06 Feb 2020

FreightTech: The future of logistics

Marc Pisoke
Roland Berger

New digital technologies and disruptive ideas are shaking up the logistics industry – incumbents need to adapt fast

Traditional logistics players have so far been slow to adapt to the FreightTech revolution, allowing newer, disruptive players to take a lead. In this study, we look at the challenges holding incumbents back – and outline what they can do to regain market dominance.

For decades, the logistics value chain has remained the same. An order is received by a freight forwarder, the package is picked up, warehoused, transported, warehoused again and finally delivered to the receiver. But in the past few years, new technologies and ideas in logistics – collectively known as FreightTech – have been shaking up this well-trodden path. In fact, in the next 2 to 5 years, FreightTech applications are expected to disrupt every step of the traditional value chain.

This poses problems for incumbent players who have long relied on the status quo. They must adapt or face being overtaken by new disruptors who have none of their baggage and access to significant funding to invest in new technologies – just look at Amazon, for example.

But of course, it’s not too late for incumbents to act. In this study, we outline the key developments in FreightTech, including what incumbents are doing, look at the hurdles incumbents face in implementing new applications and show how taking an ecosystem-based approach can help them to overcome these.


Key developments in FreightTech

FreightTech applications can be split into three segments: intelligence, automation and integration.


  • Intelligence: The complexity and network-based nature of logistics provide myriad opportunities for data-driven decision-making and optimization. As such, intelligence applications include tools to create, transfer and better analyze data.
  • Automation: Increasing productivity combined with the falling price and longer lifespans of robots are driving the use of robotic systems in logistics. Automation applications are thus largely focused on reducing manual tasks.
  • Integration: Platform models are increasingly popular in logistics but face the problem of integrating multiple stakeholders. So, applications here center on increasing transparency and communication between market players by digitizing processes.


Across the industry, incumbent players are mostly focusing on FreightTech solutions involving platform models, while supporting service providers, such as TIMOCOM and others, offer solutions to aid digitization. Meanwhile, most investor funding is being targeted at intelligence applications, for example, AI tools.


Hurdles to implementation

The European logistics market poses unique FreightTech challenges, being more fragmented, less standardized and more international than other markets. Incumbent players face specific hurdles that prevent the scaling of FreightTech, while also lowering entry barriers for disruptors. For example, high investment in digitization and a lack of trust between players over data sharing.

The result is that start-ups and e-commerce players are currently the leading disruptors in logistics. For example, Amazon is transforming into a full-service logistics company.


How incumbents can adapt

The traditional value chain is on its way out and ecosystems, consisting of the network of organizations involved in the transportation of goods along the entire supply chain, are now at the core of logistics. In order to fully exploit FreightTech opportunities, incumbent players must understand their ecosystem and adapt current business models to cope with the hurdles and challenges of changing market dynamics.

We identify six key elements to maximize FreightTech value-add, from leveraging ecosystem opportunities to identifying relevant technologies and developing data ownership. Their effect is to maximize incumbents’ price level and market share, raise cost efficiencies and support growth opportunities through innovation.


The future of logistics

FreightTech applications in all three segments are key to the shift towards an integrated logistics ecosystem where parcels and containers self-optimize their own routing. We believe players in this future ecosystem will fall under four main categories: Aggregating meta-platforms; integrating logistics platforms; next-generation asset operators; and network specialists. Incumbents must decide on their role in the future ecosystem now, as only players who make the right investments today can be leaders of the future.






Supply chain E-learning

Explore available supply chain e-learning modules by language and academy

News & Trends

Last update 7 Feb 2021
Global manufacturing upturn slows at start of 2021 as supply chain pressures continue to build
   Source: J.P.Morgan Global Manufacturing PMI   -  IHS Markit

Chemicals & Pharmaceuticals

Even industries driven by the strictest safety and environmental regulations are capable of reducing their costs. Our solutions improve each phase of the chemical logistics supply chain, to increase your supply chain performance, improve predictability and mitigate potential problems before they arise. B...

Is Industry 4.0 Technology Worth the Cost?

Industry 4.0 discussions are happening every day across industries. Some organizations are opting to roll out existing and emerging technologies in the hopes that they will see boosts to their ROI that justify the ini...

Six Sigma Green Belt - ASQ Certification
Master Black Belt in Lean CBBL 2nd Level
Six Sigma Green Belt - ASQ Certification
Master Black Belt in Lean CBBL 2nd Level - Live Webinar
Master Green Belt in Lean CGBL 1st Level - Live Webinar

Local & Regional Agenda

Erema: Gaining a competitive edge through preferential exports

Erema, an Austrian manufacturer of recycling systems, uses AEB software to accelerate the proper classification of its components, manage supplier’s declarations, and ensure compliance in its exports. Erema ship...

Integrating Product, In formation and Financial Flows in the Returns Management Process

The strategic importance of managing return goods is gaining attention in the academic literature. Poorly managed processes can impact a company’s brand reputation, sustainability i mpact and profitability. Returns...

International Agenda