In this decade, transport logistics will change more than ever since introduction of motorised road transport. We are facing two big challenges – the price of fossil fuels is getting higher and higher and the labor shortage is worsening. In practice, we are in a situation where transportation as we have learned is no longer possible. There is no going back, but these changes should not be seen as problems but as opportunities.
The war in Ukraine has accelerated the transition away from fossil fuels towards low-emission fuels while increasing the prices of traditional fuels. Fortunately, at the same time, Finland has already largely switched to carbon-free energy sources such as nuclear power, hydropower and wind energy, and now, lastly, solar energy. According to forecasts, Finland will become an energy exporter within ten years, which means a huge breakthrough for our country’s economic structure.
The energy transition also affects the transport sector. The prices of traditional fossil fuels continue to rise, and there is no going back to cheap diesel. It is now necessary for every transport logistics company to review its dependence on fossil fuels, make assessments of alternative fuels, be they bio-based, hydrogen-based or electricity. How exactly should my company prepare for the rise in the price of fossil fuels? Can we move road shipments to the rail? Or is it the case that with the help of emissions trading, we invest in a completely different sector, and with the emission rights we receive, we continue to operate with fossil fuels? The very first thing to do is to add a fuel clause to the transport contracts, which transfers the rising fuel costs to be paid by the customer, i.e. the party who buys the transport.
An even more acute issue shaking the industry is the labor shortage in the industry. Up until now, digitalization in logistics has largely only been about making things more efficient, paperless and information flow, but traffic automation is only at an experimental stage. Now we are moving into a phase where automation is taken as a solution to the labor shortage.
In fact, automation already works as human help, e.g. in route planning, automatic driving part of the time and observing the environment and the state of the fleet, but gradually it increases more and more. This means that those companies that already have the ability and resources to reduce labor costs through automation will be successful. However, people will also be needed in the future in other jobs in the industry. Developing technology will bring new tasks and roles to the industry in planning, control and development.
The future is here today. Now if ever, companies in the transportation logistics industry must make significant changes in their energy and workforce solutions to remain competitive at the end of this decade.
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The article was previously published on the website of Finnish Association of Purchasing and Logistics LOGY ry on May 5, 2023 in Finnish.
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