Forces Transforming Transport and Logistics into Smarter Sustainable Systems

Abstract

Markets complexity has grown to some extent that modern transport and logistics (T&L) is difficult to understand what to focus on, being impacted by the global economy, compliance with CO₂ emissions, competition, reorientation of business models, financial, and technology change, among others. So, it is important to identify what forces are transforming the T&L industry, which can be classified into five major pillars: Digitalization, Shifts in international trade, Enterprise-software-driven process changes, Changes in the market’s domestic commerce, and Machine-driven process changes. These forces are visible and impactful; thus, businesses should be reshaped by anticipating disruptions regarding changes in distribution channels, economic growth outlooks, and the impact of technology changes. These forces will make logistics networks change as much as their environments change due to climate change and CO₂ emissions, using co-opetition to increase efficiency and adapt their business by building smarter sustainable systems to meet future challenges. Moreover, through three cases of study, it is seen how these trends are helping businesses not only to improve their operations, increasing performance, efficiency, and effectiveness, as well as to gain competitive advantage, but also to reduce its impact related to the climate change in compliance with Sustainable Development Goals (SDGs) and Environmental, Social and Governance (ESG) practices.

1. Introduction

Companies and industries are in the middle of transformation, marked by huge changes in technology, with high disruption and competitive fervor to satisfy consumer preferences while they are dealing with barriers to entry and the optimization of supply chain and logistics. These changes can fit under the industry 4.0 umbrella to achieve the strategy of digital integration of end-to-end value chain (Figure 1), including development of digital business models, corporate culture, management approaches, role of IT, digitization of product and services offerings, and adopting data and analytics as core capabilities. All these changes cause complexity in business, and they are related to Chief Executive Officers (CEOs) main concerns aligned with sustainability [1, 2]:

• Revenue growth through company’s prospects.

• Business disruptions due to changes in distribution channels.

• Business disruptions due to changes in core technologies of service provision.

• Availability of digital skills in the workforce and the industry.

• Improvement of global economic growth.

Figure 1.

End-to-end value chain.

In terms of transformation as a driving force, innovative technologies are targeting logistics process to increase efficiency and productivity through automated scheduling, consolidation, on-demand trucking, and carrier-based analytics, which impact transportation industry since they must increase visibility across the supply chain.

Transportation is an important part of the supply chain, since it is the link between companies or business units by delivering materials from one location to another, being part of the end-to-end-value chain (Figure 1) through the inbound and outbound logistics functions from Porter’s value chain with primary and support activities [3].

Transportations and logistics are important activities across world, since they represent about 10.7% of the Global Gross Domestic Product [4], which includes cargo transportation services and represent one of the backbones of international trade; it is being transformed by changing nature of digitalization and economic patterns.

Every company has its own way of managing its processes, but the general structure is as shown in Figure 2, with primary activities (inbound logistics, operations, outbound logistics, marketing and sales, and service) and support activities (infrastructure, human resources, technology, and procurement). Companies are connecting their value chains through inbound and outbound logistics.

Figure 2.

Connected value chains.

Since the world is moving into an energy-constrained and low-carbon, supply chains need to ensure the cost of emissions is paid by those who reap benefits spurred by consumer behaviors and regulations, using technology that enables real-time control and greater flexibility. To improve productivity and achieve high performance, transport and logistics require aligned business strategy, agility, coordination integration, transparency, engagement, latest tools adoption, strengthening shortcomings, improvement of the cash flows, climate change impact considerations, as well as the management of customer expectations. These requirements can be met with high efficiency and effectiveness through forces transforming transport and logistics into smarter sustainable systems, such as:

• Global trade.

• Market’s domestic commerce.

• Digitalization.

• Machine-driven processes.

• Software-driven processes.

2. Background and context

2.1 Transportation and logistics overview

Logistics is a strategic process connecting supply chain network through the management of information and physical materials, involving the movement and storage of materials, parts, and finished inventory across organization to fulfill customer orders [5, 6, 7].

Logistics as process involves six main functions to deliver value through flow of information and materials (Figure 3). These functions are divided into six components [8]: logistics will acquire raw materials and supply to manufacture or deliver products or services (procurement), will store and manage inventory (inventory management) in a distribution centre or warehouse (warehousing), it will identify materials used to protect goods while moving across locations (packaging) and, it will also move goods from a source to a destination point (transportation) to satisfy received customer orders (order fulfillment); also, for each component it is required information to manage these operations and communicate with customers (information management).

