Arup report highlights future drivers of change in global goods movement

The report emphasises how the transition of energy and industrial materials in the context of nations working to achieve net zero targets will have a significant impact on the future of freight.

Energy products made up 36% of global seaborne trade in 2021, and with seaborne trade making up 80% of global freight, this represents a significant portion of the global movement of goods.

Around 80% of the world’s economy, and 77% of global greenhouse gases, are now covered by a national net zero target. The world’s most traded commodities are agricultural, energy, and metal products – products which are all directly subject to major transformation as a result of committed efforts to tackle climate change and reduce greenhouse gas emissions.

The report unpacks five key shifts that Arup anticipates in the sector:

1. The transition to net zero emissions and the need to transform the management of overconsumption and waste.

2. The need to prioritise resilience against growing environmental, social, and economic risks.

3. The changing nature of global economic powers and the role of different nations in consumption and production.

4. New technology and changes in supply chains, consumer preferences, and retail business models.

5. The energy and industrial materials transition. The fifth shift, centred on the energy transition, is closely related to the first shift, the need to achieve net zero emissions and reduce overconsumption and waste. The report focuses on energy and materials separately due to the direct implications these will have on the goods and volumes that need to be transported in the future.

The report looks at the systems and networks that underpin goods movements beyond transport. It explores the current race towards supply chain optimisation. Scenarios by McKinsey and Company suggest that just one lengthy shock can wipe out 30% to 50% of annual earnings for businesses. Companies are now starting to think about diversifying their sourcing or manufacturing bases, obtaining a greater degree of transparency across their supply chains, and embedding in redundancies – by stockpiling, and identifying alternative pathways for sourcing, processing, and transporting goods.

Trends in manufacturing are shifting too with an increase in reshoring. The report highlights how two in five UK-based small businesses are considering a switch to UK manufacturers as rising shipping costs bite into margins and threaten growth, according to a survey of 750 firms by logistics platform ShipBob.

This report is part of Arup’s wider efforts across transport and logistics to support increased sustainability in the often invisible networks and systems we all depend on.

Arup is currently working with central and local government, asset owners and businesses on a wide range of projects to ensure logistics and freight operations can respond to change in a sustainable way. These include the development of new policies, preparing the business cases for infrastructure changes and then delivering these, and supporting businesses adapt their assets and operations to be more resilient and sustainable.

Arup has been appointed as an independent industry representative for the UK government’s Freight Council, established in 2021 as the first cross-modal freight forum to drive collaboration between government and the freight sector.