Digital cars need digital automakersAn integrated hybrid cloud strategy is the first step IBM Instit.
2024-10-30
24页
5星级
Insights on Huawei Auto(2024)Yiche Research InstituteHow Huawei Can Better Take on BBAAuthorsDirecto.
2024-10-28
27页
5星级
Just Transition to Zero-emission Trucking in IndiaAugust 2024Copyright 2024 Climate Policy Initiative climatepolicyinitiative.org.All rights reserved.CPI welcomes the use of its material for noncommercial purposes,such as policy discussions or educational activities,under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International(CC BY-NC-SA 4.0)License.For commercial use,please contact adminsfcpiglobal.org.AUTHORSArun Krishnan arun.krishnancpiglobal.org Manish Kumar manish.kumarcpiglobal.orgVivek Sen vivek.sencpiglobal.org ACKNOWLEDGEMENTSThis report is part of Climate Policy Initiatives(CPI)ongoing work on just transition,aimed at developing knowledge and understanding in the public domain,to support effective decision-making.The authors would like to thank our knowledge partner Shakti Sustainable Energy Foundation for their contribution.The authors would like to thank the pManifold team Rahul Bagdia,Abhansha Somvanshi and Abhishek for their assistance with the surveys.The authors would like to thank Sudharshan Sundaravaradhan for his contribution to the report.The authors would like to acknowledge and thank CPI India colleagues Krishna Kumar,Amandeep Singh and Saarthak Khurana for their inputs;Kirsty Taylor,Rob Kahn and Saumya Tiwari for editing and internal review;Elana Fortin and Denny Kosasih for layout and design;and Barbara Buchner for her advice and insightful inputs.Responsibility for the information and views set out in this publication lies with the authors.ABOUT CPIClimate Policy Initiative is an analysis and advisory organization with deep expertise in finance and policy.Our mission is to support governments,businesses,and financial institutions in driving economic growth while addressing climate change.CPI has seven offices worldwide in Brazil,India,Indonesia,South Africa,the United Kingdom,and the United States.Just Transition to Zero-emission Trucking in IndiaiiiDESCRIPTORSSECTORTransportationREGIONIndiaKEYWORDSTrucking,road logistics,zero-emission trucking,just transitionRELATED CPI WORKSJust Energy Transition:Economic Implications for Jharkhand(2018)Policy Brief:Policies and Enabling Environment to Drive Private Investments for Industrial Decarbonization in India(2023)RECOMMENDED CITATIONCPI 2024.Just Transition to Zero-emission Trucking in India.ivJust Transition to Zero-emission Trucking in India LIST OF ABBREVIATIONSAbbreviationDefinitionACMAAutomobile Components Manufacturers Association of IndiaASDCAutomotive Skills Development CouncilBEVBattery electric vehicleCNGCompressed natural gasCPIClimate Policy InitiativeCSRCorporate social responsibilityDDU-GKYDeen Dayal Upadhyaya Grameen Kaushalya Yojana EVElectric vehicleFADAFederation of Automobile Dealers AssociationsFICCIFederation of Indian Chambers of Commerce&IndustryFYFinancial yearGoIGovernment of IndiaGVWGross vehicle weightHDVHeavy duty vehiclesICEInternal combustion engineIEAInternational Energy AgencyINRIndian RupeeJTFJust Transition FundLCVLight commercial vehiclesMDVMedium duty vehiclesMHIMinistry of Heavy IndustryMoRTHMinistry of Road Transport and HighwaysMSDEMinistry of Skill Development and EntrepreneurshipNAPSNational Apprenticeship Promotion SchemeNSDCNational Skill Development CorporationOECDOrganisation for Economic Co-operation and DevelopmentOEMOriginal equipment manufacturerOMCOil marketing companyPMKVYPradhan Mantri Kaushal Vikas YojanaPPPPublic private partnershipSTTShort term trainingSIAMSociety of Indian Automobile ManufacturersUSDUS DollarZETZero-emission truckJust Transition to Zero-emission Trucking in IndiavCONTENTSIntroduction 11.Current status of the trucking sector in India 31.1 Structure of the trucking industry in India 31.2 Employment in the trucking industry in India 62.Indias transition to electric trucking 82.1 Zero emission trucking in India 82.2 Forecast for zero emissions trucking in India 92.3 Evolution of charging infrastructure for ZETs 122.4 Trucking clusters analysis 143.Implications of a just transition to ZETs 163.1 Components of a just transition 163.2 Effects of the transition on employment 173.3 Spatial reconfiguration due to industry 193.4 Effects on dealers and suppliers 203.5 Effects on governments and utilities 204.Interventions by the government to ensure a just transition 224.1 Reskilling of impacted stakeholders 224.2 Structuring a Just Transition Fund for India 275.Conclusion and next steps 30Annexures 31Annexure 1:Vehicle categorization 31Annexure 2:Trucking clusters and survey methodology 32Annexure 3:Methodology for ZET forecast 34Annexure 4:Estimate of the size of the proposed Just Transition Fund for India 38References 39viJust Transition to Zero-emission Trucking in IndiaLIST OF FIGURESFigure 1.Registered trucks in India(January 2024)3Figure 2.Structure of the trucking industry 4Figure 3.Truck ownership profile in India 5Figure 4.Sales volume of trucks(FY 2023)6Figure 5.Actual and projected sales of trucks in both fossil fuel and zero-emission categories 9Figure 6.Fuel-wise sales of trucks in 2023 10Figure 7.Projected ZET sales BAU Scenario 11Figure 8.Projected ZET sales Ambitious Scenario 12Figure 9.Map of trucking clusters in India and survey locations 14Figure 10.Components of a Just Transition Framework 16Figure 11.Range of battery electric trucks 20Figure 12.Skilling models and schemes based on nature of jobs 25Figure 13.Design of a Just Transition Fund 27Figure A1.Survey methodology 32Figure A2.Historical and projected cost of Li-ion battery packs 35Figure A3.Diesel prices(INR/liter)35LIST OF TABLESTable 1.Job categories and impact on them due to the transition 7Table 2.List of parameters and metrics for a just transition to ZET 17Table 3.Ratio of direct,indirect,and induced jobs in the survey locations 18Table A1.MoRTH categorization of trucks 31Table A2.Survey locations 32Table A3.Information gathered and output in the survey of direct jobs 33Table A4.Information gathered and output in the survey of establishments 33Table A5.The growth rate of sales in truck segments 36Table A6.Inputs for baseline ZET sales numbers 37Table A7.Cost of reskilling of indirect job holders 38Table A8.Quantum of loans for impacted induced job holders 38Just Transition to Zero-emission Trucking in IndiaviiEXECUTIVE SUMMARYThe road logistics industry in India handles 70%of domestic freight and is responsible for 4%of Indias energy-related CO2 emissions and 53%of particulate matter emissions(NITI Aayog,2022).Given that Indias truck fleet is projected to grow four-fold by 2050,reducing trucking emissions is critical to achieving the countrys Nationally Determined Contribution and net-zero targets.Transitioning to green mobility is also critical from the perspective of public health given the contribution of the transport sector to emissions which impact human health and wellbeing.Of all the alternatives to internal combustion engine(ICE)trucks,battery electric technology is emerging as the most feasible solution in terms of both cost and technological maturity.Transitioning to battery-electric zero-emission trucking(ZET)presents challenges,including the higher total cost of ownership of ZETs than traditional ICE trucks and limited charging infrastructure.The sector is expected to grow gradually based on several factors including reduction in cost and favorable government policies.The trucking industry in India employs millions of people in direct,indirect,and induced jobs.It has created 8 million direct jobs and our analysis shows that there are around 9.4 million indirect and 4 million induced jobs.Adoption of ZETs would lead to job losses for workers in ICE-related trades,both in the organized and unorganized sectors,and among induced job holders who work in trucking clusters.Conversely,it would also create new job opportunities in emerging areas.The co-benefits of ZET adoption include a reduction in public health expenditure on ailments related to emissions and a better quality of life.Navigating this transition requires a nuanced approach.The shift to ZETs should be people-centric and not exacerbate existing inequalities.A comprehensive approach that addresses the social and economic dimensions of the industrys reconfiguration is crucial to ensure that stakeholders are not left behind.This includes not only drivers and fleet owners but also workers in manufacturing(auto companies and their suppliers),aftersales,and induced jobs(e.g.,service providers at fuel stations,truck rest stops,restaurants,and retail shops).Policy and financial interventions should address the needs of direct,indirect,and induced workers,who will require adequate training,reskilling,and job placement programs to facilitate a smooth transition.Equity considerations should also extend to communities impacted by trucking activities,particularly those near major transportation corridors,which stand to bear a disproportionate burden of the transition to ZETs.By investing in workforce readiness and aligning related policies with equity and social justice and strengthening them with transparent information on co-benefits and opportunities can help ensure a more just transition.A Just Transition Fund for India(JTFI)could be established under the Ministry of Skill Development and Entrepreneurship(MSDE)to fund such efforts.Capitalized using government budgetary support and other sources,such a fund could leverage existing government schemes,including the Pradhan Mantri Kaushal Vikas Yojana for skilling and the Pradhan Mantri MUDRA Yojana for loans.This fund could finance the multi-pronged approach required for a just transition to ZETs.JTFI-supported programs could reskill workers for the new ZET landscape.Additionally,it could provide loans and grants to ensure that those who cannot be reskilled for jobs in this industry have opportunities to develop alternative livelihoods.Such efforts can help India achieve its environmental goals while protecting the livelihoods of its trucking industry workforce.Just Transition to Zero-emission Trucking in India1INTRODUCTIONTrucking in India is,as in most countries,dominated by internal combustion engine(ICE)vehicles,whose emissions contribute to climate change and reduce air quality.In 2021,the transport sector accounted for 12%of Indias energy-related CO2 emissions(IEA,2023).Within the transport sector,trucks accounted for close to 4%of Indias total energy-related CO2 emissions.Trucks also accounted for 53%of Indias particulate matter emissions(NITI Aayog,2022).Indias commercial road traffic is set to grow substantially,leading to increased emissions if cleaner trucking models are not adopted.Roads are used to transport 70%of Indias freight,and the number of trucks in the country is expected to quadruple from four million in 2022 to 17 million in 2050(NITI Aayog,2022).This,in turn,will quadruple the road freight industrys oil demand,which already accounts for 25%of Indias oil imports(ibid).Substituting ICE trucks with zero-emission alternatives in India has the potential to avoid 3.8 gigatons of cumulative carbon emissions by 2050.This reduction would be equivalent to Indias entire current annual greenhouse gas(GHG)emissions(WEF,2023).Zero emission trucks(ZETs)eliminate tailpipe emissions by replacing ICEs with battery electric or hydrogen fuel cells.These technologies show the most abatement potential and technological maturity among available alternatives to ICEs(Advanced Propsulsion Centre UK,2023).Given that battery electric trucks have a lower total cost of ownership(TCO)than hydrogen fuel-cell trucks,they are a more attractive option for Indian fleet owners(ICCT,2023).Battery electric trucks are,therefore,the most promising ZET technology to replace ICEs in the medium term in India.Aside from supporting climate change mitigation,ZETs can have various health and economic benefits.Switching to ZETs could avoid 838 billion liters of diesel consumption by 2050,reducing Indias fossil fuel dependence and strengthening the resilience of the nations energy system(Arora,Lata,&Steiner,2023).Reduced emissions also improve air quality and public health.Government regulations and policies can help to accelerate the adoption of ZETs.While manufacturers are developing ZET models for commercial launch and end-users are keen to use this technology to limit scope 3 emissions,fleet owners are reluctant to embrace ZETs unless they achieve TCO-parity with ICE trucks,with widely available charging infrastructure.This is unlikely within this decade without sustained government investment in the research and development of ZETs,concessional lending for fleet owners acquisition of ZETs,subsidies for manufacturing,funding for upskilling of workers,and the installation of charging infrastructure.The adoption of ZETs is expected to create new jobs in manufacturing,maintenance,and charging infrastructure development(NITI Aayog,2021).The transport sector contributes about 6%to Indias GDP(Raghuram,2015)and the trucking industry directly employs eight million people as drivers(British Safety Council,2022),with many more employed in indirect and induced jobs.However,growth in new jobs in the industry may be offset by job displacement in fossil-fuel-related trades.The formal sector has better mechanisms to weather this transition than the informal sector.These considerations have implications for workforce skilling and government funding of the transition.2Just Transition to Zero-emission Trucking in IndiaBeyond the environmental imperative,the transition to ZETs presents an opportunity for socio-economic transformation.Most studies on ZETs to date focus on its techno-commercial implications,with only a few addressing its just transition elements.This report attempts to fill this gap by examining the impact of the transition on various stakeholders especially those