Figure 3.

Logistics functions.

Transport and logistics (T&L) is one of the most important industries worldwide, represented by an umbrella of vehicles and road traffic, rail transport, aviation, water transport, logistics, and public transport and mobility services [3, 4, 5, 6, 7, 8, 9]. With the COVID-19 pandemic outbreak, the Suez Canal blockage, and the Russia–Ukraine war, all industries were affected, as well as T&L marked, increasing the imbalance between supply and demand due to supply shortages and the increase in price pressures.

Freight transport and logistics rates were decreasing, impacting global container freight rates, which started to decrease in January 2022, while global air freight rates increased from China to North America and from China to Europe, remaining stable from Europe to North America [10, 11].

On the other hand, geopolitical disruptions also impacted on different industries through commodity prices, increasing prices for goods, metals, and energy, the supply chain for manufacturing goods was impacted, causing bottlenecks and delays, and trade flow uncertainty increased [9, 10, 11].

Supply chain disruptions have raised challenges for companies such as [6, 7, 8, 9, 10, 11, 12]:

• Labour constrains and capacity.

• Need for increased capacity.

• Shipments delay.

• Reduction of long-dwelling containers.

• Decrease of deal value.

• Decrease of transaction activity.

• Increase of freight rail services.

• Increase of pricing.

Due to challenges, companies need to increase flexibility, efficiency, and productivity while reducing costs to be effective. From 2015 to 2050, it is expected a global trade growth in volume by four times, while the value of goods transported increased up to US$68.5 trillion [12], for which it is necessary to identify drivers impacting the transport and logistics industry for the next years, such as global uncertainty, digitalization, innovation in technology, talent, and new skills required, costs, transparency, and sustainability, as well as global uncertainty, causing disruption in supply chain and business models. These drivers will be identified across the industry and best practices through a set of trends, which are addressed in the next section.

2.2 Transport and logistics over time

Transport and logistics have transformed over time, and big changes can be tracked across big globalization waves, as shown in Table 1.

Wave	Logistics	Transport
First wave (Manufacturing Era)	Export of goods. Opening of new markets. Increase of manufacturing exports.	Cost reduction. Bulk ships and liners. Use of steamships and trains as a main transport mode.
Second wave (Communication Era)	Lean thinking. Just-In-Time and Kanban. Postponement. Marketing Mix: Price, Product, Place, and Promotion. Integrated Logistics Management.	Car and planes were born. Use of trucks. Free trade vehicles. Increase of physical distribution importance. Industrial tariffs. Limited scale shipping. High-speed rail.
Third wave (Technology Era)	Cross-Docking. Quick Response. Outsourcing (BPO) and Co-Sourcing. Agility. Radio-Frequency Identification (RFID). Computer-Aided Dispatching. Collaborative Planning, Forecasting and Replenishment (CPFR). Vendor Managed Inventory. E-commerce and internet. SCM enterprise-wide integration.	Geographic Information Systems (GIS). Centralized Tariff Control (CTC). Large-scale air cargo. Transport networks. Electric and Hybrid cars.
Fourth wave (Digital and Information Economy Era)	Lead by digital practices Industry 4.0 Nearshoring practices Workforce collaboration Responsible datafication Blockchain Internet of things Distributed infrastructure Digital factories	Global effect of climate change. Clean energy and sustainable technology. Self-driving vehicles. Drones.

Table 1.

Transport and logistics across globalization waves [6, 7, 8, 9, 10, 18].

Transport and logistics industry has crossed across time, enabled by globalization, connecting countries and economies to improve people’s welfare through products and services; however, due to climate change, there are new technologies changing and reshaping the world, as shown in Table 1, which are part of the forces transforming transport and logistics into sustainable systems.

2.3 Climate change and sustainable development goals

Climate change is leading businesses through sustainable practices because of long-term shifts in weather patterns and temperatures. Moreover, according to the 27th Annual CEO Survey from PwC, many companies are looking to reinvent themselves, and they believe that they would not be viable in 10 years if they continue moving across the same path due to technology, change in customer preferences, government regulations, competitor actions, supply chain instability, and climate change; moreover, according to PwC, among 55% of the global Gross Domestic Product (GDP) is moderately or highly dependent on nature [8]. Among the initiatives they are focusing to face these challenges are [8, 9, 10]:

2.3.1 Climate risk, adaptation, and resilience

Looking for different ways to mitigate climate risk, while increasing business resilience, identifying and focusing on the right outcomes to create competitive advantage with compliance and long-term value.

