The article is part of the report Transportation Market 2024/2025: Conclusions, Forecasts, Challenges. Need more information?
The global transportation industry is undergoing a period of significant transformation, preparing for dynamic changes that are expected to lead to its substantial growth. According to forecasts, the compound annual growth rate (CAGR) is expected to be 5.4%, which will result in a market value of $11.1 trillion by 2030. It should be noted, however, that this growth rate is slower than the rate projected prior to the pandemic, when a rate of 19.8% was anticipated. The sector’s development is driven by modern technologies and sustainability.
More And More AI In Transportation
Technological advances are rapidly transforming the transportation sector. Artificial Intelligence (AI) and automation are playing an increasingly important role in the management of operational processes. According to forecasts, by 2025, AI will have evolved from a tool that supports simple tasks to a technology that enables autonomous decision-making. AI-based tools will allow dynamic route adjustments in real time, depending on road and weather conditions, and enable more efficient scheduling of maintenance activities, reducing downtime. The EU’s transport policies promote digitalization, which accelerates the modernization of transport systems, enhances safety, and promotes sustainability through intelligent transport systems.
However, it is important to note that despite these ambitious goals and reports, the SME sector is lagging significantly behind in terms of innovation development. Instead, their focus remains on efforts to maintain liquidity and withstand the challenges posed by unstable market conditions.
Intelligent transportation systems are playing an increasingly important role in modern logistics, bringing changes to optimize a number of processes. IoT (Internet of Things) technologies enable real-time monitoring of fleets and warehouses, resulting in better utilization of resources and the ability to optimize routes and entire delivery paths. Advanced algorithms in ITS systems now enable the adaptation of transportation plans to changing road and weather conditions. Consequently, participants in supply chains can achieve substantial fuel savings while concurrently reducing CO2 emissions. At the same time, warehouse automation facilitates more efficient inventory management and accurate demand forecasting, thereby minimizing the risk of warehouse shortages and enhancing service quality.
Internet Of Things And Decarbonization
It is evident that the Internet of Things (IoT) is currently driving a significant transformation within the T&L sector, ushering in novel monitoring and asset management capabilities. This trend is projected to persist into 2025 and beyond. Location and diagnostic sensors, mounted on vehicles (as well as in logistics centers), provide detailed data that allows for rapid response in case of irregularities, thereby increasing the security of deliveries. Integration with fleet management systems enables the optimization of routes and the more efficient use of vehicles, leading to a reduction in operating costs and CO2 emissions.
Automating inventory tracking and demand forecasting processes further streamlines supply chains, which is crucial in a rapidly changing business environment.
The transition to zero-emission transportation is gaining momentum in response to the European Union’s ambitious climate goals. Road freight transport currently accounts for about 25% of the EU’s CO2 emissions, making it a key focus area in the decarbonization efforts of the EU. Investments in infrastructure, such as electric vehicle charging stations and hydrogen refueling stations along major transportation corridors, are crucial to the development of cleaner modes of transportation. The European market is seeing an increase in zero-emission truck models, which are proving their worth in regional and urban transportation. These models currently have an operational range of two hundred to four hundred kilometers.
Electric Trucks Too Expensive
Projections for 2025 assume further infrastructure development and an increase in the share of zero-emission vehicles in freight transportation. According to market reports, approximately 10% of new heavy commercial vehicle registrations in the EU are expected to be for zero-emission models, and the network of public charging points for such vehicles is expected to grow to two thousand. Innovative projects such as the electrification of highways with pantographs are also noteworthy. These projects are currently being tested in Germany and Sweden.
A significant challenge persists, however, in the high cost of purchasing zero-emission vehicles, which currently range from two to three times higher than traditional combustion models (depending on the type and model). However, the increasing availability of support programs and the long-term benefits of greater production scale suggest a gradual decline in the long term.
From a regulatory perspective, stricter CO2 emission standards and additional financial incentives for companies investing in zero-emission technologies are expected in 2025. These activities, in combination with technological advancements, are directed towards shaping the future of transportation. The objective is to make it greener, more efficient, and better adapted to the challenges of the modern world and the evolving economy.
Increasingly Common Intermodal
Intermodal transport in the European Union plays a key role in the sustainable development of the transportation sector. It integrates different modes of transport to increase efficiency and reduce emissions. In recent years, there has been growing interest in this segment, driven by EU policies promoting green solutions and the need to optimize supply chains. In 2023, however, the intermodal market in the EU has encountered some challenges.
The global trade slowdown and the ongoing armed conflict in Ukraine had a significant impact on freight dynamics. Entrepreneurs had to adapt to changing conditions, which created a need for increased flexibility and innovative solutions, especially organizational ones (improved planning dynamics, unconventional last-mile delivery operations).
Despite these difficulties, the outlook for the future remains positive. According to forecasts for 2025, intermodal transportation is expected to continue growing in the EU. This growth will be driven by investments in infrastructure, such as the construction of new terminals and the modernization of existing terminals. These investments should increase the capacity and efficiency of transport operations performed. Furthermore, EU initiatives such as the Green Deal will promote the transfer of freight from road to greener modes, including rail and inland waterways.
Careful With Forecasts
However, caution should be exercised in forecasting, as the same slogans have been used repeatedly over the decades, and market changes, especially in the face of a crisis, have been recorded at lower than expected levels each time. It is also important to acknowledge that the advancement of intermodal transportation contributes to the EU’s climate objectives, leading to a reduction in greenhouse gas emissions and fostering sustainable development. Therefore, it can be assumed that in 2025, the share of intermodal transport in the total volume of freight will steadily increase, which will positively affect both the image and competitiveness of the European economy.
25%
This is the share of road transport in carbon dioxide emissions in Europe. Investments in intermodal transport (involving rail) and zero-emission trucks are expected to reduce this problem. Today, the primary challenge is the price of new electric vehicles, which is two to three times the cost of purchasing standard trucks.
Source: European Environment Agency
