Intelligent Transport Greener Future 2025

Foreword Gim Huay Neo Managing Director and Head, Centre for Nature and Climate, World Economic ForumEvgeni Kochman Partner, Travel, Logistics & Infrastructure Practice, McKinsey & CompanyRobin Riedel Partner and Co-lead, McKinsey Center for Future Mobility, McKinsey & Company Intelligent Transport, Greener Future: AI as a Catalyst to Decarbonize Global LogisticsJanuary 2025 The world urgently needs to accelerate emission reductions, but despite numerous pledges many organizations are lagging behind in meeting their 2030 decarbonization targets. Given that global transportation is responsible for a significant portion of greenhouse gas emissions (estimates range from 16-25%), the sector has a pivotal role to play in global decarbonization. Making quick gains in this sector with available technologies and continuing to invest in scaling-up less mature decarbonization solutions will be critical to getting on track with a Paris-aligned pathway. Recent years have seen significant technological developments in advanced analytics, notably in artificial intelligence (AI) and machine learning, with gains in computational capabilities expected to further accelerate the pace of change. This has accelerated in the past 18 months, with widespread adoption of AI applied to quantitative data assets. Such technology can be harnessed to drive decarbonization. Freight logistics and commercial mass transportation, both data-heavy operations, are well suited to take advantage of these technological improvements. Some industry players are already using AI to improve efficiency, but there is a lot of potential yet to be captured across the sector. This report looks at how the broad use of AI could help drive global decarbonization. We explore three specific levers demonstrating how it can help stakeholders across the freight logistics sector: through daily operating efficiencies, improving capacity utilization and transitioning to less carbon- intensive modes of transport. Taken together, our analysis suggests that acting on these levers could have significant impact, reducing total emissions from freight logistics by 10-15% if implemented at full-scale potential.The opportunity is a global one, but action begins at a company level through small incremental improvements. For this reason, the report offers practical guidance and impact examples around how AI can accelerate sector decarbonization, as well as offering steps that business leaders can consider now. Advanced computational applications can be built upon simpler use cases as the starting point within a company. However, success hinges on acting on key enablers, including setting up basic digital infrastructure, fostering industry collaboration and incentivizing sustainable choices among freight logistics customers. Through incremental improvements, freight logistics companies can not only accelerate decarbonization efforts but also position themselves for long- term success in an increasingly competitive and climate-conscious market. Early technology adopters in freight logistics are likely to realize GHG emission reductions and a competitive advantage in attracting customers aiming to reduce their scope 3 emissions. Other significant benefits will come from enhanced operational efficiency, allowing for lower cost structures and better capital deployment possibilities. AI adoption is poised to be a transformational shift in the industry’s journey towards a net-zero future. This report was developed by the World Economic Forum in partnership with McKinsey & Company and reflects the insights of numerous industry experts and business leaders. Interviews were carried out with stakeholders spanning the transportation and logistics ecosystem including service operators across rail, aviation, trucking and shipping, their customers (including major retailers), AI start-ups, tech player incumbents and academics. We thank our partners and contributors for their valuable contributions to this research. Intelligent Transport, Greener Future: AI as a Catalyst to Decarbonize Global Logistics 4