2.3.2 Sustainable development goals (SDGs)

Goals adopted by United Nations Member States in 2015, which are working in partnerships to create peace and prosperity for people and the planet. In terms of business, they need to align with the SDGs to help countries achieve their goals through the supply chain impact, future strategy impact, awareness, prioritization, measurement (SDG Strategy Analytics), and reporting.

2.3.3 Energy solutions

Business are working to reduce Green House Gas (GHG) to reach a net zero compliant economy, changing the way they use energy, prioritization of decarbonization, digitization of processes, reducing emissions and costs through efficiency and energy saving, and mitigating risks while creating value.

2.3.4 Net zero transformation

Since every business and industry is different, they are tailoring and targeting solutions to reduce carbon emissions by starting from strategic points, transforming the business, assessing the value chain and decarbonization, as well as increasing transparency in legal and regulatory compliance.

2.3.5 Investing with impact

Every change implies challenges, and this is no exception, so they need to consider the Environmental, Social, and Governance (ESG) impact when investing, trying to mitigate risks and reduce negative outcomes for people, planned, stakeholders, and contribute with positive change. Since investors, shareholders, and other stakeholders are expecting businesses to pursue sustainability, companies are focusing on implementing strategies aligned to green taxes and incentive trackers, building trust through transparency and holistic thinking, sustainability assurance, and reporting.

In the last SDG Report from 2023, the United Nations stated that climate action (Goal 13) requires taking urgent intervention to mitigate climate change and its impacts, and GHG emissions need to be reduced in all sectors, which requires [11]:

• Goal 6 Clean water and sanitation: Sector-wide investment and capacity-building need to be increased since there is water stress and scarcity.

• Goal 7 Affordable and clean energy: Renewable energy needs to be done because currently, renewable sources power nearly 30% of energy consumption.

• Goal 9 Industry innovation and infrastructure: Reduce global carbon dioxide emissions from energy combustion and industrial processes.

• Goal 12 Responsible Consumption and Production: Implement policies that support shifts to sustainable practices that allow the decoupling of economic growth from the use of resources.

• Goal 17 Partnerships for the Goals: Developing countries are requiring necessary financing and technologies to accelerate the SDGs implementation.

Even though there are 17 SDGs, there were highlighted those related with Climate Change, but all of them are important and need to be addressed.

3. Methodology

The world is changing, and businesses and the way they manage their value chain are being impacted by technology, globalization, climate change, competence, and international and local regulations. So, this research was carried out by reviewing three main sources: Literature, industry best practices, and case studies (Figure 4).

Figure 4.

Research methodology.

Each component of the analysis was made up as follows:

• Literature Review: The understanding of logistics and transport require the knowledge of what it is, how it is done, and what are some current trends driving those changes, such as the climate change and the sustainable development goals (SDG), which were considered to analyze the trends moving logistics and transport.

• Best practices: Every industry is currently led by some trends, and transport and logistics is no exception, because of which, as part of them, it is included as part of the results best practices aligned to digitalization, business transformation, transport and logistics, industry, and logistics 4.0.

• Case studies: Finally, by analyzing the literature and the best practices, some case studies were reviewed as part of own experience in projects related to logistics transformation, logistics and supply chain, and logistics and digitalization, so it can be seen how all trends are reshaping the industry.

4. Transportation and logistics trends

Based on the global market and the issues for the industry, there are some important trends in transport and logistics industry, which are [11, 12, 13, 14]:

• Sustainable funding mechanisms and transparency.

• Adoption of electric vehicles.

• Transportation systems modernization.

• Resilient transportation networks.

• Digital and technological innovation.

• Use of blockchain platforms.

• Global uncertainty.

• Talent new skills.

• Growth of e-commerce.

• Green 3PL.

• Changes in regulations, laws, policies, and tax regulations.

• Market risk from interest and exchange rates.

• Fraud and corruption.

• Emerging transportation concepts.

• Slowdown in economy.

Trends can be seen from the more strategic impact to the most operative, and they can be classified as shown in Figure 5.

Figure 5.

Transport and logistics trends.