working in indirect and induced jobs in the trucking industry.The report projects the expected electric truck sales in India to provide a basis for understanding the resource requirement for engendering a just transition.Trucking clusters were surveyed to determine the ratio of direct,indirect,and induced jobs in the sector.From this data,the total employment in the sector is determined,which provides a basis for projecting the funding and skilling needs for a just transition in the sector.This report then provides recommendations on skilling and financing interventions that the government could implement to make the transition to ZETs just.This includes establishing a Just Transition Fund for India which can be housed under the MSDE.The fund can be used for both the reskilling of impacted workers and the provision of loans for induced job holders who are forced to seek alternative livelihoods due to the transition.Just Transition to Zero-emission Trucking in India31.CURRENT STATUS OF THE TRUCKING SECTOR IN INDIA The road logistics sector in India is expected to grow at a compounded annual growth rate(CAGR)of 8%to reach USD 330 billion by 2025(C.H.Robinson,2024).Road logistics in India is heavily reliant on diesel trucks,of which heavy and medium-duty trucks constitute a fleet of about 7 million vehicles(MoRTH,2023)(Figure 1).A rapid transition to a greener trucking fleet will boost Indias alignment with Paris Agreement goals and Indias target of reaching net zero by 2070.This section of the report examines the current industry structure and the nature of employment within it.Figure 1.Registered trucks in India(January 2024)Registered Trucks(in millions)HDV-5.68MDV-0.85LCV-9.9560%55%Source:Vahan Dashboard,Ministry of Road Transport and Highways1.1 STRUCTURE OF THE TRUCKING INDUSTRY IN INDIAIndias trucking industry has multiple actors,as shown in Figure 2.While most logistics service providers(LSPs)own some trucks,they tend to remain asset-light and move cargo almost entirely through third parties(Raghuram,2015).They are directly served by small fleet owners(SFOs)and their brokers/agents.These core stakeholders are supported by four groups:manufacturers,truck bodybuilders,drivers,and fuel suppliers.All these actors are embedded in an ecosystem of support services,the government,and regulatory bodies(Raghuram,2015).4Just Transition to Zero-emission Trucking in IndiaFigure 2.Structure of the trucking industryCustomersTrucking CompaniesBrokers/AgentsRTO,Tax Administrators,Trafc Police,Road Development Authorities,Centre(MORTH)and StatesFinancing,Insurance,Maintenance and Repair,Food and Stay,IT Services and AssociationsManufacturersTruck Body BuildersDriversFuel SuppliersGovernment and Regulatory BodiesSupport ServicesTangible ElementsCore ActorsPure Truck OwnersSource:(Raghuram,2015)Limited regulation and low barriers to entry have led to a crowded and fragmented freight market,with numerous SFOs and unskilled drivers.SFOs,which comprise over 75%of the market,own fewer than five trucks(NITI Aayog,2022).Only about 10%of Indias truck fleet is owned by operators with more than 20 trucks(Raghuram,2015)(Figure 3).Just Transition to Zero-emission Trucking in India5Figure 3.Truck ownership profile in IndiaMore than 20 trucks6 to 20 trucks1 to 5 trucks75%Source:IISD,2013Brokers or agents connect logistics companies to SFOs matching demand with the fragmented supply.They support consignors(customers)directly or help to connect SFOs to LSPs.Since LSPs have limited means of assessing an SFOs performance,the broker helps to determine the reliability of the SFO(Raghuram,2015).This allows the LSPs to remain asset-light while managing demand for their services.Brokers also play an important role in obtaining business for truck operators.SFOs lack market information on consignors,creating challenges in securing adequate loads to fully utilize their assets.Estimates indicate that trucks can be idle for 25%to 30%of the time due to inefficient demand/supply matching(Deloitte,2020).In addition,only about 30%of truckstypically those owned by large fleet operators(LFOs)have long-term annual contracts with consignors,which have escalation clauses that allow the pass-through of incremental costs(CRISIL,2018).SFOs do not have the funds or information to obtain such contracts and,therefore,depend on brokers,who decide freight rates and charge high commissions(IISD,2013).The truck manufacturing industry is another key stakeholder in the ZET transition.India is the fifth-largest market globally for trucks(C.H.Robinson,2024).A diverse range of manufacturers cater to various segments,including light commercial vehicles(LCVs)for last-mile connectivity,medium duty vehicles(MDVs)for regional haul,and heavy-duty vehicles(HDVs)for long-haul and construction(Figure 4).Indias domestic sales of HDVs grew at a CAGR of 7tween FY 2014 and FY 2023.Four Indian original equipment manufacturers(OEMs)account for nearly all their sales.These companies have also been expanding exports to international markets including Africa,the Middle East,and Southeast Asia.6Just Transition to Zero-emission Trucking in IndiaFigure 4.Sales volume of trucks(FY 2023)9,772 48,333 103,480 159,008 OthersVolvo Eicher-CVAshok LeylandTata MotorsHDV Sales(FY 23)52,052 65,654 199,682 240,499 OthersAshok LeylandTata MotorsMahindra&MahindraLCV-Sales(FY 23)Source:Society of Indian Automobile Manufacturers The Indian government has implemented regulations to improve vehicle safety,emissions standards,and fuel efficiency.The implementation of Bharat Stage VI(BS-VI)emission norms has significantly impacted the industry by pushing manufacturers to develop cleaner and more efficient trucks.Some have started producing electric trucks and buses,with a focus on last-mile delivery and urban transportation.The truck manufacturing industry in India is expected to continue growing as the economy develops and road logistics demand increases.The transition to cleaner and more efficient vehicles,including electric trucks,is likely to shape the industrys future.1.2 EMPLOYMENT IN THE TRUCKING INDUSTRY IN INDIAIndias growing transportation and logistics sectors are increasing demand for truck drivers,warehouse personnel,and cargo handlers,providing essential employment to semi-skilled and unskilled laborers.Jobs created by the trucking industry can be classified as direct,indirect,and induced jobs.Direct jobs are those directly connected to the core activities of transporting goods and managing the logistics of trucking operations(Table 1).These include truck drivers and assistants,fleet owners,and other personnel employed by trucking companies.Truck drivers often associate themselves with specific fleet owners.Their salaries consist of a fixed component,with an additional variable component that is typically tied to the distance driven.In a recent survey,truck drivers in India reported a median direct monthly income of INR 17,000(USD 205)1(PPHF,2022).An additional variable component comes from achieving fuel optimization(approximately INR 1,500 to 2,000 per trip)among other sources;22.6%of truck drivers reported having to supplement their wages with an alternative source of income.Indirect jobs encompass roles upstream and downstream of the trucking industry(Table 1).Upstream indirect jobs relate to the manufacture of trucks and their components,while downstream indirect jobs are in aftersales service and fuel stations.1 A conversion rate of USD 1=INR 83 has been used.Just Transition to Zero-emission Trucking in India7The automotive ecosystem has many independent service stations.However,in India,not all have well-qualified staff,which will make servicing EV powertrain systems challenging.Reskilling mechanics is crucial to ensure the continuity of this service business,although the impact in the short to medium term may not be significant due to the considerable number of ICE vehicles that still need to be serviced as the transition gets underway.Induced jobs are roles created because of economic activity generated by the trucking sector(Table 1).These are typically found in localities surrounding clusters where trucking companies and their employees purchase goods and services.They include jobs in local restaurants,hotels,retail stores,and other businesses that benefit from the increased economic activity brought about by the presence of the trucking industry.Table 1.Job categories and impact on them due to the transitionJob TypeDefinitionImpact of the Transition to ZETDirect JobsJobs directly tied to the core activities of trucking,including truck drivers,assistants,fleet owners,and other company personnel.Truck Drivers:may face changes in income due to differences in ZET operation and maintenance(compared to ICE trucks).May need to supplement wages with alternative income sources.Fleet Owners:may need to adapt their business models and invest in ZET infrastructure.Indirect JobsUpstream indirect jobs-truck and component manufacturing;Downstream indirect jobs-aftersales service and fuel stations.Manufacturing:shifts in demand from ICE to ZET will impact employment in truck manufacturing and related industries.Aftersales Service:mechanics and service personnel will need to upskill for ZET maintenance.Fuel Stations:will need to diversify services beyond fossil fuels.Induced JobsJobs which arise from economic activity around the trucking sector,such as local businesses benefiting from trucking-related spending.Truck-stop businesses:restaurants,hotels,retail stores,etc.,in trucking clusters will see changes in customer base and demand based on ZET adoption.Source:CPI analysisAnother classification of workers in the trucking value chain is based on whether they are covered by the Employees State Insurance Corporation pension scheme.Jobs covered by this scheme are classified as formal and others as informal.Formal sector workers,such as employees of manufacturing firms and authorized service stations,have better opportunities for reskilling and redeployment within their companies or elsewhere in the industry.This is not the case for millions of informal workers,such as mechanics and workers at truck lay-bys.Such roles are largely semi-skilled or unskilled and financing will be needed to help these workers secure alternative livelihoods if they are impacted by the transition to ZET.8Just Transition to Zero-emission Trucking in India2.INDIAS TRANSITION TO ELECTRIC TRUCKING 2.1 ZERO EMISSION TRUCKING IN INDIAWhile Indias electric vehicle(EV)market is growing,driven by government policy and incentives,ZETs have not yet been as widely adopted as passenger EVs.There has been selective adoption of commercial EVs in the LCV segment.Short-haul trucks have predictable daily ranges and payloads,return-to-base operations,reliable and dedicated parking,and lend themselves to innovative business models(ICCT,2023).However,there is hesitance to purchase ZETs for long-haul,open-ended trucking operations.Consignors are interested in having LSPs deploy ZETs to reduce their scope 3 emissions,but fleet operators are not yet adopting them.A lack of financing options,opacity concerning end-of-life value,the lack of a secondary market,and concerns about limited charging infrastructure for long-distance operations have hindered the uptake of M/HDVs,in particular.While ZETs offer lower operating costs than ICEs across various freight categories in India,higher upfront costs have kept the TCO for ZETs above that of ICEs.Recent technological advances promise to reduce the cost of batteries,but a trade-off exists between truck weight and range-per-charge,creating a payload penalty for ZETs.Balancing the payload capacity with range will be crucial for successful adoption(Abhyankar,et al.,2022).Achieving the ZET transition in the M/HDV segment requires a holistic approach,with financial innovation,policy changes,and technological advancements as essential enablers.The Indian government is promoting ZETs to help meet the countrys ambitious emission reduction targets.In 2020,NITI Aayog and the OECDs International Transport Forum jointly launched the five-year Decarbonizing Transport in Emerging Economies project,which aims to aid India in developing a pathway towards a low-carbon transport system through modeling tools and policy scenarios.In 2022,NITI Aayog launched the Electric Freight Accelerator for Sustainable Transport(e-FAST),a platform to foster public-private collaboration on large-scale freight electrification.This initiative has brought on board 16 manufacturers and LSPs who have signaled a collective demand for 7,750 ZETs by 2030.To meet this demand,policy and regulatory efforts will be required to establish market certainty,create scalable pilot support,develop infrastructure,and create financing platforms to attract private investment.The office of Indias Principal Scientific Advisor has also developed the Technical Roadmap for Deployment of Zero-Emission Trucking in India in consultation with experts from various sectors(NITI Aayog,2023).This document presents a five-year strategy outlining timelines,budgets,and collaborative efforts to facilitate the ZET transition.It highlights priority trucking routes for ZET deployment and the commencement of pilot programs involving 60-70 electric trucks.Further government intervention is required to explore contextual factors,including road conditions,traffic patterns,and climate,which directly affect the performance of ZETs.Just Transition to Zero-emission Trucking in India9Investigating the energy consumption of ZETs under local conditions is essential to understanding how they perform during routine operations in Indian roads.The evolution of long-distance ZETs will also require electrifying open-ended routes.The National Highways Authority of India and other government and private stakeholders will need to cooperate to develop land parcels and land use models across the highway network to develop truck rest stops integrated with charging stations.2.2 FORECAST FOR ZERO EMISSIONS