The decade to 2030 will be remembered as a major turning point in the history of mobility and logistics. The technologies driving this shift are intimately bound with new scientific advances, ways of thinking, and business and economic models arising from the ever-more urgent mission to ‘save the planet’.
Barely a week passes without the major headlines about developments in electric vehicles (EVs), with sales in parts of the world achieving new records. The first battery-powered passenger aircraft are already in the air, with commercial operation closer than many realize. Transport as a service, paid for per-use rather than owned, is a natural consequence of the connectivity boom.
Beyond the factors of convenience and cost driving these developments is the ticking clock of climate change and resultant pressure to decarbonize the sourcing and use of energy. Transportation accounts for one-seventh (14%) of global anthropogenic greenhouse gas (GHG) emission1 and can expect continued and increased pressure, and tighter rules, to lower its emissions.
The inventory of enabling technologies in this sector is staggering, and includes: alternative low- or zero-carbon fuels; decentralized production of parts and structures through additive manufacturing; Artificial Intelligence (AI) and its subset – machine learning; augmented, virtual, and mixed reality; blockchain technology that can revolutionize contracts, tracking and payments – including carbon credits –in logistics chains; the Internet of Things (IoT); quantum computing for logistics optimization; robotics assisting greater automation; and more powerful, reliable and quicker digital communications and geolocation with advanced satellites.
Electrification is a major trend in the transportation sector. It is currently most prevalent in private vehicles in areas with a mature battery re-charging infrastructure. Passenger EVs are on course to become mainstream, at least in Europe, by 2024, and the enormous two-and three-wheeler fleet in India, China and south east Asia will be 90% electric by 2030. With a cost learning rate (i.e. the rate at which costs fall with every doubling of capacity) of 19%, costs for batteries will plunge faster than even those for solar PV and wind technology, especially with the advent of solid-state chemistries before 20302. Further improvements in the cost, energy density, weight and volume of electric batteries will enable wider use of battery-storage systems in heavy road transport such as trucks and buses, and in short-haul air travel and short-sea shipping.Societal impacts
On the face of it, the transport revolution seems entirely positive: cheaper, connected mobility and logistics that offer a wide range of benefits and choice to businesses and consumers – while making major strides towards the decarbonization of economic activity. However, the fundamental role of transport and logistics in society makes the sector especially vulnerable to cyber-attacks, and there is a mounting need to identify potential risks and implement appropriate safety measures. There are also unresolved ethical dilemmas associated with the design, operation and maintenance of self-driving vehicles.
Many of the disruptions in mobility are driven by big tech, representing a further avenue for concentration of power, data and control for entities that are considered by some to be digital ‘monopolies’.
Transportation is the lifeblood of cities and the global economy. It is closely linked to world GDP and a growing population. The global logistics market alone will have grown 7.5% annually between 2015 and 2024, to reach USD 15.5 trillion in 20233. Much of this increase will result from investments in technological innovation, predominantly digitalization and automation, but also in novel fuels and energy carriers, and new business models. For example, last-mile e-mobility, including dronebased package delivery, will alter how inner cities work by 2030 – with investments in this sector coming not only from an array of start-ups, but big tech and large automakers as well4.
Changes in this massive industry will affect communication, employment, social relations, urbanization, and economic growth, with a profound impact on life on Earth.
Examples of automation throughout the supply chain have already been demonstrated and applied. Automatic warehousing, self-driving trucks, autonomous ships and automatic intermodal cargo operation will improve safety and make logistics more efficient and cheaper.
Driven by digital technologies, vertical and horizontal consolidation will increasingly transform supply chains. Major players are already capturing larger shares of supply chains to ensure streamlining in order to reap the full benefits of digitalization and integration. We have seen vertical consolidation with Amazon and Alibaba venturing into, and absorbing, levels above and below them in the wholesale and retail logistics chain; for example, drones delivering ordered goods, and trans-oceanic and air logistics.
Examples of horizontal consolidation include the recent mergers of container shipping lines Greater consolidation among original equipment manufacturers (OEMs) in the automotive industry is also likely in the future. Analysts suggest that the OEMs involved will need to find the right balance between competition and integration to compete with digital players set to enter the industry at a growing pace.5
- IPCC (2014) AR5 Climate Change 2014: Mitigation of Climate Change, Intergovernmental Panel on Climate Change
- DNV GL (2019) Energy Transition Outlook, op.cit.
- KPMG (2018) ‘Speeding toward auto industry consolidation: key insight from annual KPMG executive survey’