4.1 Global trade

International trade is impacting highly on all markets and industries, in land transports from China to the European Union (EU), and it is expected to be intensified due to many factors such as pandemic results, war, political stability, and overall leading economies. There is expected growth in the transport corridors between China and the EU through the Road and Belt Initiative and other emerging economies in the next few years, which will lead to lower transportation costs and the creation of new services. Among the opportunities that are being leveraged by this trend are:

• Trade cost and investment reduction can be achieved by using emerging trade routes such as the Belt and Road Initiative corridors between China and Europe.

• Infrastructure modernization and hubs located across main transport corridors.

• Increase accessibility to new business areas due to low logistics costs.

• New trade agreements across routes.

• Emerging market trade flows that allow scaled services offerings.

• Supply chain strategy adjustment to benefit from delivery time and cost reduction.

• Trends leveraged by companies are mainly related to [15]:

• Transportation infrastructure investments: To improve efficiency and effectiveness of logistics processes, reduce transit times and reduce, as a consequence, delivery time.

• New cross-border services: To reduce costs inside countries to impact overall costs of delivery. Companies are looking to leverage transport fleets with the increasing volumes between China and EU.

4.2 Market’s domestic commerce

Domestic commerce involves within-border transactions of a company, either sales or buying of goods and/or services that can be delivered online or physically [16]. Domestic commerce for companies is increasing across regions, through various levels of optimization, transportation, and logistics, which helps them to create a shared economy and value-chain integrations between the focal firm, the producers, the consumers, and Third-Party Logistics (3PL) companies. However, the first step of integration is to comply with local regulations, satisfy customers’ needs and have capabilities to compete with local market players. Hence, it is important to leverage the use of best practices like e-commerce to plan and create strategic alliances to satisfy the market with low costs. Among the solutions used as part of the market’s domestic commerce trends are [17, 18, 19, 20]:

• E-commerce in big business [17]: Big companies are using e-commerce to reduce costs and time to market and integrate the supply chain while increasing profits. Some big companies are looking towards opportunities to offer their products online through different product categories such as Incubation (products with low or medium levels of growth and occurrence of exceptional periods, such as groceries and health and beauty), growth (products that can increase growth rate significantly, such as fashion, electronics, household equipment, and furniture and decoration), slowdown (those whose growth rate is below the level achieved in growth phase, such as e-books and travelling), and saturation (for goods with very low level of growth and high maturity of online channel).

• E-commerce used in logistics [18]: Companies are investing in e-commerce to manage customer orders and suppliers’ deliveries, connecting processes to manage inbound logistics, production, outbound logistics, and marketing and sales, reducing costs while improving the company’s performance and operations. It is expected that e-commerce businesses will invest in logistics in the longer term to seek possibilities to close value chains.

• Courier, Express and Parcel [19]: The use of 3PL companies (CEP) focused on the 80% of customers with 20% of the revenue helps to manage the 20% of customers with 80% of revenue, increasing the value performance, efficiency, and effectiveness to compete in local markets. CEP companies will need to design tailor-made solutions for e-commerce over longer-term due to omnichannel sales, taking into account factors like delivering options offered, ability to pick up at a location, return policies, delivery speed, retailer reputation, product selection, consumer/peer reviews, and detailed product information.

• Economy solutions [20]: Use of collaborative logistics to optimize the management of transportation, warehousing, and supply chain with other companies to reduce costs and respond to customer pressures. An example of this practice is the consolidation of logistics. The sharing economy is being implemented in supply chain management, road transport, and freight forwarding.

4.3 Digitalization

Digitalization is a substantial change that is changing all industries, and it is expected to reshape businesses. However, it is important to have a clear definition of digitalization, which can be defined as a framework used to exploit digital opportunities through a transformation process – used to restructure economies, institutions, and society on a system level – and technologies – such as big data, sensors, 3D printing, etc. – to create, propose and capture value in the business to be offered to future customers [21]. Digitalization offers value, allowing business to adapt to changes through resilience, dynamic capability, transition models, and increased competitiveness in the market. To maximize digital value, it is important to consider the elements in Figure 6, which will help businesses to be prepared to take advantage of opportunities like:

• Simplified internal process.

• Digital reach to final customers.

• Online sales and marketing.

• Talent supply gaps.

• Cost reduction.

• Risk reduction (such as risk related to online payments).

• Client needs addressing.

• Increased revenues.

Figure 6.

