Growth drivers and challenges in the transportation and logistics sector

The growing interdependence of the global economy is leading to an increasing demand for transportation and logistics services. Companies in the transportation and logistics sector have to deal with many challenges.

Growth in e-commerce: Demand resulting from online orders is increasing rapidly. This is putting pressure on existing supply chains to find faster and more flexible solutions. These developments call for entirely new supply chains.  

On-demand processes: Accelerated and closely interlinked economic activities demand immediate availability of products and services. Disruptions to supply chains show the vulnerability of existing models and call for a rethink.

Geopolitical conflicts: Political tensions, trade wars and sanctions disrupt global supply chains, lead to delays and massively reduce planning reliability.

Sustainability and the extension of economic chains: Recycling and sustainable business practices extend traditional supply chains. Sustainability requirements focus on the supply chain itself as well as logistics performance. 

Lack of deregulation: A constantly growing number of regulatory requirements from national and international regulations are placing an increasing burden on companies.  

Intensifying competition: Asian suppliers in particular are putting pressure on the markets, leading to an increased pace of innovation.

Market concentration: Big players and niche providers dominate the market, while smaller companies fight for visibility.

The e-commerce boom and competitive pressure require fast, flexible supply chains. Intelligent automation and sustainable processes ensure competitiveness.

Michael Esser
Partner, German CPA, Tax Advisor

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Michael Esser

Partner

German CPA, Certified Tax Advisor

Christian Hensell

Partner

Attorney-at-Law (Rechtsanwalt), Certified Tax Advisor, Specialist lawyer for Tax Law

Oliver Pegelow

Partner

German CPA, Certified Tax Advisor

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Changing freight costs: trends and challenges from 2024 to 2030

Due to increasing environmental and sustainability regulations, transport and logistics companies need to invest quickly in low-emission technologies and actively promote transparent supply chain solutions.

Thorsten Lorenzen
Partner

The development of freight costs from 2024 to 2030 will be influenced by several factors that affect both regional and global trends:

  1. General cost pressure: Rising operating costs due to higher fuel prices, emissions certificates, tolls, regulatory requirements and staff shortages are driving up freight costs, particularly in road freight transport. At the same time, it is expected that competition could lead to price negotiations that partially slow down the increase in costs.  
  2. Sustainability and electrification: In Europe in particular, logistics companies are striving to reduce their CO₂ emissions. Investments in alternative drive systems, such as electric and hydrogen trucks, are supposed to reduce operating costs in the long term, although these technologies will only have a significant impact towards the end of the decade.
  3. Sea freight: After the enormous price increases during the pandemic, the Middle East conflict and the associated avoidance of the Suez Canal, sea freight rates are expected to remain stable.
  4. Rail freight transport: In Europe, the share of rail transport will be further promoted in order to reduce dependence on road transport. This could lead to long-term savings, as the European Union is investing heavily in this area in order to significantly modernize the infrastructure by 2030.

Cyber security in logistics: protection against digital threats in networked supply chains

Cybersecurity is becoming increasingly important in the logistics sector, as the digitalization and networking of business processes have increased significantly. The complete networking of the supply chain and its vulnerability result in new exposure that poses an increased risk of cyber-attacks. Central areas such as supply chain management, warehouse management systems and automated transport processes are particularly at risk.

Companies in the logistics sector should therefore increasingly rely on the use of AI-based security solutions and comprehensive risk management strategies. These solutions serve to identify potential threats at an early stage and prevent attacks before they can cause major damage. The networking of supply chains also requires closer cooperation and the exchange of security-relevant data between partners in order to secure the entire chain.

In addition to technological measures, employee training is also becoming increasingly important in order to minimize phishing attacks and other threats caused by human error. The challenge for companies is to meet the growing security requirements while maintaining their efficiency.

Increasing digitalization in the logistics industry makes cybersecurity a key issue. Higher security standards are required in order to protect digital systems and supply chains from cyberattacks, particularly through the use of AI-based solutions.

Oliver Pegelow
Partner, Germsn CPA, Tax Advisor

Critical infrastructure: The transportation and traffic sector as a lifeline for society

The “transport and traffic” sector is essential for the modern economy based on the division of labor, as it ensures the mobility of goods and people. It comprises passenger and freight transportation by road, rail, air, inland waterway and sea, including the logistics sector. Globalization has led to a significant increase in international passenger and freight transport, which further increases the importance of this sector. 