TRUCKING IN INDIAGrowth in Indias truck market is projected to continue,with a slight concentration on LCVs.In FY 2023,approximately 0.95 million trucks were sold,following a slight dip due to factors including the COVID-19 pandemic,the transition to BS-VI emission standards,and adjustments in axle load norms.Sales of trucks are expected to increase to 1.2 million units by 2030 and to 1.7 million units by 2040(Figure 5).The LCV segment leads truck sales,due to the expansion of industries like e-commerce,construction,and logistics,as well as increasing demand for fuel-efficient vehicles.Figure 5.Actual and projected sales of trucks in both fossil fuel and zero-emission categoriesFY15ACTUALPROJECTEDFY17FY19FY21FY23FY25FY27FY29FY31FY33FY35FY37FY390200,000400,000600,000800,0001,000,0001,200,0001,400,0001,600,0001,800,0002,000,000HDVLCVMDVNumber of trucks soldSource:FADA,CPI analysis10Just Transition to Zero-emission Trucking in IndiaZETs have yet to see widespread adoption in Indias truck segment,which is predominantly powered by diesel due to its higher power output and widespread availability of both engines and fuel.Sales of compressed natural gas trucks grew initially but declined after the revised gas pricing formula came into effect in 2022.The sale of ZETs as a percentage of total truck sales is highest in the HDV segment,with 0.71%of new registrations in 2023,followed by LCV(0.16%)and MDV(0.07%).This can be attributed to the low base of HDV sales overall(Figure 6).Figure 6.Fuel-wise sales of trucks in 2023MDVHDV0 0Pp0%DieselElectricPetrolPetrol/CNGZET shareShare of ZETs in total sales%of total salesLCV0.16%0.07%0.71%0%0.1%0.2%0.3%0.4%0.5%0.6%0.7%0.8%Source:FADAJust Transition to Zero-emission Trucking in India11Major Indian commercial vehicle OEMs,and some startups,have started producing ZETs or announced plans to do so.However,they face the challenge of importing powertrain and battery pack components,which are not manufactured indigenously.The reskilling of manufacturing and maintenance personnel must focus on these components and other evolving technologies.Prominent truck manufacturers in India have also initiated the journey to adopt ZETs.For example,Tata Motors,which holds a substantial market share,has committed to achieving net-zero emissions for its trucks by 2045.CPI analysis indicates that annual ZET sales will reach 0.04 to 0.09 million units by 2030 and around 0.27 to 0.38 million units by 2040(Figure 7 and Figure 8).This is based on CPIs projection of annual commercial ZET sales in India using a proprietary model based on public and proprietary datasets,insights from expert interviews,and in-house expertise(see Annexure 3 for details).The two scenarios modeled are:1)business-as-usual(BAU)with no major policies to increase ZET penetration;and 2)an ambitious scenario with sector-specific policies aligned with the governments net-zero and climate targets.Figure 7.Projected ZET sales BAU ScenarioFY24FY26FY28FY30FY32FY34FY36FY38FY40050,000100,000150,000200,000250,000300,000LCVMDVHDVNumber of ZETs soldSource:CPI analysis12Just Transition to Zero-emission Trucking in IndiaFigure 8.Projected ZET sales Ambitious ScenarioFY24FY26FY28FY30FY32FY34FY36FY38FY40050,000100,000150,000200,000250,000300,000350,000400,000LCVMDVHDVNumber of ZETs sold Source:CPI analysisThe growth potential of ZETs in India is limited by several factors.Government policies and initiatives will be significant in determining their penetration,as observed by the difference in outcomes of the two scenarios.ZET growth is also linked to the development of other technologies,such as flex-fuels,which can work on existing ICE engine platforms.Given that the weight of trucks limits their range,LCVs can run on lighter battery packs than M/HDVs.This is reflected in our projections,which show that by the year 2040,almost 22%to 28%of the LCV fleet in India will be electrified,compared to only 7%to 12%of the HDV fleet.ZET adoption also depends on the parallel development of a charging network,especially on highways serving M/HDVs.2.3 EVOLUTION OF CHARGING INFRASTRUCTURE FOR ZETSInfrastructure for ZETs primarily relates to the charging ecosystem.A transition is happening in various countries,including India,from charging infrastructure designed for passenger EVs to higher-capacity applications such as electric buses and electric M/HDVs.The beachhead model of truck electrification proposed by the Drive to Zero initiative projects that predictable delivery routes will be among the first to be electrified(Drive to Zero,2020).Preparation for this is ongoing,with several companies entering the last-mile connectivity Just Transition to Zero-emission Trucking in India13space using LCVs.Most new entrants in this market are vertically integrated with their charging infrastructure,whether they own or lease their fleets.However,it will be more challenging to electrify the long-haul open-ended routes of M/HDVs.Lessons may be learned from China,which is leading in ZET adoption globally,accounting for 86%of sales in 2022,with over 50,000 units sold(IEA,2023).This reflects Chinas strategy to shift its EV focus to trucks,enabled by battery-swapping technology(see Box 1.)In comparison,Indias sales of ZET in FY 2023 numbered less than 5,000.Box 1.Battery swapping as a driver of truck electrificationSwapping batteries can be the most efficient charging method for M/HDVs as it reduces idle time and enhances distance covered in a day.Battery swapping could also help to disperse charging demand,easing the strain on power grids at peak times.Battery swapping takes a few minutes compared to 40 minutes for DC fast charging for an electric truck.It also reduces the spatial requirements of charging stations.For example,Indias first battery-swapping station for public buses in Ahmedabad can charge 12 batteries simultaneously.Established by Ashok Leyland and Sun Mobility,this station allows drivers to make one 3-to-4-minute battery swap per trip.The frequency of swaps enables reduced battery size,which in turn maximizes bus space,allowing more passengers to be accommodated.Battery swapping is a key reason for Chinas success in the electric truck market.The national and local governments have promoted battery swapping since 2020.In 2022,almost half of electric trucks sold in China were equipped with swap-capable batteries(Hongyang Cui,Yihao Xie,and Tianlin Niu,2023).As of February 2024,the Government of India has set up 12,146 public EV charging stations across the country but has not commenced the development of rapid charging stations for trucks(PIB).Given the slow pace and low numbers of high-capacity charging stations being set up by the government,the private sector could play an enabling role.In addition,it is important to note that trucking can be fully zero-emission only when the charging infrastructure is powered purely by renewable sources.The weighted average emission factor for Indias power sector as of December 2023 was 0.716 kgCO2/kWh(Central Electricity Authority,2023).In comparison,a similar data point available for a country in the European Union,namely Poland,suggests that the grid GHG emissions of Poland were 0.600 kgCO2e/kWh(ICCT,2023).Hence,the emissions intensity of the power sector in India must be reduced in tandem with the growth of ZETs to fully reduce trucking sector emissions.Fuel stations will be impacted by the transition to ZETs.The Indian fuel retail market is organized and consolidated,with fuel stations catering to vehicles ranging from two-wheelers to heavy trucks.The industry operates primarily through retail outlets owned by government oil marketing companies(OMCs),which may be operated by either the OMC or a dealer.The OMC may also lease fuel stations to another company which then has them operated by a dealer(HPCL,2024).The expansion of CNG vehicles has introduced another business model called the dealer-owned,dealer-operated model.Adani Gas,for instance,has launched over 300 dealer-owned 14Just Transition to Zero-emission Trucking in Indiaand-operated CNG stations,which allows dealers to own and manage stations,with oversight of critical infrastructure by Adani Gas(Adani Gas,2022).Given that the projected uptake of ZETs will be gradual over the next decade,fuel stations have an opportunity to evolve into charging stations or diversify into other businesses.OMCs are taking the lead in this by setting up charging facilities at fuel stations across India.2.4 TRUCKING CLUSTERS ANALYSISTrucking clusters in India were analyzed to understand indirect and induced employment due to the trucking sector.Unlike in developed economies,there are no organized sector truck stop companies in India.Our survey indicated that trucks cluster around sites including rest stops,agricultural mandis(wholesale markets),ports,inland container depots,industrial estates,special economic zones,weighbridges,and warehouses.A mapping of these clusters was done to understand their spread across the country.A cross-section of these clusters was then considered for a survey on the indirect and induced jobs likely to be impacted by the ZET transition(Figure 9).The surveyed trucks include LCVs,MDVs,and HDVs,which carry a range of cargo types,including containers,bulk cargo,agriculture commodities,and break-bulk cargo for last-mile delivery.Annexure 2 summarizes further details about this survey.Figure 9.Map of trucking clusters in India and survey locationsICD TughlaqabadKoyambedu MarketJNPTHaldia PortD Devraj Urs TruckTerminal YeshavntapuraJagatpur Truck TerminalMadhavaram Truck TerminalAzadpur MandiMIHANSanjay Gandhi Transport NagarUse-categoriesICDAgri MandiPortTruck terminalTruck terminal truck building cluster10Number of trucking clusters3,500Source:CPI analysisJust Transition to Zero-emission Trucking in India15Two trends will impact indirect and induced jobs in trucking clusters:technological advances and sector formalization.Long-distance electric trucks will need charging points at regular intervals on highways to operate.During this period of rapid technological evolution,the range of batteries and the use of charging points will reconfigure trucking clusters.Charging point operators(CPOs)incur fixed costs,including land leases,capex for charging stations,maintenance expenses,and salaries.In addition,CPOs must be close to high-capacity power lines to receive adequate voltage.To ensure a return on investment,CPOs need to have a minimum number of charging guns and a minimum utilization level.To defray their high fixed costs,they should also seek parallel revenue streams by offering services such as retail,boarding,lodging,EV maintenance and repair,and advertising.In parallel,truckers seeking to minimize idle time due to charging will value access to retail,boarding,and lodging at charging stations,especially on long-distance routes.This could further consolidate and formalize truck stops across the highway network.This formalization and relocation of truck stops will cause job losses in some locations and gains in others.Some existing clusters will stop being patronized,leading to unemployment or a need for worker reskilling.While fuel stations and related businesses will be impacted,the projected slow uptake of ZETs over the next decade gives them time to evolve into charging stations or to diversify into other businesses.Informal service providers will lose business and revenue,impacting induced and informal jobs.Understanding the nature of this job displacement will be key for deploying policies and financial interventions for making this transition just.16Just Transition to Zero-emission Trucking in India3.IMPLICATIONS OF A JUST TRANSITION TO ZETSOur analysis shows that there are currently about 9.4 million indirect jobs and about 4 million induced jobs in the trucking industry in India.A shift to ZETs creates a need for extensive reskilling of this indirect workforce currently employed in the ICE vehicle value chain.It also requires financing alternative livelihoods for induced job holders who cannot be reskilled for new roles.A just transition framework must consider multi-dimensional and interconnected aspects of the transition to ensure an optimal outcome for all stakeholders who stand to lose out due to the transition.3.1 COMPONENTS OF A JUST TRANSITIONFigure 10 shows a Just Transition Framework across four dimensions:recognition,procedural,distributional,and restorative justice(European Environmental Agency,2024).Figure 10.Components of a Just Transition FrameworkRecognition JusticeRecognizes that some communities and individuals might be impacted due to the green transition;identifies such individuals and groupsProcedural JusticeHighlights the right to a fair process,and for diferent stakeholders to take part equitably in decision makingDistributional JusticeConcerns the equitable distribution of burdens and benefits of energy and environmental decisionsRestorative JusticePrimarily aims to repair the harm done to individuals,instead of focusing on punishing the ofender Source:(European Environment Agency,2024)Context-specific solutions are required to meet the needs of different stakeholders across different geographies.This framework should therefore be customized to meet the needs of those likely to be impacted by the transition to ZETs,by identifying relevant parameters and metrics for each pillar,as outlined in Table 2.Section 4 of this report proposes solutions for engendering a just transition in this sector by focusing on skilling and financing alternative livelihoods both of which have elements of all these components of a just transition.Just Transition to Zero-emission Trucking in India17Table 2.List of parameters and metrics for a just transition to ZETJustice dimensionParameterMetricRecognitionIdentifying stakeholders affected by the transition(individuals and groups covering regions,social groups,gender,age,etc.)Have all the stakeholders direct and indirect-been identified?Has the distribution of jobs(direct,indirect,and induced)by job