Digitalization components.

Elements in Figure 6, are related to:

• Business vision [22]: Focus on what business want to achieve to increase integration, such as value-chain integration, customer access, sales, channels and marketing, vertical value-chain integration, overall digitalization, product development and engineering, digital business models, and product service portfolio. It will provide new business models, transaction types, marketplaces, and services offering as revenue sources, since digitalization is not only the implementation of information and communication technologies but also a framework to add value to business and impact customers.

• Framework [23]: As part of a digital transformation and digitalization, it is required a set of processes that helps to address changes in a systematic way, so it is necessary to consider project management practices (such as agile or predictive project management implementation), a project lifecycle (that allows to make decision and change on time), change management practices (to align people with business perspectives and vision and reduce change barriers), and a commitment from high-level management.

• Enablers [24]: Identify and align with the business vision the needs required to achieve strategic objectives regarding processes, technology, structure, and people. In terms of technology, most of the main enablers used in transport and logistics industry are related to technologies like e-commerce, Intelligent Transportation Systems (ITS), Robotics Process Automation (RPA), Predictive maintenance, drone supervision, Blockchain (DLT), Artificial Intelligence (AI), Analytics, Augmented Reality (AR), and/or Virtual Reality (VR), among others.

• Key Performance Indicators [25]: Known as Key Performance Indicators (KPI), they need to be considered to measure value realization and effectiveness of digitalization. Most of the KPIs used as part of digitalization initiatives for the business case are Net Present Value (NPV), Return on Investment (ROI), Payback Period (PBP), Earned Value (EV), cost indicators (how much is the investment in resources), time indicators (how long it takes), effectiveness (how well we do it at the first time in compliance with the objectives), and efficiency indicators (how well we use sources).

4.4 Enterprise-software-driven process

Software can be defined widely as a piece of a computer programmed used to execute determined activities or for a specific purpose [25]. An enterprise is an organization involving people or entities working together to achieve common goals (Ibid.). Enterprise software can be defined as a set of computer programmes integrated to add value to the business without human intervention in the middle [20]. Among specific trends related to transport and logistics, companies are looking for the implementation on software focused on [1, 20, 26, 27, 28, 29, 30, 31]:

• Warehouse Management System [26]: Known as WMS, its purpose is to support logistics operations through management of inventory, distribution centres, and supply capacity from the reception or production to the endpoint of supply.

• Supply Chain Management System [27]: This is an enterprise software known as SCM and includes the management of the overall supply chain, including manufacturing, inventory, sales, points of sales (POS), purchasing, and distribution.

• Transportation Management System [28]: Also known as TMS, it is used with the purpose of optimize freight and gathering information to control fleet conditions and efficiency.

• Customer Relationship Management [29]: This enterprise system involves the management of customer/consumer relationships such as the tracking and management of customer data, customer master data, customer scoring, customer feedback, customer insights, and customer recommendations.

• Enterprise Resource Planning [20]: An ERP system is the core enterprise software for any company, which records any transaction impacting the company, including financial and accounting, production, sales, and marketing, human resources, reporting, and inventory records.

• Toll Collection [1]: Focused on automatically collecting tolls from vehicles moving through roads, highways, or tunnels to save time and costs related to collections.

• Parking Guidance [1]: Solution based on real-time data whose purpose is to inform drivers where they can park their cars and as a result, improve transport smoothing and congestion in a convenient way.

• Public transportation [1]: Used to gather and analyze data to adjust operations to the needs of the citizens to enable greater efficiency and less congested roads.

• Traffic management [1]: Some of the reasons this technology is implemented are related to increasing transportation network efficiency through real-time information, synchronization of traffic lights, and assignment of street space dynamically.

• Data collection [1]: Implemented to analyze movement and traffic using big data to dynamically react to changing situations when unexpected events happen on the road.

• Integration and Operational Software [30]: There are different capabilities of software such as Robotics Process Automation (RPA), Blockchain (DLT), and Artificial Intelligence (AI). RPA can be used to integrate the different systems across the company. It is a based-rule software that can help to automate processes (with multiple activities) to reduce human intervention with low code automation, depending on the supplier, to support business activities. Another software is Blockchain, which increases end-to-end security and privacy, efficiency through reduced documentation processes, transparency, and reliability. AI is an umbrella of solutions that can reshape operations. Traffic and networks, which can be managed by using assisted intelligence, automation, augmented intelligence, and autonomous intelligence, depending on business needs.

