Arup has launched its Future of Goods Movement report, which outlines the drivers of change in global goods movement and explores how the sector needs to anticipate and plan for the likely changes and shifts in the future of freight.
The report emphasizes how the transition of energy and industrial materials in the context of nations working to achieve net zero targets will have a significant impact on the future of freight. Energy products made up 36% of global seaborne trade in 2021, and with seaborne trade making up 80% of global freight, this represents a significant portion of the global movement of goods.
Around 80% of the world’s economy, and 77% of global greenhouse gases, are now covered by a national net zero target. The world’s most traded commodities are agricultural, energy and metal products – products that are all directly subject to major transformation as a result of committed efforts to tackle climate change and reduce greenhouse gas emissions.
The report unpacks five key shifts that Arup anticipates in the sector. The first is the transition to net zero emissions and the need to transform the management of overconsumption and waste. Secondly, the company highlights the need to prioritize resilience against growing environmental, social and economic risks. Its third point focuses on the changing nature of global economic powers and the role of different nations in consumption and production. The fourth concerns the role of new technology and changes in supply chains, consumer preferences and retail business models, and the fifth shift is centered on the energy and industrial materials transition. This factor is closely related to the first shift, the need to achieve net-zero emissions and reduce overconsumption and waste. The report focuses on energy and materials separately due to the direct implications these will have on the goods and volumes that need to be transported in the future.
The report also looks at the systems and networks that underpin goods movements beyond transportation. It explores the current race toward supply chain optimization. Scenarios by McKinsey and Company suggest that just one lengthy shock can wipe out 30% to 50% of annual earnings for businesses. Companies are reportedly now starting to think about diversifying their sourcing or manufacturing bases, obtaining a greater degree of transparency across their supply chains, and embedding redundancies – by stockpiling and identifying alternative pathways for sourcing, processing and transporting goods.
Trends in manufacturing were found to be shifting too with an increase in reshoring. The report highlights how two in five UK-based small businesses are considering a switch to UK manufacturers as rising shipping costs bite into margins and threaten growth, according to a survey of 750 firms by logistics platform ShipBob.
Alongside this report, Arup has been appointed as an independent industry representative for the UK government’s Freight Council, which was established in 2021 as a cross-modal freight forum to drive collaboration between the government and the freight sector.
John Fagan, UKIMEA transport leader, Arup, said, “At a pivotal time for the ever-changing freight sector, Arup’s report outlines the critical drivers of change that will likely shape the future of freight – a sector which impacts the transport ecosystem, providing the majority of resources which enrich our daily lives.
“With the formation of the UK government’s Freight Council, the UK has created a forum for engagement across all modes of freight and logistics, and an opportunity to embrace the changes and challenges in the movement of goods collectively, working to a longer-term nationwide strategy for goods movement.”
Darren Briggs, logistics and supply chain director at Arup, commented, “Post-pandemic and in the wake of geopolitical tensions and climate change, the actors involved in the movement of goods are all too aware of how unexpected circumstances can wreak havoc in supply chains.
“Arup’s report helps to equip those who keep goods across the globe moving to build futureproof strategies that support the future of freight. In recent years, we have seen a greater spotlight on how we source and move our goods. Planners and logistics operators can’t afford to take for granted systems and processes that have served the sector well previously. There is a real opportunity to innovate and reset in the sector, to get ahead of the challenges that are fast coming down the track.”
Read more key sustainability updates from the parcel and postal technology industry, here.