role,gender,and sub-sector been identified?Have the incentives(for skilling)required for different stakeholders for ZET been identified?Stakeholder-wise quantitative and qualitative impact measurement What is the extent of the impact of this transition on job roles?What is the number of jobs lost/gained categorized by job role?How many new job roles are created?ProceduralProcedural fairness in identifying the concerns of different stakeholders regarding the choices made for the transition Have all impacted stakeholder groups been consulted by the government in a structured manner?What are the grievance redressal pathways available to them?Is access to skilling or financial assistance for different stakeholders easy?DistributionalFairness in engaging with stakeholders during the transition How easy are grievance redressal pathways to access?Has an assessment been made to determine the cost or burden of transition on the stakeholders?How is the burden of the differential impact of the transition on diverse stakeholder groups distributed?RestorativeMainstreaming of affected stakeholders with a well-defined roadmap Have the reskilling and upskilling options for stakeholders been identified?Have the affected stakeholders been included in the mainstreaming strategy?Fairness in financial inclusion of affected stakeholders during the transition Has the cost or compensation to manage the negative impact of the transition on livelihoods of different stakeholders been estimated?Is the estimated cost or compensation sufficient to restore their livelihoods?Source:CPI AnalysisJust transition concerns need to be foregrounded to formulate optimal implementation strategies and a related monitoring mechanism as the transition progresses.Synchronized efforts by the government and private sector are required to strengthen partnerships and alliances to ensure that the transition is just at all levels.3.2 EFFECTS OF THE TRANSITION ON EMPLOYMENTAs identified in Section 1.1,key entities in the trucking industry include trucking companies,brokers,and fleet owners.These are,in turn,serviced by truck manufacturers,truck bodybuilders,drivers,and fuel suppliers,forming an ecosystem that includes support services,government bodies,and regulatory entities.SFOs lack the certainty of long-term contracts and mostly attach their fleets to trucking companies that interface with customers and manage their logistics.This semi-formal arrangement is untenable for ZETs;long-term financing is required for ZETs,which is only available to companies with reliable income afforded by long-term contracts.18Just Transition to Zero-emission Trucking in IndiaIn addition,the typical tenor of a truck loan in India of up to 60 months may be inadequate for ZETs,given that secondary capex is required to replace batteries in the middle of the vehicles lifetime.Hence,longer tenor loans or refinancing of existing loans are required.CPIs survey conducted for this study found that there are 0.7 indirect downstream informal jobs for every direct job in Indias trucking industry(see Table 3).Given that there are 8 million truck drivers in the country(British Safety Council,2022)2,there are around 5.6 million related indirect jobs in fuel stations and unorganized sector mechanics.Table 3.Ratio of direct,indirect,and induced jobs in the survey locationsTotal number of direct jobs across the survey sites19,170Total number of indirect(downstream informal)jobs across the survey sites12,509Ratio of indirect(downstream informal)jobs to direct jobs0.7Total number of induced jobs across the survey sites9,513Ratio of induced jobs to direct jobs0.5Source:CPI and pManifold analysisIndirect formal jobs,such as those in OEMs and formal aftermarket service,will also be impacted by the transition.We calculate that there are 3.8 million upstream indirect jobs in manufacturing,sales,and service of trucks.3 Adding the upstream and downstream indirect jobs in the trucking industry,the total indirect jobs in the trucking industry are around 9.4 million.Many of these,especially those related to ICE powertrain and electronics,will be impacted by the ZET transition.However,these workers are largely in the formal sector and can be reskilled to work in the ZET value chain.The most vulnerable among indirect workers are the informal sector service mechanics,who are spread across India.OEMs may limit access to ZET software and electronic components,as well as related expertise,to authorized dealers and service stations due to safety and intellectual property considerations.This will impact informal sector mechanics who require access to skilling in the new technologies to survive the transition to ZET.The unregistered,small-scale activities that define the informal sector pose challenges in skills enhancement.This sectors structure restricts access to official training and opportunities for improving skills,complicating structured skilling initiatives compared to the organized sector.Induced jobs in the trucking industry will be the most vulnerable in the transition to ZETs.Our survey indicates that there are about 0.5 induced jobs for every direct job in the sector,translating to 4 million jobs across India.Since these jobs do not require any specific skills or 2 There are multiple estimates of the number of truck drivers in India.The estimate used in this report is based on figures from the British Safety Council.3 The overall value of Indias automotive industry,including light,medium,and heavy-duty vehicles,is USD 90 billion,with 19 million direct and indirect jobs(PIB,2023).The value of M/HDV trucks market in India in 2021 was USD 11.2 billion(Research and Markets,2022).For LCVs,assuming an average price of INR 1 million per LCV and with 0.57 million registrations in FY 2023(FADA),translates to annual sales of USD 6.8 billion1.Hence,the total LCV,MDV and HDV sales per annum totals USD 18 billion.Taking the number of workers in proportion to the market size gives 3.8 million workers engaged in truck manufacturing,aftermarket sales and service.Just Transition to Zero-emission Trucking in India19educational attainment,they are held by the most vulnerable sections of society.Depending on how the sector formalizes,almost all induced jobs may be under threat especially those in informal truck rest stops across Indias highway network.Financing alternative livelihood creation via financial support mechanisms such as MUDRA loans,which are aimed at micro and small-scale entrepreneurs,provide a possible path for the impacted induced job holders to find alternative livelihoods.3.3 SPATIAL RECONFIGURATION DUE TO INDUSTRY The clustering of ZETs around charging stations rather than informal truck rest stops will impact jobs in informal truck stops across the Indian highway network.Over time,electric charging will formalize truck stops and their related workforce.While formal roles will increase alongside a decrease in related informal ones,a net loss in jobs is expected due to higher efficiencies in the formal sector.Figure 11 shows the range of several trucks produced across the world as of 2023(CALSTART,2023).The median range for commercially available ZETs globally stands at slightly above 402 km per charge.However,models that are commercially available in India have a range of 110 km to 180 km per charge(JMK Research&Analytics,2024).Our survey found that HDVs in some use-categories in India travel up to 460 km per day,meaning that they would need to recharge multiple times every day.The data for battery energy density is clustered around 200 kWh for HDVs and around 100 kWh for M/LCVs.4 An estimate predicts that the energy density of batteries could increase by 50tween 2024 to 2030(S&P Global,2018),which would increase the range of ZETs given the same battery payload.India must expand its charging network and raise battery charge densities for locally manufactured trucks to global standards to take advantage of such technological advancement.4 The definitions of heavy-duty trucks,medium duty trucks and cargo vans shown in the figure are those given by CALSTART.20Just Transition to Zero-emission Trucking in IndiaFigure 11.Range of battery electric trucksAll Range,Battery Electric(kWh)Energy Capacity and Payload501 001 50200250300350400450500550600650700750800850Range(km)501 001 50200250300350400450500Range(mi)02004006008001 000Energy Capacity forScaniaTeslaVolvoLionNikolaBYDLionQuantronVolvoMackLionLionFarizonShacmanBlue ArcBYDOrtenJACFotonFeidiDesignwerkLiebherrPVIVolvoBattle MotorsMedianMedianMedianMedianMedianMedianVehicle TypeHD TruckMD TruckMD Step VanCargo VanOtherTruck Payload440200004000064000Select Payload UnitkglbsBattery Electric(kWh)Source:(CALSTART,2023)3.4 EFFECTS ON DEALERS AND SUPPLIERSDealerships,which are responsible for vehicle sales and services,also manage local product promotion and last-mile delivery.Dealerships,which are well-equipped to handle sales and services for ICE trucks,will have to update their knowledge and skills for ZETs.This will particularly affect the services aspect of the business,which will involve handling software,electronic hardware,and battery-related issues.Like truck manufacturers,dealerships must invest in training to minimize the impacts of this transition.Auto component suppliers who support OEMs in research,development,and manufacturing currently focus on ICE components and must adapt to ZETs by diversifying into electric powertrain components,which requires significant changes in approach and business models.While the transition poses challenges for OEMs,it also presents opportunities for their partners in the supply chain.3.5 EFFECTS ON GOVERNMENTS AND UTILITIESShifting Indias transportation energy demand from petrol and diesel to the more diverse sources that power the countrys electricity grid will make the economy less vulnerable to oil-related geopolitical risk and oil price shocks.It would also help reduce foreign exchange outflow given that India imported around 85%of its crude oil(212.5 million tonnes)and 19 million metric tonnes of liquefied natural gas in FY 2023(Petroleum Planning&Analysis Cell,2024).As the commercial vehicle fleet increasingly transitions to ZETs,the economic benefits of this shift will grow over time.Indias OMCs have the potential to establish battery-charging or swapping stations at fuel stations to augment their current operations.Just Transition to Zero-emission Trucking in India21A reduction in tax revenue of up to 15%is predicted if EVs capture 30%of sales by 2030(CEEW,2020).The government requires a long-term strategy to raise resources,diversify revenue sources and reduce dependence on fossil fuel taxes.Power distribution companies(DISCOMs)are in a unique position to both leverage and drive this transition.Given the high voltage requirements of ZET charging stations,DISCOMs can play a key role in the deployment of charging stations through various DISCOM-centric business models.The government can play an enabling role in promoting ZETs by allowing DISCOMs to pass through charging infrastructure costs.22Just Transition to Zero-emission Trucking in India4.INTERVENTIONS BY THE GOVERNMENT TO ENSURE A JUST TRANSITIONThe twin government interventions for a just transition to ZETs are skilling support and financing support.Jobs in the organized sector and some indirect jobs in the unorganized sector require skilling support to switch from ICE to ZET manufacturing,maintenance,and repair.Induced jobs in the unorganized sector require financing support in the form of grants or low-cost debt to switch livelihoods.The key challenge for policymakers in effecting a just transition is in the unorganized sector and for induced jobs.While stakeholders in these jobs will be the most impacted by the transition,their geographical dispersal and the lack of data on them makes it challenging for policymakers to support them effectively.This section explores the twin approaches to making the transition just and provides recommendations for the same.A Just Transition Fund for India is proposed for funding reskilling initiatives and for financing alternative livelihoods for engendering a just transition.4.1 RESKILLING OF IMPACTED STAKEHOLDERS The transition from ICE trucks to ZETs has the potential to exacerbate existing socio-economic challenges unless the principles of just transition are firmly incorporated,given the potential for job losses across the trucking industrys value chain.Reskilling and upskilling for a just transition will require leveraging Indias skill development ecosystem.It is crucial to take stock of the skill set of workers in the existing value chain and the skills required for the ensuing ZET value chain.A gap analysis is fundamental to formulating appropriate strategies for skilling and reskilling.In addition,improving skills within the informal sector involves addressing challenges such as access to affordable training,ensuring that training programs align with the needs of the informal economy,and overcoming societal and structural barriers that prevent participation in these initiatives.Adequate skilling and access to capital can provide significant opportunities.It can enable informal sector workers to leverage entrepreneurial opportunities related to ZET battery swapping,waste management,and recycling.With the right support,retail shops and restaurants near trucking clusters can leverage the opportunity to become potential battery charging facilities.Just Transition to Zero-emission Trucking in India23SKILL DEVELOPMENT FRAMEWORK AND TRAINING MODELSAs outlined in Section 3,there are about 8 million direct jobs,9.4 million indirect jobs and 4 million induced jobs in the trucking industry.Many of these indirect jobs,especially those associated with the ICE powertrain and electronics,will be impacted by the transition to ZETs.However,these are largely formal sector jobs and their workers can be reskilled to work in the ZET value chain.Box 2 highlights an example of how the organized sector can enable skilling in a