In Germany, extensive transportation infrastructures, including 830,000 km of roads, 38,600 km of railways, 7,300 km of inland waterways and 24 main airports, ensure the supply of goods and services to the population and the economy. Disruptions in this area can have far-reaching effects on almost all areas of life, including the economy as well as the rescue and healthcare services. Furthermore, the sector is dependent on the functioning of other areas such as energy supply and information technology, which underlines its importance and need for protection.

Supply Chain Management: recommendations for action

Driving digitalization forward: Companies should invest in technologies such as AI in order to automate their supply chains and make them more transparent. These technologies help to identify bottlenecks at an early stage and manage processes more efficiently.

Integrating sustainability: Companies must integrate environmental and social responsibility into their supply chains in order to comply with current and future regulations such as the German Supply Chain Due Diligence Act (“LkSG”) or CSDDD. This not only promotes compliance, but also a competitive advantage.

Strengthening resilience: By diversifying suppliers (multi-sourcing) and spreading production geographically, companies can react more flexibly to crises. A resilient supply chain reduces the risk of disruptions and ensures agility.
 

Making the most of free trade agreements: Reducing customs duties and facilitating market access

Customs clearance plays a central role in supply chain management, especially in international business processes. Digital customs platforms enable fast and error-free processing, which leads to shorter clearance times and a reduction in costs.

Compliance is crucial: companies must ensure that they always comply with the current customs regulations of the countries to which they export or from which they import. This applies not only to tariff rates, but also to documentation requirements such as proof of origin and safety standards.

The use of free trade agreements can reduce customs duties and facilitate market access. It is therefore important to adapt supply chain strategies to the effect that these agreements can be used effectively.

In addition, companies should also implement strong risk management in order to be able to react quickly to changes in customs regulations that are influenced by geopolitical developments. Regular staff training on customs clearance is also essential in this area in order to understand and correctly implement changes in regulations in a timely manner.

The interplay between customs clearance and supply chain due diligence obligations is the key to compliance: If you have the risks along the supply chain under control and provide clear evidence, you not only master the LkSG’s requirements, but also strengthen your position in a global market.

Christian Hensell
Partner, Attorney-at-Law, Tax Advisor

Efficient warehouse and logistics solutions: Digital opportunities for the future

Due to the increasing demand in e-commerce and growing requirements for faster delivery times, the warehousing and logistics industry is facing considerable challenges. At the same time, factors such as a shortage of skilled workers and increased operating costs are creating additional pressure. Digital technologies such as automated warehouse systems and AI-based inventory management software offer solutions to improve efficiency and transparency. These innovations enable companies to optimally manage inventories, minimize errors and maximize resource utilization, thus creating a decisive competitive edge in an increasingly globalized market.

Logistics in Germany: technological innovations and infrastructure as success factors

The logistics industry in Germany is under pressure to secure its competitiveness, while costs for energy, personnel and infrastructure are rising. Despite these challenges, Germany remains an important logistics hub in Europe. The key to securing this position lies in the modernization of infrastructure and the consistent use of new technologies. In particular, the integration of digital platforms and cloud-based systems enables companies to manage their supply chains more efficiently and react quickly to changing market conditions. Automated warehouse management systems and technologies to optimize the flow of traffic also help to increase efficiency and reduce costs.

Transport and logistics: sustainable mobility, technological innovations and active partnerships as key factors

Sustainable mobility and technological innovations are crucial for the logistics sector’s future. Germany is pursuing ambitious climate targets that aim to decarbonize the transport sector by 2050. This requires an increased use of environmentally friendly means of transportation and drive technologies. In particular, the expansion of rail freight transport and the use of electric and hydrogen trucks are very promising measures to reduce CO₂ emissions in road freight transport.

At the same time, AI also offers considerable potential for increasing efficiency in logistics in this area. AI enables optimized route planning, predictive maintenance and the use of autonomous vehicles. Digital platforms that network different modes of transport can make supply chains more transparent and enable a more flexible response to requirements.

However, through partnerships, lobbying or the development of innovations, the logistics industry can exert pressure on public authorities to create the necessary infrastructure. Furthermore, the industry is also investing in its own infrastructure, such as warehouses, digital networks and transportation technologies, in order to increase efficiency and meet growing demands.

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Shipping and maritime economy: On the course for success with know-how