4 Ways Product Movement Has Transformed in the Automotive Industry

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Toward the end of 2022, Deloitte released a report exploring the transport industry's future. The report describes how the sudden rise of e-commerce, catalyzed by the outbreak of COVID-19, has placed enormous strain on global supply chains in the past few years.

But amid other ongoing challenges and seismic shifts, it notes, are opportunities for meaningful and long-term transformation. 

How Is Product Movement Changing in 2023?

The freight forwarding market, sized at $192.5 billion in 2021, is expected to hit $285 billion by 2031. As the market grows, here's how the automotive sector is evolving. 

1. A Rise in Reshoring and Nearshoring 

To mitigate supply chain disruptions and the inflationary impact on the cost of goods, many organizations are looking to reshore and nearshore their operations. 

If this trend continues as expected, there will be countless opportunities for new competitors in the transportation industry to enter the market. Indeed, the Reshoring Initiative’s 2022 Data Report estimates that more than 1.6 million jobs have been created since 2010 due to reshoring.  

2. Investments in Data Analytics 

Deloitte survey respondents said that adopting a more robust approach to data management is increasingly critical, providing visibility into end-to-end logistics, customer relationship management, demand planning, and workforce management. For example, supply chain data can uncover weak links in the chain, while predictive analytics can be used as a forecasting tool for consumer demand and potential disruptions. 

To achieve this improved transparency, many organizations are leveraging the expertise of startups and cloud services providers rather than hiring in-house data scientists. 

3. A Rise in Electric Vehicles (EVs) and Autonomous Vehicles (AVs)

To manage costs, drive sustainability, address driver shortages, gain real-time insights, and improve brand reputation, players in the transportation industry are investing in EVs and AVs. For example, the global electric truck market reached $728 million in 2020 and is anticipated to reach $11 billion by 2032

In time, the increasingly lean and tech-focused transportation companies may opt to outsource their fleet management to the OEMs producing EVs and AVs. 

4. Cross-Company Collaboration

The digitization of the transportation industry means organizations are implementing products and technologies that are transforming their day-to-day operations. 

For example, the Internet of Things (IoT) enables real-time monitoring of inventory and shipments, machine learning (ML) helps with route optimization, and blockchain improves transparency for the end customer. To reap the full benefits of these technologies, organizations must share things like shipping schedules or warehouse space with their competitors much more readily than before. 

As such, forward-thinking leaders in the transportation industry are identifying collaboration opportunities and forging non-traditional relationships to maximize the value gained from digital transformation. 

Discover More Supply Chain Insights and Trends 

Image Credit: Gorodenkoff / Shutterstock.com

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