structured manner.Box 2.Case study-addressing the skill gap in the formal sectorAequs Private Limited is a specialized contract manufacturer operating across the automotive,aerospace,and consumer goods sectors.The aerospace industry has exacting quality requirements that demand a highly skilled workforce.To address this,Aequs takes a structured skilling approach that combines classroom and practical training to quickly train skilled aerospace technicians.Aequss Industrial Knowledge Centre provides a structured 30-month training program for fresh engineering graduates.The program is tailored to enhance technical,behavioral,and leadership skills.It includes rigorous instructor-led training and practical,on-the-job learning,ensuring employees master current technologies and processes.Regular skill assessments help refine this training to keep it relevant to industry needs(Aequs,2023).Aequs faced several challenges in integrating academic curricula with practical training.Firstly,aligning classroom theory with the specific technical skills required in aerospace manufacturing operations is complex,requiring constant curriculum updates.Secondly,logistical coordination between educational programs and manufacturing schedules is critical to ensure seamless training without disrupting production.Lastly,maintaining quality training that meets industry-specific standards demands ongoing updates and evaluation of content and pedagogy to ensure a productive,agile feedback loop.Aequs has partnered with Medhavi Skills University and the National Skill Development Corporation(NSDC)to create an innovative Learn&Earn model,integrating academic studies with practical training.This is designed to provide students with real-world experience at the manufacturing facilities of Aequs,while they complete their academic courses in aerospace manufacturing technology,supported by apprenticeship modules from NSDC.Source:media reports and company websiteThe most vulnerable workers will be those in indirect jobs such as informal sector service mechanics.Box 3 highlights how skilling can be provided for informal sector participants by highlighting the case of skilling CNG technicians in Delhi.24Just Transition to Zero-emission Trucking in IndiaBox 3.Case study-addressing the skill gap in the informal sector In response to increasing pollution from diesel-based transport,Delhi pioneered the transition to CNG for public transportation.This not only improved air quality but also spurred a new labor market focused on CNG technology.The shift to CNG vehicles caused an acute shortage of mechanics trained in the technology.This skill gap was highlighted by several adverse incidents,including fires in CNG buses due to inadequate maintenance.The existing training infrastructure struggled to keep pace with demand,compounded by the inadequacies in the quality of informal training centers.The approach to bridging this skill gap was multipronged.Initially,vehicle manufacturers assumed the responsibility of maintaining the new CNG fleets under long-term contracts.This provided a temporary solution but underscored the need for reskilling a larger workforce across the value chain.Enhancements in formal training programs within companies and the introduction of public-private partnerships for training informal sector workers were pivotal in ensuring that the transition was supported by a capable and well-trained workforce.To address the growing need for skilled CNG technicians,a combination of formal and informal training methods has been employed.Industrial Training Institutes in the National Capital Region have adapted their curricula to include specialized training for CNG mechanics.However,the traditional entry requirements based on formal education attainment have proven an entry barrier for many mechanics.Adjusting these criteria to value practical skills and experience over formal education could make the training more accessible and relevant for informal sector workers.Source:media reports and stakeholder consultationsBroadly,there are three skilling models available to help address the skill gap-government-sponsored,market-led,and private sector-led(Figure 12).Skilling programs funded by central and state governments can be led through bodies like National Skill Development Corporation(NSDC)and State Skill Development Missions.Market-led programs are demand-driven and are offered for a fee to interested candidates and organizations.Private sector-led programs include those run by OEMs themselves for their workforce or those programs which are funded under corporate social responsibility(CSR)by the company.Just Transition to Zero-emission Trucking in India25Figure 12.Skilling models and schemes based on nature of jobsPMKVY STT&RPLPMKVY STT;NAPS;DDU-GKYFee-based trainingCSR;OJTCSR;OJTMarket-ledPrivate sectorGovernment-sponsoredDDU-GKY;Skilling programs ofered by other sector skill councils-Tourism&Hospitality and Retail sector.Direct(Truck drivers,assistants&fleet owners)Indirect(manufacturing jobs,service jobs and fuel stations)Induced(local restaurants,hotels,retail stores,etc.)Source:Media reports and government websitesGOVERNMENT-SPONSORED SKILLINGGovernment-sponsored programs play an important role where training providers cater to people who cannot otherwise afford the skilling programs.Existing programs can be leveraged to provide training for the ZET transition.The Pradhan Mantri Kaushal Vikas Yojana(PMKVY)aims to enable Indian youth to acquire industry-relevant skills,thereby facilitating formal employment.The National Apprenticeship Promotion Scheme(NAPS)promotes apprenticeships supported by financial incentives and technological and advocacy support.The Logistics Sector Skill Council(LSC)has introduced apprenticeship-embedded higher education programs,which provide a combination of academic study and practical apprenticeship opportunities under the NAPS.Deen Dayal Upadhyay Grameen Kaushal Yojana(DDU-GKY)offers placement-linked skilling programs in rural areas.The socially inclusive design of DDU-GKY ensures a focus on socially disadvantaged groups.This can enhance the technical skills of informal sector mechanics in ZET across the length and breadth of India.Incentivizing skilled mechanics in the informal sector to become instructors and mentors can aid in expanding the reach of such training programs.The erstwhile Skill Development Initiative Scheme(SDIS)of the Government of India was one of the first vocational training programs to involve the private sector.Under the SDIS,private players and small garages were offered financial incentives to provide hands-on training to informal sector workers(MSDE,n.d.).Small garages proficient in EV technology and operating in the informal sector can be recognized and incentivized to become training centers for EV mechanics in the informal sector.This would expand the number of training touchpoints for informal sector workers.26Just Transition to Zero-emission Trucking in IndiaMARKET-LED SKILLING The NSDC has launched a scheme for market-led,fee-based skilling to create an enabling ecosystem for skilling through private sector entities under various models.It has incentivized private players through funded partnerships(equity,loans,and grants)and non-funded partnerships(leveraging the brand name of the NSDC).Since the scheme is linked to market-based incentives,it may not be the most effective for skilling informal sector mechanics at scale.However,it can be leveraged depending on circumstances for training indirect formal sector job holders.PRIVATE SECTOR-LED SKILLINGSkill development programs can also be spearheaded by OEMs and component manufacturers,thereby training unorganized sector mechanics to be certified service technicians.For example,Hero Electric partnered with ReadyAssist,a roadside assistance company,to train and upskill 20,000 mechanics in servicing electric two-wheelers(Hero Electric,2022).The effective implementation of such programs requires a collaborative approach involving many stakeholders.Public-private partnership(PPP)models can leverage the expertise and resources of both the private sector and the government to address reskilling needs effectively.An example of a PPP model in skilling is that of Maruti Suzuki,the industry leader in the passenger car market,which has established the International Automotive Centre for Excellence as a joint venture with the Government of Gujarat.This center caters to the skill development of students who have completed schooling or who study in Industrial Training Institutes.It also offers a bachelors program in transportation and mobility.Another example of PPP is that of Ashok Leyland and the Government of Uttarakhand who have signed a memorandum of understanding to facilitate apprenticeships for 1,000 people for three years fostering skill development(Ashok Leyland,2024).The Automotive Skill Development Council(ASDC)can function as a vital cog in the just transition process,supported by industry bodies including the Society of Indian Automobile Manufacturers(SIAM),Automobile Component Manufacturers Association of India(ACMA),and FADA.The ASDC has taken steps to meet the evolving demands of the EV industry by launching programs to train technicians as EV service technicians in partnership with Livguard Batteries(ASDC,2023).The ASDC has also collaborated with Deutsche Gesellschaft fr Internationale Zusammenarbeit to develop a short-term training program for EV technicians (ASDC,2024).It is important to consider these training initiatives in the broader context of the trucking industry,which is largely unorganized.This presents challenges and opportunities in implementing comprehensive training and upskilling programs .The opportunities include improving competitiveness of the industry by using this transition as a pivot for investing more in skilling,building a broader ecosystem of skilling and connecting multiple initiatives by varied stakeholders.However,certain stakeholders in the ZET transition have requirements that cannot be met by skilling.Expansion of skilling and support for those stakeholder groups whose needs cannot be met by skilling will require funding.The government can create a Just Transition Fund for India to meet these objectives.Just Transition to Zero-emission Trucking in India274.2 STRUCTURING A JUST TRANSITION FUND FOR INDIASkilling initiatives for engendering a just transition require funding.Induced job holders who have a marginal existence in trucking clusters will require financial support in the form of grants or low-cost loans to transition to alternative livelihoods.The policy response for such funding needs would be for the government to capitalize a fund to engender a just transition.A design for a Just Transition Fund for India(JTFI)is provided in Figure 13.The proposed fund would focus both on skilling and financial support for impacted stakeholders.The Ministry of Skill Development and Entrepreneurship is ideally positioned to administer the fund,which can be deployed under the existing schemes of the government.A broad estimate of the size of the fund is INR 254 billion(USD 3.1 billion)1(see Annexure 4).It could be capitalized via the central government budget but could be open to fundraising from other sources such as CSR funds,as well as from multilateral development banks,development finance institutions,and development agencies.The fund allocation would support relevant government schemes which can then reach the ultimate beneficiaries.A steering committee comprising the MSDE and other relevant ministries could oversee the fund from a sectoral and just transition perspective to ensure optimal allocation.This committee would also monitor key performance indicators of the fund to ensure that its just transition objectives are met.The co-benefits of the transition such as its effects on health,society and the environment can also be monitored.The design also provides flexibility for the funds to be allocated for relevant government schemes and to modify allocation when those schemes are terminated or modified.Figure 13.Design of a Just Transition FundJust Transition Fund for IndiaGovernment budgetary allocationMDB fundingOther sources of fundingSchemes which focus on social benefitsAdministered by MSDE,supervised by a steering committee comprising relevant ministriesSchemes which focus on skillingGrantsSource:CPI analysis28Just Transition to Zero-emission Trucking in IndiaGlobally,there are examples of funds dedicated to a just transition.Box 4 explains the structure of one such fund the EU Just Transition Fund which has been structured to incorporate multiple sources of funding and address the just transition needs of multiple stakeholders and industries.Box 4.The EU Just Transition FundConsidering the EUs commitment to achieving net zero GHG emissions by 2050,the EU Just Transition Mechanism seeks to alleviate socio-economic impacts in regions reliant on carbon-intensive industries by promoting economic diversification and revitalization.The Mechanism has three pillars:the Just Transition Fund(JTF),Invest EU,and the Public Sector Loan Facility,with an overall financial package of at least EUR 100 billion from 2021 to 2027(European Commission,2020)Just Transition MechanismTo support and finance people and countries in the EU facing challenges due to the greentransitionPILLAR 1Just Transition Fundwill mobilizeinvestments in SMEs,R&D,environmentalrehabilitation,clean energy,up/reskilling of workers,and transformation of existing carbon-intensive installations when theseinvestments lead to substantial emission cuts and job losses.EUR 7.5 billionunder the EUs 2021-27 budget supplemented by national co-financing EUR 10 billionfrom the European Recovery Instrument Voluntary contributions by member states fromtheirEuropean Regional Development Fund&European Social Fund Plus allocationsPILLAR 2InvestEU Fund the EUs EUR 26.2 Bn budget guarantee program-will provide budgetary guarantee to financial institutions for a wide range of infrastructureprojects.TheInvestEU Advisory Hub will provide technical assistance for projects under pillars 2 and 3 of the JTM.PILLAR 3Public Sector Loan facilitycombines EUR 1.5 Bn grants from the EUbudget andEUR 10 Bn loansfrom the EuropeanInvestment Bank to mobilize public investments.The JTF strives to ensure a socially fair and equitable clean energy transition(Leppnen&Liefferink,2022).The JTF,initiated in 2021,will remain operational until 2027 with a total budget of EUR 17.5 billion.It encompasses 15 activities,including backing sustainable investments in technology and enterprises such as support for microenterprises,sustainable tourism,low-emission district heating,and energy storage technologies.It also supports socio-cultural projects addressing energy poverty,culture,education,and community building(EPRC,2021).The fund also aims to mitigate the socio-economic costs associated with the energy transition by focusing on environmental restoration,upskilling,and reskilling,and fostering job creation.This includes targeted programs and job-search assistance for affected workers in emerging sectors.The fund is expected to mobilize nearly EUR 30 billion in investments(WRI,2021).Just Transition to Zero-emission Trucking in India29The allocation to member states is based on five socio-economic criteria,including industrial GHG emissions,employment in industries located in regions with low carbon intensity,employment in coal and lignite mining,peat production,and oil shale and oil sands production(EPRC,2021).The EU budgetary spending on the JTF will be complemented by national co-financing.