Transport – so much more than movement from A to B

Did you know that it is not uncommon for transport costs to account for more than 10%¹ of a product's total cost? And how do you know which part of the transport cost to focus on and prioritize if changes are to be made?

The transport industry is an area in transition, with a lot happening related to higher levels of automation, digitalization, and other areas of innovation. Buzzwords like "IoT", "blockchain", "geofencing", and "machine learning" are terms that everyone is throwing around, and indeed, these new areas are exciting! But where should one start?

Before looking at more disruptive measures, it is important to have control over the basics of your flows. Starting with the low-hanging fruit may not sound as cool, but it can make a significant difference at the bottom line.

Areas to explore include possibilities within consolidation and route planning, which can have a decisive impact on profitability. Furthermore, in some industries and companies, owning one's own fleet can be profitable, while in other cases, it is most cost-effective to purchase the service from someone else. The break-even point needs to be identified in order to make the right decision. Not least, for cost reasons, it may be necessary to review the business to change established truths and capture new opportunities.

But if we look towards the more disruptive changes, what do we see? And how can transport benefit from a faster pace of innovation?

A higher degree of digitalization and new technological innovations through the aforementioned buzzwords create new opportunities and make the system less vulnerable, as much of the information in a transport service today resides in the minds of transport managers, logistics managers, and drivers.

The shift towards higher automation in vehicles is also rapidly advancing. Companies are developing fully autonomous electric trucks that operate without a driver’s cabin, designed for long-haul routes and reducing the need for human drivers. Initially, these vehicles were focused on environments like ports and logistics hubs with repetitive flows. However, as the technology evolves, we are seeing these autonomous vehicles being adapted to handle more complex, dynamic transport networks, including integration with other modes of transport. This advancement signals a future where autonomous, connected, and electric vehicles become the standard in efficient, sustainable transport operations.

Something that is crucial for us to have a future to look towards is, of course, our environment. How are transports equipped to meet increasing environmental demands? Here, it is important to both keep track of and adapt to regulations that directly impact transport, but there is also an opportunity for business actors to lead the way. Take for example the environmental zone on Hornsgatan² in Stockholm, introduced by the city council, while the environmental zone around Apotea’s central warehouse is an example of action taken by a single business actor.

Do you find this as exciting and important as we do? Then keep an eye out for the next part in our article series, where we delve even deeper into issues related to logistics and sustainability.

_{¹Rodrigue, J.P., (2020), The Geography of Transport Systems, FIFTrH EDITION, New York: Routledge, 456 pages. ISBN 978-0-367-36463-2
²https://trafik.stockholm/trafiksakerhet-trafikregler/miljozoner/miljozon-hornsgatan/}