2024 will not be a restful year

In our daily work with clients, we see three prominent trends taking center stage: perma-crisis, system convergence, and the twin transition of digitalization and sustainability.

The new normal of perma-crisis

Logistics has always been fast-paced and dynamic. And there have always been crises. What has changed is the rate at which crises occur, their variety, intensity, and global scale. We live in an age of perma-crisis and 2024 will be shaped by logistics players accepting this new normal and looking for ways to come to terms with it.

We see leaders acknowledging the rapidly changing nature of risks and the need for proactive responses. This is reflected in increasing investments in sensing technologies, predictive analytics, scenario planning and business wargaming – all in the name of responding to disruptions more instinctively and adopting more flexible and resilient process and operating models.

An increasingly integrated and consolidated logistics sector will turn its attention towards the wider ecosystem. As players look to transform supplier relationships, we anticipate them opting for more distributed, collaborative, and multi-modal approaches to navigating the challenges and capturing the opportunities of a world in perma-crisis.

Convergence of logistics and energy systems

The transition to sustainable fleets, through decarbonization and the adoption of clean mobility solutions is at the forefront of the green revolution. However, the associated challenges of cost and complexity are substantial.

With rising pressures on the transport and logistics industry to reduce its more than 20% share in global CO2 emissions, we predict a gravitation towards the one sector that increasingly holds the key to a successful green transition: energy and utilities.

We are observing the beginning of this trend in real-time as some organisations embrace a more comprehensive and interconnected outlook that focuses on integrating with energy systems through specific infrastructure, operations, and financing choices. In 2024, we expect this trend to gain further traction.

Collaborating closely with utilities and regulators, logistics leaders will seek to optimize the supply of clean fuels and grid capacities. Operationally and financially, these companies will look to develop ways to meet energy demands more effectively, for example, through optimized charging schedules, and experiment with new funding models – “as-a-service” options – to mitigate the high upfront costs associated with the transition to low-carbon fleets.

Twin transitions in digitalization and sustainability

Like logistics and energy at an industry level, the twin transition of sustainability and digitalization is a convergence of two major domains. Logistics companies in 2024 will refine their abilities to extract benefits from the mingled trajectories of the two.

We will see organisations continue to use technology as a sustainability-enabler, for example, by improving visibility of consumption across the value chain and surfacing opportunities for more energy-efficient operations. Or by optimizing inventories, packaging, cargo routes, last-mile delivery – all in the name of less overstocking and waste, reduced traffic congestion and lower carbon emissions.

Simultaneously, these companies are conscious of the unintended environmental and social consequences of increasing digitalization. IT leaders within the industry will be asked to take a closer look at the energy consumption and waste production of their operations. 2024 will see IT departments and vendors double down on using computing resources more efficiently, managing power and sourcing renewable energy, virtualizing away from clunky, old hardware and handling e-waste responsibly.

Finally, generative AI is a transformative force and will play a part in shaping 2024 across the logistics industry. We will see markets and regulators alike scrambling to gain control of its potential. And we will see further unprecedented advances in the push towards artificial general intelligence.

As optimists who believe in a positive human future, however, we don’t see these advances producing an artificial intelligence that emulates, exceeds, and eventually replaces human intelligence. Rather, we see AI as a force of augmented intelligence that elevates human potential and improves our ability as an industry to bring ingenuity to life and logistics.

This article was first published in Logistics & Transport Focus