(European Commission,2021).The JTF plays a pivotal role in the European Green Deal and represents a significant step towards addressing the socio-economic challenges of transitioning to a low-carbon economy.The proposed JTFI could cover the reskilling needs of the formal and informal sectors in the trucking industry by providing grants to relevant government schemes(e.g.,the PMKVY)and departments(such as the ASDC).Mechanisms can be evolved for ring-fencing funding to ensure that it is used primarily to engender a just transition in the trucking sector.For those highly vulnerable stakeholders who cannot benefit from reskilling(induced jobs which are primarily in the informal sector),the fund could provide grants to various government schemes such as the MUDRA loan scheme.The ultimate beneficiaries could receive funds in the form of grants or concessional loans.In the case of the latter,the grants from the fund can be blended with other sources of debt to achieve concessional interest rates.30Just Transition to Zero-emission Trucking in India5.CONCLUSION AND NEXT STEPSFor effecting a just transition to ZETs,both skilling,and financing are critical to ensure adequate skills in the labor force and the development of alternative livelihoods.This report quantifies the implications of a just transition to zero-emission trucking in India.It lays the groundwork for calculating socio-economic costs and investment requirements for engendering a just transition in line with Indias climate related targets.The next step for enabling a just transition in this sector could be to identify impacted stakeholders and understand their needs in greater detail.This can be followed by the design of targeted policy responses,financial instruments and other mechanisms to address their needs and to enable co-benefits.Obtaining stakeholder feedback can help get their buy-in by helping them recognize the benefits of such interventions in the face of the challenges they face due to the transition.Pilot programs can be conducted to help refine the design of these interventions.The just transition financing facility can then be designed to act as a conduit for the flow of finance for a just transition.Just Transition to Zero-emission Trucking in India31ANNEXURESANNEXURE 1:VEHICLE CATEGORIZATIONThere are multiple methods of categorizing trucks including the Ministry of Road Transport and Highways(MoRTH)and Society of Indian Automobile Manufacturers(SIAM)classifications.Commercial vehicles,as categorized by MoRTH,are divided into two main groups:transport and non-transport.Transport vehicles,primarily designed for commercial purposes,encompass freight vehicles like multi-axle/articulated vehicles,trucks,lorries,and light commercial vehicles.Vehicles such as tractors and trailers are in the non-transport category,despite their use in transporting goods such as construction materials and agricultural produce.Within the transport vehicle category,multi-axle/articulated vehicles,trucks,and lorries are further classified as medium or heavy commercial vehicles(M/HDVs)based on their tonnage and gross vehicle weight(GVW).Category N encompasses all power-driven vehicles with at least four wheels used for the carriage of goods.These vehicle categories are laid out in Table A1 below.Table A1.MoRTH categorization of trucksSegmentGVW range,in tonnesCategoryPrefixesLCVGVW 3.5N1N1AMDV3.5 GVW 7.5N2N2A7.5 GVW 12N2N2BHDV12 GVW 18.5N3 2 Axle RigidN3A18.5 GVW 28N3 Multi Axle RigidN3B28 GVW 49N3 Multi Axle RigidN3C30 GVW 55N3 TractorN3DSource:AIS-017(Part 6)/D5 Apr 2019 and MoRTHGlobally,there is no universal definition of truck categories.In the EU,distinctions like N2(vehicles weighing more than 3.5 tons)and N3(vehicles weighing more than 16 tons)are employed,while China commonly classifies vehicles as light-duty(3.5-7.5 tons),medium-duty(7.5-12 tons),and heavy-duty(more than 12 tons)(GIZ,2020).In this report,the MoRTH segment categorization is followed.32Just Transition to Zero-emission Trucking in IndiaANNEXURE 2:TRUCKING CLUSTERS AND SURVEY METHODOLOGYA survey was conducted at 10 major trucking clusters across India,as listed in Table A2.The survey sites include five types of use cases:inland container depot(ICD),port,agri mandi(wholesale market),truck terminal,and transport nagar.Table A2.Survey locations#SITELOCATIONUSE-CATEGORY1ICD TughlaqabadDelhiICD2MIHANNagpurICD3Azadpur MandiDelhiAgri Mandi4Koyambedu MarketChennaiAgri Mandi5JNPTMumbaiPort6Haldia PortKolkataPort7D Devraj Urs Truck Terminal YeshavntapuraBengaluruTruck terminal8Jagatpur Truck TerminalCuttackTruck terminal9Madhavaram Truck TerminalChennaiTruck terminal10Sanjay Gandhi Transport NagarDelhiTruck Terminal Truck Building ClusterThe survey methodology is summarized in Figure A1.First,a reconnaissance survey was conducted at sites to map sampled locations.These include off-and on-street truck parking areas and establishments(e.g.,warehouses,workshops,restaurants,shops,street vendors,etc.)where drivers spend money either to get truck-related work done or for personal consumption(e.g.,food,clothes,water,tea,sweets,medicine).Figure A1.Survey methodologyDirect jobsIndirect induced jobsFinalization of questionnaireMapping of sample capturing spotsReconnaissance surveyInception of workUse case locations surveyEstimated total number of trucks in a dayNumber of direct jobs(drivers helpers)No.of workers in establishments(indirect,induced)Ratio of direct jobs to indirect jobsRatio of direct jobs to induced jobsAverage waiting timeTotal tonnage handled per dayTruck operator detailsTruck detailsTruck operation detailsEstablishment typeWorkers in establishmentsIncome of workersSite visit for surveyTrucking Survey QuestionnaireJust Transition to Zero-emission Trucking in India33QUESTIONNAIRE DESIGNThe trucking survey questionnaire was prepared in two sections to encompass three categories of employment:direct,indirect,and induced.An extensive literature review was conducted on these employment types to establish precise definitions for the project.Direct Jobs(for drivers):The direct jobs survey includes questions for drivers on details of their truck operator,truck,and its operations(Table A3).Table A3.Information gathered and output in the survey of direct jobsS.No.Input received from surveyOutput 1Gross Vehicle Weight of truckTruck GVW(tonnes)2Daily distance covered by truckAverage km covered per day(by truck type)3Salary of driver Average income of driver(INR per month)4Salary of helper Average income of helper(INR per month)5Waiting hoursTypical time of stay at locationIndirect and induced jobs(for establishments):The establishment survey includes questions on establishment type,enterprise sub-category,scale of establishment,skill and range of education level of workers,workers in establishments,income of workers and estimated number of establishments at the activity location.This provided the outputs shown in Table A4.Table A4.Information gathered and output in the survey of establishmentsS.No.Input received from survey Output 1Enterprise sub-categoryEstablishments activities description2Estimated number of establishments at the activity locationEstimated total number of establishments3Number of workers(total&full time)Estimated number of workers in establishmentsEstimated percentage of full-time workers4Average annual/monthly income of workers(INR)Average income of workers(INR per month)in establishments5Total number of workers/total estimated number of establishmentsNumber of workers per establishmentThe direct jobs survey and establishment survey provided information on the number of direct,(informal)indirect and induced jobs in these trucking clusters.Using this data,subsequent calculations are made to arrive at the ratio between direct and indirect jobs and direct and induced jobs.34Just Transition to Zero-emission Trucking in IndiaANNEXURE 3:METHODOLOGY FOR ZET FORECASTSCENARIOSThe ZET forecast has been derived considering two scenarios.Scenario 1 considers a business-as-usual trajectory with no major policies introduced to improve ZET penetration.Scenario 2 considers an ambitious trajectory with sector-specific policies in line with the governments net-zero and climate targets.PERIOD OF ANALYSISThe period of analysis for this exercise is from FY 2024 to FY 2040.Three growth periods have been built within the timeframe of the sales forecast with 2030,2035 and 2040 being assumed as the tipping points,and have been termed as Current Policy phase(FY 2024 to FY 2030),Growth Phase 1(FY 2031 to FY 2035)and Growth Phase 2(FY 2036 to FY 2040).While the sales between FY 2024 and FY 2030 are assumed to be driven solely due to current policies of the government,there is a multiplier effect in the period beyond 2030 due to factors such as reduced TCO due to reducing battery prices and improvement in cell chemistries.In addition,rising diesel prices will have a positive impact on ZET sales once TCO parity is achieved for trucks.VEHICLE SEGMENTSThe analysis has been performed for Light Commercial Vehicles(LCVs),Medium Duty Vehicles(MDVs),and Heavy-Duty Vehicles(HDVs).DRIVERS OF GROWTH Cost of Battery:The cost of lithium-ion batteries is forecasted to come down from USD 139 in 2023 to about USD 85/kWh in 2030 and USD 59/kWh in 2040.Just Transition to Zero-emission Trucking in India35Figure A2.Historical and projected cost of Li-ion battery packsActualProjected0100200300400500600700800900FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22FY23FY24FY25FY26FY27FY28FY29FY30FY31FY32FY33FY34FY35FY36FY37FY38FY39FY40USD/kWhSource:(BloombergNEF,2023),CPI Analysis Diesel Price:The average growth rate of diesel price in India is estimated to be 6.37tween FY 2014 and FY 2023 and this is anticipated to increase during the analysis period.Figure A3.Diesel prices(INR/liter)51.9753.3847.0153.2458.8068.2265.7873.5887.4290.580204060801002014201520162017201820192020202120222023Source:PPAC36Just Transition to Zero-emission Trucking in IndiaAPPROACHAssessment of baseline sales of all trucksLong-term forecast of sales of all trucksEstimating the share of ZETs in truck salesForecasted ZET salesThe sales data of trucks in India have been compiled from primary data from FADA.As the historical data for segment-wise sales of trucks in the state of Telangana is not available in the public domain,the same was estimated and pro-rated to the truck sales data at the national level.Industrial and manufacturing activities play a vital role in the growth of the truck market in India.The sales projection until FY 2040 has been done using the CAGR of the Index of Industrial Production(IIP)from FY 2014 to FY 2023(Table A5).The IIP of different goods has been considered for the three segments based on the respective use cases.For LCVs,the IIP of non-durable consumer goods has been considered owing to the predominant use of LCVs in last-mile deliveries of fast-moving consumer goods and consumable goods associated with e-commerce.For M/HDVs,the IIP of intermediate goods(B2B deliveries),infrastructure and construction goods has been considered to project the sales until FY 2040.Table A5.The growth rate of sales in truck segmentsSegmentFY15-FY23(CAGR)FY24-FY40(CAGR projection based on IIP)Truck4.54%3.52%LCV 4.68%3.33%MDV 5.70%3.81%HDV 4.05%3.81%The inputs shown in Table A6 have been factored in the baseline truck sales numbers to arrive at the forecasted ZET sales in each of the analysis intervals.Just Transition to Zero-emission Trucking in India37Table A6.Inputs for baseline ZET sales numbersDriver inputsScenarioVehicle segmentCurrent policy (FY24-FY30)Growth phase 1 (FY31-FY35)Growth phase 2(FY36-FY40)Target rate of sales by end of period(Rt)1LCV5 %M/HDV1.5%3%6%2LCV10%M/HDV3%6ttery multiplier(Mb)1,2All00.20.1Diesel multiplier(Md)1,2All00.230.23Formula for calculating the forecasted sales:SF=(SB*Rt)x(1 Mb Md)Where,SF =forecasted sales for the fiscal yearSB=baseline forecasted sales for fiscal yearRt=target rate of sales by the end of periodMb=multiplier for incremental sales due to decline in battery pricesMd=multiplier for incremental sales due to an increase in diesel price38Just Transition to Zero-emission Trucking in IndiaANNEXURE 4:ESTIMATE OF THE SIZE OF THE PROPOSED JUST TRANSITION FUND FOR INDIAThere are an estimated 9.4 million indirect jobs in the trucking sector,of which the informal sector accounts for around 5.6 million and the formal sector for 3.8 million.It is estimated that 63%of the automotive workforce will be impacted by the transition(CEEW,2019).Assuming the cost of reskilling per worker in the formal sector is INR 50,000(USD 602)1 and that in the informal sector is INR15,000(USD 181)1,if 50%of the indirect jobs are impacted by the transition,the cost of reskilling would be INR 137 billion(USD 1.65 billion)1(Table A7).Table A7.Cost of reskilling of indirect job holdersPercentage of indirect jobs impacted by ZET transition50p%Cost of reskilling of impacted workers in the formal sector(in INR billion)95114133152Cost of reskilling of impacted workers in the informal sector(in INR billion)42505967Total cost of reskilling for impacted indirect job holders(in INR billion)137164192219The number of induced jobs related to the trucking sector is estimated at around 4 million.If we assume a 50%split between individual jobs(proprietorships)and small businesses,which employ three people on average,this leads to 2 million individual proprietors and 0.67 million small businesses.Assuming the individual proprietorships avail INR 50,000(USD 602)1 in loans on average and small businesses avail INR 200,000(USD 2,410)1 in loans on average under the MUDRA scheme,Table A8 provides an estimate of the quantum of loans required for induced job holders to ensure they establish alternative livelihoods.Table A8.Quantum of loans for impacted induced job holdersPercentage of induced jobs that will be impacted by the transition50p%Amount of loan that would be required by individuals(in INR billion)50 60 70 80 Amount of loan that would be required by small enterprises(in INR billion)67 80 93 107 Total loan amount required by impacted induced job holders(in INR billion)117 140 163 187 Assuming that 50%of indirect job holders and 50%of induced job holders are impacted,an amount of INR 254 billion will be required to capitalize the JTFI.Just Transition to Zero-emission Trucking in India39REFERENCESAbhyankar,N.,Gopinathan,N.,Khandekar,A.,Karali,N.,Phadke,A.,&Rajagopal,D.