Peter Langley, Vice President, FedEx Express Australasia explains in this op-ed for MHD the four main trends shaping Australia’s transportation and logistics industry as it significantly expands in 2024.
The transportation and logistics industry serves as the backbone of global e-commerce and business operations, seamlessly connecting the online and offline worlds. In Australia, the industry is poised for significant growth, with projections estimating a rise to USD 94.10 billion in 2024 and further expansion to USD 113.94 billion by 2029[1]. Here, we delve into the prevailing trends shaping the landscape of Australia’s transportation and logistics industry in the year 2024.
- Data-led decision-making drives the industry forward
In the dynamic landscape of Australian business, digital innovation drives steady change. We are seeing an increasing number of companies recognising the importance of investing in data and digital technologies to drive their operations forward. A significant milestone was reached at the beginning of 2023, with 53 per cent of organisations in Australia planning to increase technology spending from 10 to 20 per cent.[2] This surge in investment underscores a strategic shift towards embracing technology as a catalyst for growth and competitiveness.
At FedEx, we have always known the power of the data we have in our hands. In fact, 45 years ago our founder, Fred Smith, said that the information we hold about the package is just as important as the package itself. But it is only with today’s computing power, data analytics, predictive modelling, AI and machine learning, that we are able to fully harness the power of this data, for the good of our company and our customers.
We see more businesses taking advantage of advanced analytics and technologies to support innovation, improve supply chain visibility and predictions and even minimis emissions. The application of advanced technologies to unlock the power of data will become ever more firmly embedded in how transportation and logistics providers empower SMEs to drive their business growth.
- Leveraging Data for Environmental Goals
Operating in a more sustainable manner is both a business imperative and an opportunity to cultivate trust with customers. More than ever before, customers today demand more sustainable products and services [3].
Thanks to advancements in digital solutions, businesses are able to harness data and analytics to monitor and achieve their sustainability objectives. These digital tools can provide businesses with estimates of emissions throughout their supply chains, enabling informed reporting and future planning. By leveraging such solutions, businesses can align with customer expectations for more sustainable products and services and advance their own environmental initiatives.
At FedEx, we have introduced FedEx® Sustainability Insights to provide customers more visibility over the carbon footprint of their eligible shipments with estimates of their CO2 emissions, leveraging FedEx’s network data[4].
- Easier Expansion to New Markets
With the right transportation and logistics provider, expanding into global markets is becoming more accessible for e-commerce businesses looking to grow beyond their local market.
A great starting point for those Australian businesses is taking on the New Zealand market. New Zealand is not only Australia’s closest natural ally but also a strong Trans-Tasman trade partner for small and medium businesses. The Australia New Zealand Closer Economic Relations Trade Agreement and Single economic market has boosted and improved connectivity on the Trans-Tasman trade route may offer fertile ground for businesses to capitalise on the robust cross-border trade partnership between Australia and New Zealand.
Today, businesses can take advantage of improved connectivity on the Trans-Tasman trade lane, facilitated by the FedEx Trans-Tasman service. Currently, this service offers regular flights connecting key cities such as Christchurch, Auckland, Melbourne, and Sydney, providing seamless access to markets and fostering business expansion opportunities.
4.Integration between E-commerce and Transport and Logistics
In today’s digital world, the partnership between e-commerce and transportation and logistics is driving businesses and e-tailers to reach beyond traditional borders. Success now hinges on delivering products quickly and reliably to customers worldwide. Adopting this integration may enable businesses to seize opportunities and navigate challenges in the dynamic marketplace of 2024.
Supply chains are rapidly evolving into smarter, tech-driven ecosystems, revolutionising operations and paving the way for unprecedented transformation in the transportation and logistics sphere. As digital innovation accelerates, businesses should prioritise efficiency, transparency, and global reach to maintain a competitive edge and achieve sustained growth and success in the evolving landscape.
2024 presents a landscape of both challenges and opportunities for the industry. Supply chains are evolving into smarter, tech-driven ecosystems, marking a profound shift in operations. The pace of digital innovation is poised to accelerate, heralding an era of unprecedented transformation in the supply chain and transportation and logistics spheres.
Disclaimer: The information in this article is of general nature only. It is not intended to address circumstances of any specific entity or individual.
[1] Freight & Logistics Market in Australia
[3] McKinsey Consumer Research
[4] https://www.fedex.com/en-au/about/sustainability/carbon-footprint-insights.htm