• Maintenance Solutions [31]: The Maintenance Management System (MMS) helps companies with cost reduction, improvement in service quality, positive employee impact and Corporate Social Responsibility (CSR) and environmental issues by managing the predictive maintenance to reduce downtime and use the equipment without breaks, stabilizing delivery times to ensure all of the companies’ fleet is available and ready to be scheduled, reacting to problems with equipment, and increasing positive impact of maintenance on environment and waste management. This software usually is connected to the ERP or the SCM system.

4.5 Machine-driven process

Machine-driven processes are those related to warehousing, mobility, rail, and those processes involved in the core operations of a third-party logistics (3PL) company. Some of the benefits of machine-driven core processes are related to the increase of efficiency of deliveries and warehousing, but it is required technology to achieve those objectives. Some of the solutions involved in this trend are [1, 2, 3, 32, 33, 34, 35]:

• Warehousing robotization [32]: Robotization is the use of physical robots in logistics to handle warehouse materials, including the use of drones. Among applications of robotization in warehousing are product quality check, sorting, intra-warehouse transport, picking, cargo, loading and unloading, and delivery. These solutions help to plan and reduce costs and make decisions, depending on the company objectives.

• Electromobility [33]: Solution used to moderate the impact on transport, warehousing infrastructure, and road transport in the long term to reduce costs. It implies the use of electric-powered vehicles to reduce the environmental hazards resulting from excess fossil fuels burnt that leads to emission restrictions, fines/penalties.

• Warehousing support with AR/VR [34]: Solutions focused on the implementation of devices of augmented reality and mixed reality to improve effectiveness in supply chain management for loading and unloading of materials, order picking, intra-warehouse transporting, security, information handling, information display, complex layout visualization, training, workflow simulation, remote repairs and maintenance, portable control panel, and off-site workstation.

• High-speed rail [1, 2, 3]: Solution whose main objective is to reduce time and costs related to the transport of people.

• Last mile delivery optimization [1, 2, 3]: These solutions are focused on companies whose main activities are from postal and Courier, Express, and Parcel (CEP) segment) and it is focused on reducing costs while optimized delivery times.

5. Discussion

5.1 Supply chain transformation case study

Through the years, the company had organic growth, as well as acquisitions (inorganic growth), increasing complexity, disparate functional and regional silos, as well as different set of optimized processes. The business challenge was to implement a global ERP system, combining a single global process of demand planning.

Business requirements were complex and required an enterprise-wide supply chain transformation, which was fulfilled by using the following approach:

• Enterprise design focused on the main major business clients and geographies (20%), which represented 80% of common core processes.

• Re-usable project plans and business processes.

• Consolidated product lines into a single set of business processes used as the foundation for business transformation.

• Supply chain processes are implemented in different countries: the United States, Canada, the UK, Ireland, the Netherlands, and Belgium.

• Re-engineering and implementation of demand planning and forecasting processes, as well as, inventory planning, supply planning, production planning, transportation planning, and logistics execution.

• Artificial Intelligence implementation for customer centricity.

• As a result of the ERP implementation and process optimization across overall organization, it was obtained the following benefits:

• Complex enterprise-wide business transformation.

• Increased integration between business units and momentum, enabled by a unified corporate culture.

• Consistent supply chain processes and technology for customers and suppliers.

• Operating model based on IT best practices to excel organization capabilities.

• Customer centricity and consistency increased, service levels increased, and reduction of costs.

• Smart logistics flows allowed a connected supply chain ecosystem.

• Closed loop for integrated planning, digital procurement, and improvement of product development.

• Planning the retirement of over 700 legacy IT systems.

• This case of study was driven by technology, having an indirect impact in climate change because of improvement operations, consolidation, and connectivity among countries, which is one of the big benefits of the current transformation trends from Figure 2.

• Global trade.

• Market’s domestic.

• Digitalization.

• Enterprise Driven Software.

5.2 Environmental footprint reduction

A sportswear company recognized globally wanted to understand and track its environmental impact through its value chain. The company wanted technology to understand the impact drivers, the consequences of actions related to impact mitigation, and capabilities to cascade targets across business areas. They had implemented a track record for innovative sustainable products, being a recognized leader focused on sustainability; however, they need to improve the sustainable business model to track its performance against past years and targets.

