Rising fuel costs are accelerating operators interest in alternative-fuel vehicles, but high upfront investment, infrastructure constraints and uncertainty over future technologies continue to slow fleet decarbonisation, according to new research from GXO Logistics.
The report, The Future of Transport: The Net Zero Transition, surveyed more than 1,000 UK supply chain, transport and logistics decision-makers.
It found that 63% said rising fuel costs were increasing their interest in alternative-fuel vehicles, yet only 38% currently operate them, despite 87% identifying emissions reduction as a key priority.
The findings suggest that commercial considerations are increasingly shaping fleet transition plans, with more than three-quarters (76%) of respondents saying demonstrated cost savings or operational efficiencies are essential to unlocking investment in lower-emission transport.
High vehicle costs, uncertainty over which technologies will prove most viable and concerns about infrastructure are delaying investment decisions, the report said.
As a result, many operators are concentrating on improvements that can deliver immediate operational benefits.
The research found that 43% of businesses are reducing part-loads, while 41% are cutting empty running, 41% are exploring fleet sharing and 39% are optimising routes. All these measures have increased since GXO’s previous survey in 2024.
Carl Hanson, GXO UK and Ireland managing director, said: “Decarbonisation and commercial performance cannot be treated as competing priorities.
“The findings show that businesses need practical solutions that deliver efficiencies now while preparing their fleets for a range of future fuels.
“Better data, stronger visibility and more connected transport networks can reduce waste, cost and emissions today, while partners with the right expertise and scale can help organisations navigate complexity and move from ambition to action.”
The report also highlights the absence of a single solution to replacing diesel.
Seven in ten logistics leaders expect gas-powered fleets using LNG or CNG to be a viable, affordable and operationally realistic option by 2028. Electric HGVs follow at 68%, ahead of biofuels at 64% and hydrogen at 62%.
However, infrastructure planning remains a significant obstacle. Only 25% of businesses have started investment planning for charging or refuelling facilities, while 30% have begun procurement planning around anticipated energy supply.
GXO recommends that operators begin preparing now, using network analysis, phased implementation plans and funding options to establish a transition strategy aligned with their operational requirements and budgets.
It advises that fleet replacement decisions need to be coordinated with infrastructure investment, energy availability and the demands of individual transport operations.
Digital technology also has a role to play. The report points to GXO’s EyeQ transport platform as an example. The platform is designed to improve operational visibility, provide real-time data and support collaboration between transport networks, helping businesses reduce empty running and improve efficiency while preparing for longer-term fleet changes.
The report lays out eight recommendations for fleet operators:
- Act now: Pilot solutions and adopt a test-and-learn approach rather than waiting for certainty.
- Optimise operations: Improve routing, load utilisation and fleet efficiency while planning beyond incremental savings.
- Develop a phased fuel strategy: Align alternative-fuel adoption with commercial priorities and operational requirements.
- Match fuels to infrastructure: Consider geography, duty cycles and the availability of charging or refuelling facilities.
- Plan infrastructure early: Assess grid capacity and energy requirements alongside vehicle investment.
- Access capability through partnerships: Use 3PL and 4PL providers where appropriate to access vehicles, infrastructure and expertise without owning every asset.
- Make decarbonisation a commercial priority: Integrate emissions reduction into decisions on cost, service delivery and investment.
- Invest in digitalisation: Use data and connected systems to improve visibility, planning and transport performance.
The report concludes: “Organisations must act now to reduce emissions. To focus on efficiency and optimisation, plan for fuel transition, and invest in data and capability.
“Early movers will be better positioned to manage costs, adapt operations and capture competitive advantage.
“Those that delay action risk falling behind as regulation tightens and customer expectations continue to evolve.
“The organisations to succeed will be those that balance immediate action with long-term transformation.”
The Future of Transport: The Net Zero Transition is the first in a three-part report series from GXO examining operational efficiency, sustainability and technology-led optimisation in UK transport.
