruitment
4. Energy crisis & management of fleet operations
5. Transport Infrastructure supporting ZEV transition
6. Acceleration of consolidation of major fleets and concentration into small number of global integrated freight movement organisations
7. Threat of geo-political turmoil from tarriff trade wars
8. Impact of AI and Block chain technology on the future of transport administration and customs clearance
9. The emergence of digital technology giants that will ultimately control the future supply chain & purchasing transaction platforms for all global freight movement.
10. Disappearance of exhibting legacy vehicle manufacturers
Three of these activities are likely to see future developments occur and will be very different to what we experience today - infrastructure, skills and profitability. Let’s examine them in a bit more detail.
Transport Infrastructure
The absence of relevant infrastructure to accommodate the decarbonisation of transport remains a critical issue for the industry to solve. Charging capacity, battery recycling initiatives and range anxiety have not been addressed.
The integration of long haul and last mile freight movement will be a key development in what future infrastructure might look like. One forecast is to develop redundant car and truck factories into strategically located freight ports to accommodate a coalition of green technology industries to handle not only the movement and handling of freight but also be a destination for thousands of trucks and vans to refuel, be maintained and where necessary overnight parking and accommodation.
Freight ports would also be complemented by integrating the development of sky ports.
Sky ports will be where both passenger and freight drones will be operated from, to reduce congestion on roads and also facilitate logistics support to last-mile urban autonomous delivery vehicles.
Low altitude commuter and logistics services involving drone technology are being developed. Operated from city sports stadia or urban parking lots Uber and Toyota are organisations currently engaged in the development of relevant regulation to enable this to happen
The future of transport will also be developed by the emergence of Hyperloop high speed trains. Virgin Trains already are looking at 9 projects and 400 test pilots.
Amazon and Space X also see the emergence space being utilised for heavy payloads transported by rockets that travel between sky ports and then integrated with autonomous last-mile delivery operations.
Skill Shortages
It is well documented that there is a shortage of skilled workers in the transport and logistics industry. We are talking about drivers, warehouse operations and administration staff. A latest report from the USA estimates a shortage of 80,000 drivers in 2024 rising to 160,000 in 2030. There are 10 billion tonnes of freight moved by 3 million trucks in the USA and this is worth 5% of GDP. So tackling skill shortages is a critical activity.
Autonomous vehicles will assist the driver shortage no doubt, especially in port operations and other non-public highway locations e.g. mining.
However, inside the world’s warehouses where high-rise storage accommodates inventory the future of stock taking will be undertaken by mini smart drones that can be activated automatically to read bar codes and provide constant inventory management and security cover.
Profitability
Two extreme events in the last 5 years have rocked the transport industry:
1. The Covid pandemic
2. The energy crisis through Ukraine-Russia/Middle East conflicts
Record business failure, administration and bankruptcy have plagued the industry over the past five years. It is not just the logistics and distribution sector that has been rocked by events we have also seen many legacy OEM’s and innovative EV start-ups fail and close factories.
The future for the industry is promised by the adoption of AI and block chain technologies that promise to revolutionise efficiency and productivity.
The ‘smart cockpit’ will be a feature of future trucks and van by virtue of the AI and autonomous driver support technology that will enable a raft of efficiency and productivity improvement.
Driver safety will be a key development. Fuel efficiency will be a major factor in reducing cost, but route planning and vehicle capacity utilisation and the significant improvement in reverse logistics capability will see a dramatic increase in the profitability of fleets.
Fifty years ago there were over 30 truck and van manufacturers in the UK. Today there are zero. There are 6 USA/European legacy truck manufactures and 12 in Asia today. In 120 years time there is a possibility that the future of Original Equipment Manufacturers (OEMs) will be decided by the influence of global hedge funds who will control key capital investment strategies for commodities like transport, energy, utilities and logistics/distribution organisations. The likes of Amazon, Apple , Meta, Ali Baba, Nvidia and Samsung could well be the holding companies that determine the future of the world’s vehicle manufacturing organisations.
The digital colonisation of the world’s economies and societies will play a major part in the way the world of transport and logistics evolves. The industry looks like it is settling for regional concentrations of commercial activity in the USA, Europe and Asia that hopefully will ultimately avoid the chaos of trade wars, tariffs and the spectre of military conflict.
