Since the early steamships and trains of the 1800’s, the modern transportation industry has transformed the movement of materials and individuals and continues to be the driving force behind globalization. The multi-faceted logistics behind air, sea, rail and road transportation is a crucial building block in creating modern day societies, and it is through these tools that mankind has been able to share its advancements across the globe.
Some segments in the industry such as air transportation have gone through difficult times due to a cyclical nature, fluctuating fuel prices and other socio-economic and socio-political events. But, the transportation industry as a whole is healthy and represents many great opportunities to create value for its stakeholders.
The transportation and the logistics markets are closely tied and inseparable. How big is this market? According to the World Bank, the global transportation/logistics market accounts for 60% of all oil consumption, 27% of all energy use, and 23% of world CO2 emissions. According to the United States government, spending in the U.S. transportation market alone in 2014 totaled $1.45 trillion, which was 8.3% of U.S. GDP. No other industry has as big of an impact on an economy as transportation and the industry’s spending levels directly correlate to a nation’s overall economic health. Any increased activity is an indication that better times are coming.
With the adoption of rapid technological advancements across many different segments, we anticipate improved efficiencies and reduced costs, as well as transformation in market expectations, but also increased competitive pressure. Technology and capability integration will profoundly change this industry and those who stay at the forefront will be the leaders.
The sheer size of this market and the critical role it plays in energizing economic activities provides an abundance of opportunities including those considered as adjacent or complimentary. American and European global powerhouses such as the Boeing Company and Airbus Group thrive in supporting the air transportation segment, while Mitsubishi Heavy Industries of Japan and Hyundai Heavy Industries of Korea lead the shipbuilding market. Chinese rail makers CSR and CNR hold the top spots in rail manufacturing, while other players such as Japan’s Kawasaki Heavy Industry, Germany’s Siemens and the U.S.’ General Electric are creating their own high-efficiency locomotives.
The transportation market may appear “overcrowded”. However those with the right vision, aspirations and ability to think differently can profit handsomely despite the presence of so many players.
Markets continue to transform, change, and evolve. At times, disruptors come along and revolutionize the market and its demand landscape. We at DestinHaus believe that by looking at the market from a cross-industry perspective and through the lens of emerging innovations in both equipment and processes, hidden and undiscovered opportunities can be uncovered. From the information value created by IoT applications and cost-savings via automation to the safety and security of remote sensing and tracking, we are entering a world where logistics will seamlessly guide the flow of goods and people will experience a new level of mobility.