Based on the business requirements, it was designed and built a transparent, fully customizable, and interactive footprint tool, was integrated into the legacy Information Technology (IT) infrastructure with the following characteristics:

• A detailed and comprehensive environmental footprint through a natural capital evaluation approach is used to set a monetary value for the impact on society and the environment so the targets can be measured quantitatively.

• Sourced data on the environmental impact of cradle to grave the impact of key materials, processes, logistics, and consumer behaviors.

• Data adaptation according to the geographic regions of the business.

• The driver for this company was the environmental impact of their operations, with the following benefits:

• Performance track against past years.

• Continuous tracking of their corporate sustainability performance.

• Confidence in using its environmental footprint to set future business targets.

• Continuous measurement tracking of its performance to understand the consequences of its actions.

• This company was focused on a decarbonization strategy to reduce its impact on climate change, but it also transformed and executed processes related to data and technology, which helps to understand how it is working in the digital and information economy era and how it can be used to improve business performance through the digitalization trend.

5.3 Net zero emissions

Business was looking for an aligned roadmap to its strategy to deliver its public commitment for Net Zero emissions as part of its Vision, ambition and targets, decarbonization strategy, and business transformation. This company has over 150,000 employees over 120 countries, which made a complex transformation process to continue being a leading company in the “post-carbon” era. To achieve this goal, a roadmap for the comprehensive Net Zero strategy was required, along with hands-on transformation support and upskilling the business.

The implemented approach was based on the understanding of the strategic business direction, maturity, and baseline for which it was carried out:

• Maturity assessment with a Net Zero framework will be used to build the new strategy.

• Benchmarking against leading peers based on Net Zero transformation practices.

• Set up tools and methodologies to baseline Scope 1 (Direct emissions owned or controlled by the company), Scope 2 and Scope 3 emissions (Indirect emissions consequence of the company’s activities which come from sources not owned or controlled by the organization).

• Implementation of bespoke cloud-based carbon reduction tracker and carbon calculator to report and measure on carbon reduction.

• Staff upskilling to identify, generate and execute on carbon reduction.

• Strategy execution brought benefits not only related to decarbonization but also created different impacts across business, such as:

• Net Zero strategy that led to strengthened market leadership.

• Carbon reduction projects on Scope 1 and Scope 2.

• Baselined Supply Chain Spend across Tier 1 to Tier 3 and developed calculation methodologies and templates of product sales.

• Development of a Task Force on Climate-Related Financial Disclosures (TCFD) across over 900 locations, identifying transition risks and opportunities.

• Embedded information governance architecture, automating Key Performance Indicators (KPIs) and correcting auditing findings.

• Upskilled teams across the business to deliver Net Zero transformation.

• Improvement of Earnings Before Interest and Taxes (EBIT) to fund transformation.

• Transformation of Supply chain and procurement, Operations & Logistics, commercial, people, and culture, data and technology, and Backoffice processes.

• Clear roles and responsibilities for People (Social) and Principle (Governance) related to Net Zero Emissions (Environmental).

In this case study, it can be seen the concurrence of all the trends in Figure 5 (Global Trade, Market’s Domestic Commerce, Digitalization, Machine-Driven Processes, and Software Driven Processes), even though it was strategically focused on decarbonization, helping the company to reduce costs because of the overall impact across the operations.

6. Conclusion

Transport and logistics companies are being impacted in the post-pandemic world, but it is not the only challenge they are facing, since there are other factors impacting their operations, so they need to be more strategic in their investments. Hence, depending on the business’s strategic objectives and vision, companies need to identify the best practices aligned with their needs to add value to the final customer through the strategic, financial, operational, legal, regulatory, and compliance areas. There is no one solution, since every option needs to be adapted to the business needs. It means that even the five big trends identified are classified as global trade, market’s domestic commerce, digitalization, enterprise-software-driven processes, or machine-driven processes, every company need to assess what is its current state and identify gaps to achieve future state to implement what is best for the business, identifying capabilities related to process, technology, people, and organizational structure to add value to the final customers by leveraging on the current capabilities while developing skills and competencies for the future state and achieve competitive advantage. Moreover, through the cases of study, it can be stated that these trends lead to the value creation for the business, and they are linked to one another, improving efficiency, effectiveness, and productivity, but also, they are focusing on reducing climate change, which is one of the current business imperatives, as for logistics as for any other industry.