(2022).Freight Trucks in India are Primed for Electrification.Lawrence Berkeley National Laboratory.Retrieved from https:/eta-publications.lbl.gov/sites/default/files/electric_trucks_in_india_-_final_nov7.pdfAdani Gas.(2022).CNG Station:Dealer-owned Dealer operated(DODO)Model.Retrieved from https:/ Propsulsion Centre UK.(2023,Mar).Battery and fuel cell future cost comparison.Retrieved from https:/www.apcuk.co.uk/wp-content/uploads/2023/02/Battery-and-Fuel-Cell-Cost-Comparison-report.pdfAequs.(2023).Aequs Sustainbility Report.Retrieved from https:/ Freight:Policy Toolkit for Medium and Heavy-Duty Truck Electrification in India.NRDC.Retrieved from https:/www.nrdcindia.org/pdf/NRDC_ Heavy_Trucking.pdfASDC.(2023).Enhancing Skills for a Sustainable Future.Retrieved from https:/www.asdc.org.in/ASDC-CSR-2023.pdfASDC.(2024).Empowering Futures for EV.Retrieved from https:/www.asdc.org.in/uploads/1463615447040424025511.pdfAshok Leyland.(2024,Feb).Ashok Leyland takes strides in skill development agenda in Uttarakhand.Retrieved from https:/ Battery Pack Prices Hit Record Low of$139/kWh.Retrieved from https:/ Safety Council.(2022).Driving into danger:why Indian truckers are at risk.Retrieved from https:/www.britsafe.in/safety-management-news/2022/driving-into-danger-why-indian-truckers-are-at-riskC.H.Robinson.(2024).Global Freight Market Insights.Retrieved from https:/ to Zero.Retrieved Jan 2024,from Drive to Zero ZETI Data Explorer:https:/ 06).Indias Electric Vehicle Transition-Impact on Auto Industry and Building the EV Ecosystem.Retrieved from https:/www.ceew.in/publications/electric-vehicle-transition-and-impact-on-indian-economy-auto-industry40Just Transition to Zero-emission Trucking in IndiaCEEW.(2020,Nov).Can Electric Mobility Support Indias Sustainable Economic Recovery Post COVID-19?Retrieved Jun 15,2022,from https:/www.ceew.in/sites/default/files/CEEW-Indias-EV-Transition-Post-COVID-19-22Dec20.pdfCentral Electricity Authority.(2023,Dec).CO 2 Baseline Database for the Indian Power Sector-User Guide.Retrieved from Central Electricity Authority:https:/cea.nic.in/wp-content/uploads/baseline/2024/04/User_Guide_Version_19.0.pdfCRISIL.(2018,Nov).Road turns rough for small fleet operators.Retrieved from https:/ time of reckoning:Road logistics in India.Drive to Zero.(2020,Oct).THE BEACHHEAD MODEL-CATALYZING MASS-MARKET OPPORTUNITIES FOR ZERO-EMISSION COMMERCIAL VEHICLES.Retrieved from https:/globaldrivetozero.org/publication/the-beachhead-model/EPRC.(2021).The Just Transition Fund:Will the territorial plans deliver?Retrieved from https:/eprc-strath.org/the-just-transition-fund-will-the-territorial-plans-deliver/European Commission.(2020).Financing the green transition:The European Green Deal Investment Plan and Just Transition Mechanism.Retrieved from https:/ec.europa.eu/regional_policy/en/newsroom/news/2020/01/14-01-2020-financing-the-green-transition-the-european-green-deal-investment-plan-and-just-transition-mechanismEuropean Commission.(2021).The Just Transition Fund.Retrieved from https:/commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/finance-and-green-deal/just-transition-mechanism/just-transition-funding-sources_enEuropean Environment Agency.(2024,Feb).Delivering justice in sustainability transitions.Retrieved from https:/www.eea.europa.eu/publications/delivering-justice-in-sustainability-transitionsEuropean Environmental Agency.(2024,Feb 28).Delivering justice in sustainability transitions.Retrieved from https:/www.eea.europa.eu/publications/delivering-justice-in-sustainability-transitionsGIZ.(2020).Analysis of the Chinese Truck Market and Assessment of Future Power Technologies.Retrieved from https:/changing-transport.org/publications/analysis-of-the-chinese-truck-market-and-assessment-of-future-power-technologies/Hero Electric.(2022,Feb).Hero Electric joins hands with ReadyAssist to train 20,000 mechanics.Retrieved from https:/heroelectric.in/hero-electric-joins-hands-with-readyassist-to-train-20000-mechanics/Hongyang Cui,Yihao Xie,and Tianlin Niu.(2023,August 09).The International Council on Clean Transportation.Retrieved from https:/theicct.org/china-is-propelling-its-electric-truck-market-aug23/HPCL.(2024).E-fuel station.Retrieved from https:/ Transition to Zero-emission Trucking in India41ICCT.(2023,Feb).A comparison of the life-cycle greenhouse gas emissions of European heavy-duty vehicles and fuels.Retrieved from ICCT:https:/theicct.org/wp-content/uploads/2023/02/lca-ghg-emissions-hdv-fuels-europe-feb23.pdfICCT.(2023,Nov 23).A total cost of ownership comparison of truck decarbonization pathways in Europe.Retrieved from https:/theicct.org/wp-content/uploads/2023/11/ID-54-EU-HDV-TCO_paper_final2.pdfICCT.(2023,May).Accelerating ZEV adoption in fleets to decarbonize road transportation.Retrieved from https:/theicct.org/wp-content/uploads/2023/05/ZEVTC_fleets-briefing_final.pdfIEA.(2023).Global EV Outlook.Paris:International Energy Agency.IEA.(2023).Transitioning Indias Road Transport Sector:Realising climate and air quality benefits.Retrieved from https:/www.iea.org/reports/transitioning-indias-road-transport-sectorIISD.(2013,Sep).The Impacts of Diesel Price Increases on Indias Trucking Industry.Retrieved from https:/irade.org/ffs_india_transport_policy_brief.pdfJMK Research&Analytics.(2024,Mar).E-Trucks Market in India 2024.Retrieved from JMK Research:https:/ formulation,and the EU institutional context:The case of the Just Transition Fund.European Policy Analysis,8(1),51-67.Retrieved from https:/doi.org/10.1002/epa2.1136MoRTH.(2023,Nov 11).Retrieved from VAHAN DASHBOARD:https:/vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtmlMSDE.(n.d.).Skill Development Initiative Scheme.Retrieved Jul 2024,from https:/www.sdis.gov.in/sdi/NITI Aayog.(2021,Jun).Fast Tracking Freight in India a Roadmap for Clean and Cost-Effective Goods Transport.Retrieved from https:/www.niti.gov.in/sites/default/files/2021-06/FreightReportNationalLevel.pdfNITI Aayog.(2022,Sep).Transforming Trucking in India.Retrieved from https:/www.niti.gov.in/sites/default/files/2023-02/ZETReport09092022.pdfNITI Aayog.(2023,Mar 10).Technical Roadmap for Deployment of Zero-Emission Trucking in India.Retrieved from https:/efastindia.org/technical-roadmap-deployment-zero-emission-trucking-indiaPetroleum Planning&Analysis Cell.(2024).Import/Export data.Retrieved Jun 15,2022,from https:/www.ppac.gov.in/content/212_1_ImportExport.aspxPIB.(n.d.).12,146 public EV charging stations operational across the country.Retrieved from https:/pib.gov.in/PressReleaseIframePage.aspx?PRID=2003003PIB.(2023,Feb 17).The AUtomobile Sector in India.Retrieved from https:/static.pib.gov.in/WriteReadData/specificdocs/documents/2023/feb/doc2023217160601.pdfPPHF.(2022).Study Report:Health and Well-being of Truck Drivers in India:A mixed methods study on the situation and way forward.Retrieved from https:/pphfglobal.org/wp-content/42Just Transition to Zero-emission Trucking in Indiauploads/2023/01/Report-On-The-Study-Of-_The-Health-And-Well-Being-Of-Truck-Drivers-In-India.pdfRaghuram,G.(2015,Dec).An Overview of the Trucking Sector in India:Significance and Structure.Retrieved from Indian Institute of Management,Ahmedabad:https:/www.iima.ac.in/sites/default/files/rnpfiles/12319057932015-12-02.pdfResearch and Markets.(2022,Jun).India Medium and Heavy Trucks Market Summary,Competitive Analysis and Forecast,2017-2026.Retrieved from https:/ Global.(2018,Feb 15).Batteries Challenge Gas Peakers for Californias Capacity Needs.Retrieved from New Battery Technology for the Future:https:/ Economic Forum and Partners to Develop First Zero-Emissions Road Freight Cluster in India.Retrieved from https:/www.weforum.org/press/2023/07/world-economic-forum-and-partners-to-develop-first-zero-emissions-road-fWRI.(2021).European Unions Just Transition Mechanism:Transnational Funding and Support for a Just Transition.Retrieved from https:/www.wri.org/update/european-unions-just-transition-mechanism-transnational-funding-and-support-just-transitionclimatepolicyinitiative.org
2024-10-28
50页
5星级
SDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSINTRODUCTIONThe Software-Defined Vehicle(SDV)is set to revolutionize the passenger vehicle market,opening up new and better experiences for drivers,and providing additional revenue-generating possibilities for automakers.In recent years,more and more vehicle functions have become digitized,with legacy mechanical systems replaced and new features incorporated through the introduction of specialized Electronic Control Units(ECUs)running the necessary software.The next step in the evolution of the automotive Electrical/Electronic(E/E)architecture will be vehicle platforms that are built around software from the very start,with the entire value proposition of the vehicle to the end user defined,and redefined in the software domain.Historically,Original Equipment Manufacturers(OEMs)have configured their vehicles in the hardware domain,leveraging a suite of diverse hardware iterations to deliver a range of value propositions to different end users.Producing all of these hardware configurations is costly for automakers and provides the consumer with a static experience throughout the vehicles lifecycle that can quickly feel dated.In the future,OEMs will operate a smaller number of SDV platforms,shaping and reshaping the consumer experience in software,leveraging Over-the-Air(OTA)updates to provide new experiences for years after the vehicle is first sold.CONTENTSINTRODUCTION.1COMPUTE.2MIDDLEWARE AND HYPERVISORS.4APPLICATIONS,TOOLCHAINS,AND SDKS.5THE CLOUD.5CONCLUSIONS.7James Hodgson,Research DirectorSDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSSDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSThis will simplify design and manufacturing for the automaker,while providing the consumer with a vehicle that can be kept secure and up-to-date during years of ownership.This ability to update vehicles securely and remotely will open up new business models for automakers,and the potential to generate a new revenue stream by making new features available to cars already on the road,even after the vehicle has passed from its first owner to subsequent owners.The SDV vision is compelling,both for automakers and their customers,but realizing this vision will require a whole new philosophy toward automotive design,as well as the coordination of several key enabling technologies.In order to make the jump from software-enabled functions to a truly software-defined vehicle,automakers must develop SDV platforms that are upgradeable,flexible,and customizable,supporting Artificial Intelligence(AI)-based applications and services,and critically,they must have unimpeachable safety and security.Delivering this challenging blend of performance,safety,and security will require a comprehensive stack of enabling technologies,including powerful embedded compute,middleware,applications,and the toolchains to develop them,as well as a cloud platform to develop and deploy new features to connected cars all over the world.Standing up this technology stack will be too much for any automaker to do alonethey will need to identify the right partners capable of integrating the key technology layers of the SDV,while providing the necessary avenues for automakers to innovate,differentiate,and establish their brands in the new SDV world.COMPUTEThe foundation of the SDV is powerful,embedded compute capable of running a diverse set of software tasks.In this regard,the automotive industry is set to benefit strongly from semiconductor development in parallel industries such mobile devices and data centers.To deliver on the SDV promise,the compute platform must feature the following:Headroom:High-Performance Compute(HPC)is not only needed to concurrently host numerous applications,but it is also the key to unlocking longevity.Shipping vehicles with only the compute performance needed for the feature set at the point of sale leaves no maneuverability for rolling out new