Strategic priorities for 2025
Strategic priorities for 2025
ALL RESPONDENTS
What are your top strategic priorities for 2025?
The top eight strategic priorities for 2025 cover a wide range of focus. Cost reduction, supply chain digitisation and sustainability initiatives top the list. Enhancing customer service and experience complete the middle of the pack, alongside market expansion and risk management. Driver and talent recruitment and retention, as well as fleet expansion, are additional focuses. These initiatives are all top strategic priorities for 2025.
'Cost reduction' topped the list of strategic priorities for 2025 among all the survey respondents, selected by 61% of them.
It was followed by 'Supply chain digitisation' (51%) and 'Sustainability initiatives' (44%).
Top strategic priorities: shippers will focus more intensely on cost reduction in 2025
SHIPPERS VS. CARRIERS/3PLs
What are your top strategic priorities for 2025?
Once again, there were notable differences between shippers and carriers/3PLs. While 'cost reduction' topped the list for 76% of the shipper respondents, it ranked second for carriers/3PLs (52%). Topping the list for carriers/3PLs was 'market expansion', selected by 58% of the carrier/3PL respondents.
The results suggest that shippers will focus more intensely on cost reduction in 2025, as they face not only expected increases in transportation rates, but also cost pressures from environmental regulations and global trade tariffs, which we will discuss later in the report.
In contrast, while cost reduction will remain important for carriers/3PLs in the new year, most of them have been in this mode already for the past two years as they worked to survive the market downturn.
Opportunities for cost reduction
One survey respondent, a supply chain executive from a manufacturing company, said they were still planning on high logistics costs due to the Red Sea crisis unless there is a significant economic downturn that impacts demand.
'Overall, I’m relatively pessimistic about the outlook for 2025. We are working to lower costs via whatever means we can through deeper carrier partnerships and improved forecasting and planning.'
Some of the low-hanging fruit opportunities for cost reduction, reflected in our recommendations at the end of the report, are eliminating the many manual and paper-based processes that still exist in transportation operations, as well as becoming more data-driven in their decision making, i.e. making smarter decisions based on data instead of a gut feeling.
NORTH AMERICA VS. EUROPE
What are your top strategic priorities for 2025?
The number of survey respondents from Europe was greater than those from the United States, which complicates direct comparisons. That said, it's worth highlighting some large differences in their responses.
'Supply chain digitisation' and 'sustainability initiatives' both received a greater percentage of votes from European respondents compared to those in the US.
With regards to sustainability, the difference is not surprising considering that Europe, in general, is much further ahead in implementing sustainability-related laws and regulations. For example, there's the Fit for 55 package, which '... makes reaching the EU’s climate goal of reducing EU emissions by at least 55% by 2030 a legal obligation.'
Another example of sustainability-related laws and regulations are the revised CO2 emissions standards for heavy-duty vehicles ratified by the Council of the European Union on 13 May 2024
Another example are the revised CO2 emissions standards for heavy-duty vehicles ratified by the Council of the European Union on 13 May, 2024.
Per the International Council on Clean Transportation, 'The original CO2 standards required the emissions from most new trucks to be 15% lower by 2025 and 30% lower by 2030 than the 2019 reporting period. The revised standards maintain the CO2 reduction target of 15% for 2025 and raise the 2030 target to 45%, while introducing a 65% reduction target for 2035 and a 90% target for 2040.'
There are a variety of sustainability-related laws and regulations in the US too, such as the Advanced Clean Fleets Regulation (ACF) in California, the new emissions standards for heavy-duty vehicles announced by the U.S. Environmental Protection Agency in March 2024, and the new Securities and Exchange Commission (SEC) rules announced in March 2024 to 'enhance and standardise climate-related disclosures by public companies and in public offerings'. However, most of them haven’t taken effect yet and they are likely to be challenged in court.
With regards to digitisation, the results suggest that companies in Europe (at least among our respondents) see themselves further back on the digitisation curve compared to their US counterparts, so they are looking to close that gap in the year ahead. This could be driven, at least in part, by the complexity they face complying with the different laws and regulations of the 40+ countries on the European continent. An example is the need to comply with EU regulations related to electronic communications and filings, such as e-CMR, which is expected to become mandatory for all EU countries in 2027. ArcelorMittal elaborates on the positive impact they expect from digitising CMR. See the video here.
However, as we highlight later in the report, companies on both sides of the Atlantic still have a lot of room for improvement when it comes to digitisation and automation.
In short, the survey results reveal differing strategic priorities for 2025 between shippers and carriers/3PLs
Shippers will focus on cost reduction in anticipation of rising transportation costs, regulatory requirements, and trade tariffs, while carriers/3PLs will shift their focus to revenue growth amid improving market conditions.
Sustainability and supply chain digitisation will also play a role in the strategic plans and initiatives of shippers and carriers/3PLs in 2025, but with a higher priority in Europe.
© 2024 Trimble Inc.
© 2024 Trimble Inc.