The freight system enables access to the goods and resources we rely on for every aspect of our daily lives and our wider economies. Some of the largest infrastructure projects being built across the world today are geared to enhance the movement of freight.

In the UK alone, in 2020 it was estimated that the freight industry contributed £86.5 billion to the country’s economy and was its fifth largest employer. Yet, it is an industry and a system that sees very little integrated, long-term planning and policy. New freight infrastructure investments are rarely an outcome of comprehensive assessments and strategic thinking which aim to align and optimise sustainability and economic goals.

Freight in most parts of the world is largely shaped by the private sector, decisions and planning are heavily fragmented – leading to duplication and optimisation for individual operators, but inefficiencies on a systemwide level. Across the different modes of transport, freight overall accounts for roughly 40% of the transport sector’s global greenhouse gas emissions. Yet, estimates suggest empty trips make up nearly a quarter or more of freight vehicle trips in places such as Europe and the United States (this does not take into account vehicles which are running with loads significantly below their carrying capacity). Reaching high efficiency and maximal use of existing infrastructure requires high visibility across different modes and carriers – for many players in the industry this would require divulging data which is considered sensitive or high value with little incentive or pressure to do so. Standards do not exist and are not enforced in most regions to promote universal usage and planning, and to promote cross-border synchronisation and benefits.

Can the industry prioritise resilience?

New investments and capacity are primarily driven by the desire to capitalise on immediate demand and present-day trends, signalling little foresight for oncoming shifts. Today, this cost and speed-centric paradigm is under challenge by other emerging priorities. The need for greater resilience against physical climate hazards, greater political stability, and the need to address climate change are fast changing political agendas and the movement of investment. In the 1980s there were on average three natural disasters a year in the U.S. that caused damage of over $ 1 billion, this number has risen so quickly that in 2021 alone there were 20 such disasters in one year. Research suggests the trucking industry in North America alone loses $3.8 billion annually due to disruptive events. According to a recent study by McKinsey, since 2017, China, Germany, the United Kingdom, and the United States have reduced the geopolitical distance of their trade by four to ten percent each. Meanwhile, economies of the Association of Southeast Asian Nations, Brazil, and India are trading more both across the geopolitical spectrum and over longer distances. Simultaneously, the number of new global trade restrictions each year has been steadily increasing, from about 650 new restrictions in 2017 to more than 3,000 in 2023.

The costs of narrowly-focused over-optimisation in the freight industry and overlooking the need for resilience are increasingly heavy in a world witnessing major global political, economic, and environmental shifts. In a survey conducted by The Economist Intelligence Unit, scanning over 400 senior supply-chain and procurement executives over multiple sectors across the US and Europe, 54% of executives said their organisations needed to make significant changes to manage forthcoming supply chain disruptions, about 60% said redundancy and resilience was now more important than speed and efficiency.

Government intervention is central to coordination

An effective response to these priorities will require greater focus on long-term and more holistic planning and policy within the freight sector. It requires the attention of high-level government decisionmakers strategizing transport, industry, energy, and urban development to bring down and remould the constraints currently acting as barriers to better planning and greater collaboration in the freight industry.

Quantifying the underused capacity in the industry alone is difficult, most countries lack macrolevel statistics and effective mechanisms and established standards to gather and share reliable data. Achieving emissions reductions in the sector involves coordination across the value chain, from building and maintenance to fuelling and supporting infrastructure. Freight companies often operate with a heavy debt burden and low margins, and without clear incentives or mandates they will continue to be reluctant to invest into unproven technologies or voluntary measures. To enable mode shift onto more sustainable modes of transportation such as rail or inland waterways capacity enhancements will be required, assessments and revisions of contradictory policies and practices which stifle competition for sustainable modes will need to be administered.

Overlooking the need for change and continuing business-as-usual processes for planning and delivering freight capacity entails a high risk for every player in the economy, from industry to retailers and consumers. It threatens significant global and regional economic damage, while risking creating suboptimal major investments, creating major infrastructure in places of high risk for physical climate hazards, and even creating obsolete capacity in the long-term, at a high near-term cost.

Conversely, a recognition of the need for change, with industry and government working towards a common and strategic vision for the future of freight, can enable new opportunities and ensure best value for all forthcoming infrastructure investments.