Intelligent Transport Greener Future 2025

Conclusion With support from AI, the freight logistics sector could potentially reduce its emissions by 10-15%, while increasing both efficiency and service levels. The global transportation industry is responsible for up to 25% of all greenhouse gas emissions, with freight logistics accounting for 7-8% of global emissions. Consequently, there has been an increase in customer demand, regulatory pressure and investor interest for the transport sector to decarbonize. The industry now stands at a critical juncture in its bid to reduce carbon emissions. The past few years have seen a significant inflection point in AI development, investment and adoption around the world, but AI has not yet fully made its mark on the transport sector. This shift in computational power has enabled the integration of AI across several previously technologically immature and underpenetrated industries. The freight logistics sector is one such industry, but there is now a significant opportunity to bend the emissions curve with support from AI. The technology is here today but is unevenly used. The sector can now take a big step forward towards integrating AI and achieving its full potential to reduce both costs and emissions. The freight logistics industry has the potential to leverage AI for decarbonization across three interconnected themes, each of which could achieve significant emission reductions (see Figure 7): 1. Enhancing operational efficiencies to streamline day-to-day operations across all transportation modes could reduce emissions in the global freight logistics sector by 4-7%. 2. Improving capacity utilization has the potential to reduce global freight emissions by 2-4%.3. Optimizing modal shifts to more carbon- efficient transportation could reduce emissions by 3-4%. When such interventions are combined – taking into account that road freight is responsible for ~70% of all freight transport emissions – the freight logistics industry could potentially reduce its emissions by 10-15%, while increasing both efficiency and service levels. While the freight logistics sector has historically been under-digitalized, starting with quick-win use cases can help build momentum for AI, demonstrating tangible benefits for stakeholders and enhancing profit margins. Internally, companies should focus on implementing robust data management processes, incorporating AI into pricing and scheduling models and optimizing cargo space utilization to achieve early gains while building a strong foundation for further efforts. To make this a reality, the freight logistics ecosystem could come together to seek cross- collaboration opportunities, establish uniform data norms, and measure and track decarbonization progress.  The benefits of using AI are clear: cost savings and a high degree of decarbonization potential. Early adopters of leveraging AI could potentially unlock a strategic edge on operational efficiencies and overall competitiveness. As the global economy faces a transformational shift in the way companies work with AI, the freight logistics industry is well placed to embrace AI and lead the world towards a low-carbon future. Intelligent Transport, Greener Future: AI as a Catalyst to Decarbonize Global Logistics 26