The 4 trends shaping the European logistics landscape in 2024

Global consumer needs are constantly changing, and at an astonishing pace. In comparison the logistics industry has often been unable to keep up, creating a ‘just-in-time’ model that exacerbates the gap between customer expectations and the reality of outdated supply chains.

Four key trends stand out, which, if logistics providers can capitalise on, will change our sector for the better.

1.?????? The era of trade.com

The era of manual tracking is over - and for good reason.

The advent of digital solutions has allowed logistics providers to increase the visibility, traceability, and efficiency of cargo transport from the beginning of the supply chain to its end. As a result, supply chains are more reliable than ever. Combined with trend forecasting, we have changed how we mitigate the risk of supply chain disruptions or bottlenecks.

This year, markets are already signalling that digital adoption in supply chains is going to gain more speed – at least according to the 41% of businesses surveyed for the Economist Impact and DP World-led Trade in Transition 2024 Report . These businesses are pinning their hopes on technology to enhance supply chain efficiency and resilience, making an almost 30% surge from 29.7% in 2023. That’s why it’s so critical that we invest early in the right digital technology.

DP World’s own supply chain operating software, CARGOES Flow, tracks intermodal shipments from suppliers all the way through to the end customer. This centralises vital information from multiple vendors into a single platform, informing how we react to trade disruption - even when goods are in transit.?Linking these solutions to automated technology, such as the Fetch robots we designed this year to fulfil e-commerce orders in our smart warehouses, increases the volume of goods we can handle and how fast we can process them.

Just recently, we launched our global freight forwarding offering ?and digital solutions were at the heart of this market expansion. Our freight forwarding services can all be accessed through a single digital window that is backed by an integrated Global Services Centre, centralising back-end processes made up of over 500 IT specialists.

This advanced digital ecosystem means customers can track their goods in real time and manage their cargo journey all in one place. Game changing. ?

2.?????? ?Sustainability is the name of the game

Earlier this year, the European Parliament voted to protect consumers from companies making misleading environmental claims – also known as greenwashing. It is also ratifying the European Green deal, which underscores the importance of sustainable supply chain management in reducing our environmental impact while fostering greater resilience.

In this Green Deal, the EU has set out ambitious sustainability regulations, including carbon pricing mechanisms and emission standards. These will no doubt quicken the adoption of environmentally friendly practices and low-carbon technologies – all in a push towards the EU’s ambitious net zero goals. Collaborative initiatives, such as the Clean Air Action Plan and European Green Transport Corridors, further promote innovation and investment in sustainable transport infrastructure.

This regulatory operating framework suggests that sustainability is no longer optional in supply chain management, particularly in Europe.

As a result, logistics companies like us are speeding up more sustainable initiatives, such as the modal shift to rail and water transport, electrification of vehicle fleets, and adoption of alternative fuels. From Southampton and London Gateway to Antwerp and Germany and more, we are already investing in electric vehicle alternatives, and switching to renewable energy to power our operations.

But acting in a silo is not enough. Stakeholder engagement and partnerships will play a crucial role in driving sustainability initiatives across the logistics ecosystem.

At DP World, we are spearheading cross-sector collaboration through global partnerships.?This includes creating a global coalition with the goal of reducing our environmental impact (‘join the move to minus 15’ ), the First Movers Coalition, which advances the most critical, emerging climate technologies by leveraging members' collective purchasing power; founding the Zero Emissions Port Alliance with APM Terminals to electrify port equipment throughout Europe and adhering to the Maersk-McKinney Moller Centre for Zero Carbon Shipping for increased research and investment into the right solutions that will allow our sector to achieve our shared net zero goal.

Ultimately, total integration across industry competitors will become a necessity if our industry is to achieve net zero.?

3.?????? EU trade treaty perks

Logistics providers and their customers will be looking closely at evolving regulatory frameworks in response to geopolitical dynamics and how these influence trade flows.

While the free flow of goods and services for member states within the EU has provided our sector with many opportunities to keep cargo flowing seamlessly across borders, the ongoing trade negotiations from Brexit underscore the importance of staying ‘in the know’ – and remaining agile to change.

This year, the European Union’s docket is weighted by several international trade treaties – all of which will affect how logistics companies can tailor their solutions in Europe and beyond. The EU is expected to start backing beneficial trade treaties with Chile, India, Indonesia, Kenya, Mercosur, Mexico, New Zealand, Singapore, and South Korea, to name a few. These Free Trade Agreements present opportunities for expanding market access and enhancing trade relations beyond the region.

These agreements are bolstered by the widespread adoption of digitalised customs processes, facilitated by initiatives such as the EU Customs Union and Single Window for Trade. These streamline import and export procedures, thus reducing administrative burdens and enhancing supply chain efficiency. Plus, thanks to the introduction of Digital Identity Wallets, anchored by the eIDAS 2.0 Regulatory Framework for Digital Identity, we are creating a marketplace that facilitates compatibility between businesses – making market expansion and collaboration easier than ever before.

4.?????? Reimagined, more resilient trade networks

In an evolving geopolitical and economic landscape, where the echoes of the Covid-19 pandemic still rage on, this year European companies will be reshuffling their supply chains to better anticipate disruptions.

According to our Trade in Transition 2024 report , 41% of European businesses are friendshoring, 31% are establishing parallel supply chains and 26% are expanding into neutral markets. These trends are all driven by a desire to lower transport costs and reduce supply chain disruptions amidst heightened geopolitical risk. Meanwhile, a third of businesses are opting for fewer suppliers, marking a 22% increase from the previous year.

This trend towards consolidation is driven by a desire to reduce supply disruptions, even as businesses grapple with the trade-offs between diversification and control, and risk management.? Diversification remains the most popular approach to geographical reconfiguration, with 35% of companies using it to build resilient supply chains.?

Navigating the times ahead

The convergence of these four trends will shape the European logistics landscape in 2024 and beyond. While this will present both challenges and opportunities, embracing them all will give logistics providers the confidence needed to drive growth, resilience, and competitiveness: three key factors for creating a sustainable and resilient future for the industry.