Intelligent Transport Greener Future 2025

The freight logistics sector has traditionally been hesitant to change and adapts at a slow pace, while fragmentation can make it a challenging sector to mobilize. Consequently, cost becomes a key motivator for sustainability transformations. Overall, the investment required for AI solutions at scale can be good for business, regardless of decarbonization effects, as it could help companies stay competitive in a digitally maturing industry. AI solutions that avoid large capex and unlock operational expense (opex) savings through increased efficiency can be an important value driver for industries with narrow margins, such as freight logistics. For example, in 2022, the economic profit margins for several large freight forwarding companies were in the low single digits.7 Operational savings can then be reallocated to investments in scaling-up less mature, high-impact decarbonization initiatives such as sustainable aviation fuels. This dual focus makes AI a potentially attractive investment for companies looking to balance sustainability with financial performance. Three key levers have significant potential for AI to aid decarbonization on a global scale: Research for this report shows that these three uses of AI could collectively reduce current global freight logistics emissions by 10- 15% relative to current baseline emissions. 1. Enhancing operational efficiencies: Enhancing daily operational practices to reduce emissions and fuel consumption across all transportation modes. Potential carbon emission reduction: 4-7%2. Improving capacity utilization: Optimizing the use of space in transportation vehicles to minimize empty capacity and reduce emissions. Potential carbon emission reduction: 2-4%3. Optimizing modal shifts: Encouraging the transition to more carbon-efficient transportation modes to significantly cut emissions. Potential carbon emission reduction: 3-4% Analysis conducted for this report shows that these three uses of AI could collectively reduce current global freight logistics emissions by 10-15% relative to current baseline emissions (2023). The emissions reduction potential for each lever was calculated by incorporating insights from numerous decarbonization experts, reviewing research and leveraging analysis of baseline emissions. It is important to note that these estimates account for any potential overlaps in impact. For more details on the methodology, see Annex 1. The three levers are interdependent. Enhancing operational efficiencies could further amplify the benefits of both modal shifts and capacity utilization, while optimizing modal shifts could impact capacity utilization by reallocating freight volumes to more efficient modes. Together, they address key challenges in the industry such as reducing costs, improving service reliability and meeting sustainability targets. To achieve significant impact, business leaders can start by crafting a bold vision of the full potential impact across these three key levers. They should then act fast to get initial improvements underway and prioritize quick wins. Companies can begin with small, incremental improvements by using these levers to build momentum, setting the stage for broader, long-term transformation. Intelligent Transport, Greener Future: AI as a Catalyst to Decarbonize Global Logistics 9