The global transportation and logistics industry is navigating a shifting landscape of regulatory changes, trade tensions, and political instability, which pose potential risks to supply chain continuity.
Despite these challenges, industry leaders are focusing on expansion, investment, and strategies to address emerging risks, including climate change, according to a report by Willis, a WTW unit.
The report highlights infrastructure investments as a key business opportunity, with 57% of respondents ranking them among the sector’s most significant growth areas over the next two years.
This includes investments in rail, ports, and airports, as well as the development of facilities and technologies to support the transition to clean energy.
Despite the positives, the sector has also been plagued with challenges, particularly in the US; a recent report from RPS noted that while the broader US economy has gradually rebounded from the impacts of the COVID-19 pandemic, the transportation sector continues to face hurdles, with activity declining over the past 18-24 months.
Regulatory changes, particularly in environmental and cybersecurity requirements, were identified as the top risk by 53% of respondents, reflecting the added complexity and cost of compliance.
Other opportunities outlined in the report include global trade expansion, which 50% of executives see as a key growth driver. The increasing movement of goods across international markets presents new opportunities for logistics companies to expand their services.
Additionally, 44% of respondents cited customer experience enhancements as a focus area, with many firms investing in advanced technologies and personalised services.
Another 44% are looking to enter new markets, with expectations that this will support performance, particularly for businesses closely tied to international trade metrics.
Business interruption was ranked as a top risk by 47% of executives, driven by geopolitical instability, natural disasters, and operational disruptions, all of which can result in delays and loss of customer trust.
Supply chain disruption was highlighted by 37% as a major concern, as increasing interdependencies across global supply chains heighten the impact of trade tensions, tariffs, weather events, and supplier delays.
Cybersecurity was ranked by 34% as a critical risk, with concerns that ransomware attacks could specifically target the sector due to the high costs associated with delays.
The report notes that technology investment is a key risk management strategy, with 55% of executives planning to invest in digital tools to enhance transparency and efficiency. Real-time tracking of assets and cargo, improved weather forecasting, and strengthened cybersecurity measures are seen as essential for building a more resilient logistics sector.
Sustainability remains a major concern, with 61% of respondents identifying it as the industry’s most significant environmental risk. The transportation sector accounts for approximately a quarter of global greenhouse gas emissions and is under pressure to reduce its carbon footprint, despite shifts in climate policy in some countries.
Garret Gaughan (pictured above), global head of direct and facultative at Willis, emphasised the need for firms to stay ahead of cybersecurity threats and demonstrate progress toward climate resilience and sustainability.
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