features through OTA updates,and generating related post-sales revenue.Therefore,automakers need a compute platform with excess capacity to allow headroom for future updates,with many OEMs considering capacity of 30%to 50%in their SDV platforms.Heterogeneity:Supporting a diverse set of compute tasks requires a heterogenous compute platform featuring a broad range of Intellectual Property(IP),including a Central Processing Unit(CPU),Graphics Processing Unit(GPU),Digital Signal Processing(DSP),and Neural Network Accelerator(NNA).A comprehensive set of IP ensures the flexibility necessary to roll out new applications in the future,giving the OEM confidence that the SDVs will remain addressable for many years to come,and increasing the possibility that they will be able to roll out whatever applications and experiences become popular in consumer electronics in the future.SDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSEnergyEfficiency:Minimizing energy consumption is a key requirement for the automotive environment.Primarily,this is to minimize generation of excess heat,as the additional engineering effort and hardware for heat dissipation quickly becomes expensive for the OEM.In Electric Vehicles(EVs),energy efficiency takes on even greater importance,enabling longer rangesa critical area of competition between automakers.As more energy-efficient silicon is brought to the automotive industry,benefiting from innovations in the mobile devices space,automakers will be able to deliver compute-heavy experiences without paying a premium in their thermal engineering budgets or EV range.EmbeddedNeuralNetworkAcceleration:With AI driving so many popular use cases,it is essential that automakers specify compute platforms with powerful and generalized NNA.Complementing cloud-based AI functions,embedded AI will enable a more responsive experience for consumers.In many cases,AI-based use cases cannot be delivered through cloud compute,due to the mission-critical nature of the application in question.For example,in autonomous vehicle applications,AI plays a critical role in almost every stage of the software workflow,including perception,sensor fusion,and motion planning.The inevitable latencies incurred when relying on the cloud,combined with the possibility of gaps in connectivity coverage,mean that it is not possible to rely on off-board processing to accelerate these neural networks.At the same time,for non-mission-critical and less latency-sensitive functions,there can be advantages in going to the cloud,which will continue to evolve in capability,even after the vehicle has been shipped.Therefore,a hybrid approach is clearly required,combining embedded and cloud AI acceleration to deliver the reliability and low latency of embedded acceleration with the flexibility of the cloud.Automotive-Grade Quality:The passenger vehicle is a harsh environment for silicon.A combination of temperature extremes and exposure to moisture,Electromagnetic Compatibility(EMC)interference,dust,and other debris requires that an SDV compute platform be designed and manufactured according to rigorous automotive-grade standards.These standards,such as AEC-Q100 and ISO 26262 not only help minimize the possibility of faults occurring,but provide mechanisms to safely accommodate for faults in the rare event that they do occur.Overall,automakers need a silicon partner with a broad portfolio of IP,support for embedded AI inferencing,and a robust mechanism to take the best of silicon development in the mobile,Personal Computer(PC),and data center spaces,and apply the necessary ruggedization for deployment in the automotive market.SDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSMIDDLEWARE AND HYPERVISORSAs important as the silicon foundation is the middleware layer that enables the hardware layer to interact seamlessly and efficiently with the applications that ultimately shape the consumers experience with the vehicle.Middleware provides a vital abstraction layer between the hardware of the SDV compute platform and higher-level applications,with the interface allowing different applications to be developed,updated,and deployed by independent domain teams within the automaker,or by separate third-party suppliers.Middleware is,therefore,essential to breaking the link between hardware development and software development,a vital step in instilling a software-led design culture,and allowing automakers to work with multiple development partners to curate a unique customer experience.The legacy design approach of adding a new ECU for every new feature has resulted in an E/E architecture that is bloated and heavy,incurring significant costs in terms of the Bill of Materials(BOM)and the vehicle weight.The transition to SDVs provides an opportunity for automakers to rationalize the E/E architecture,with more powerful and centralized controllers replacing multiple ECUs.In order to centralize controllers to the greatest possible extent,automakers will need to find ways to safely execute mission-critical and non-mission-critical functions on shared hardware.In a high-powered,heterogeneous compute platform that spans several domains of the vehicle(e.g.,Advanced Driver-Assistance Systems(ADAS),infotainment,and the instrument cluster),a method of virtualization is needed to isolate the safety-critical functions from non-critical functions,guaranteeing the safety and integrity of the system.For example,failures in infotainment features should not affect the performance of the instrument cluster or an active safety feature.To address this,automotive compute systems use a hypervisor.This is a compute layer above the System-on-Chip(SoC)that allows the secure isolation of domains from each other,while allowing dynamic allocation of compute resources to different domains depending on compute demands and safety-criticality.This unlocks the cost reduction,and space and weight savings potential from compute consolidation that give OEMs a tangible advantage in their SDV transitions.In summary,automakers need semiconductor partners that can match powerful and flexible silicon with the necessary abstraction and virtualization layers to enable development teams and partners to take full advantage of the capabilities of the hardware layer.SDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSAPPLICATIONS,TOOLCHAINS,AND SDKSUltimately,it is the combination of software applications that will shape the unique and personalized experience that every SDV driver will enjoy.Ideally,automakers should look for a semiconductor partner that has a suite of the most common automotive applications on tap,with easy customization options to enable the table stakes applications to be readily adapted to the automakers brand.This is important as automakers must avoid duplication of effort in order to devote their stretched resources toward developing unique and differentiated applications.To achieve this,automakers also need to partner with suppliers of software toolchains that can streamline the development,testing,and verification of new applications.This is important to maintain a fast time to market and a regular cadence of new features reaching SDVsa key consideration of any successful subscription-based business model.Furthermore,in order to deliver a wide variety of novel features,automakers need to bolster their own internally-developed applications with applications sourced from third-party developers and other suppliers.SDKs play a key role here,allowing the automaker to partner with third parties seamlessly and without incurring an intolerable engineering burden for the automaker.A successful SDV strategy will require an automaker to regularly develop new experiences and deploy them in a timely manner.Having access to a suite of off-the-shelf applications for the most common and table stakes applications will help an automaker focus its resources on innovation.Furthermore,SDKs and relevant software toolchains make it easier for the OEM to work with multiple partners to safely,securely,and rapidly roll out new applications.THE CLOUDThe legacy automotive strategy has been laser-focused on selling new vehicles.Innovative features were differentiators to drive higher product sales,and Customer Relationship Management(CRM)was engineered to maximize the chances that a consumer would come back to the automaker for their next car purchase.In the SDV future,greater focus will be placed on the entire life cycle of each vehicle.Innovative features will no longer be reserved for the latest models,but will instead be made available to connected vehicles already on the road.New business models will enable automakers to build a revenue stream that is independent of the current state of the new vehicle sales market and instead correlates to the installed base of reconfigurable SDVs in circulation.Depending on how well the automaker has future-proofed its SDV platforms with headroom and flexibility,every SDV could generate revenue for the automaker for years after it is first sold.SDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSOnce again,as important as it is to make the right decisions on the specifications of the embedded compute platform,the automakers ability to monetize that headroom and flexibility depends on higher technology layers,particularly the SDV cloud platform.The SDV cloud platform layer enables the automaker to perform the following functions:Managethegrowingfleetofconnectedandsoftware-definedvehicles,monitoring for security events as they arise and applying the necessary corrective updates with minimal disruption to the end user.DeployOTAupdatestovehicles,with the best platforms having mechanisms to account for challenges like intermittent connectivity and low-battery levels.Ingestdatafromtheinstalled-baseofconnectedSDVsto develop new connected services.The typical vehicle being shipped today features an impressive sensor set,delivering rich semantic insights on road-adjacent events over a wide geographic area.By collecting these data at scale,automakers can develop new features and services to generate new revenue streams.A popular example is that of digital maps,which can be curated and maintained based on the experience of vehicles in the field,enabling fast time to reflect reality and,in turn,providing a vital enabling technology for autonomous driving.Adoptcloud-nativeDevelopmentOperations(DevOps)tools to successfully scale up innovation and collaboration between automakers and their suppliers,accelerating software development through the use of digital twin virtual prototyping.The foundation of a successful cloud-based DevOps platform is environmental parity between the hardware platform(SoC,ECU)as it will behave in the field and its virtual equivalent in the cloud.This involves close collaboration between the silicon supplier and the hyperscaler,and gives confidence to developers that the digital twin can be relied upon.This shared environment allows automakers,in partnership with their suppliers,to develop,test,and validate new features rapidly,without the need to resort to legacy requirements engineering.A major challenge that automakers are encountering as they make the SDV transition is the need to coordinate a large network of third-party suppliers,with legacy approaches to coordinating changes between the OEM and the supplier proving unsustainable as the market evolves from software-defined functions to software-defined cars.A shared digital twin,incorporating all of the necessary tools for code development,review,and analysis provides the ideal interface to bring together automakers and their suppliers,accelerating software development.Meanwhile,shift-left testing will help identify any bugs or errors earlier,saving on the costs associated with physical prototyping.Overall,cloud-based DevOps will play an essential role in accelerating both development and testing,while also reducing costs.Time to market will soon become a key point of competitive differentiation between automakers.An SDV cloud platform will be an essential technology layer to enabling lifecycle management.SDV TECHNOLOGY PARTNERSHIPS:CRUCIAL FOR SUSTAINABLE TECHNOLOGY SOLUTIONSCONCLUSIONSGreat software needs great silicon,and the automotive market is set to benefit significantly from the silicon that continues to bring success to other software-defined devices like smartphones,PCs,and other consumer electronics.However,powerful silicon alone is not enough,and given the significant investments that automakers will need to pour into SDV compute platforms,it is important that they form the right partnerships to ensure that these SDV compute platforms can be leveraged to their fullest,revenue-generating potential.Ultimately,there are significant advantages for automakers selecting semiconductor partners that vertically integrate the full stack of technology layers discussed in this paper on the automakers behalf.Without a full stack of enabling technology layers,it will prove very challenging for any semiconductor supplier to empower its automotive customers to make effective use of its silicon,and risk setting its OEM partners up for failure,putting them in a position of investing in HPC,without the tools to build an SDV strategy on this hardware foundation.Getting the right specification in the compute hardware layer requires a semiconductor partner with traction in the markets that are driving energy-efficient,AI-capable silicon,but one that also has the scale necessary to properly ruggedize its technology for the automotive market.The scale of the pivot that the SDV transition represents for the automotive industry cannot be underestimatedit represents a fundamental shift in design philosophy and business models that has shaped the passenger vehicle market for decades.Automakers cannot make this transition alone and need the support of experienced technology partners.Partnering with a semiconductor supplier that can provide the necessary full stack of technology layers to facilitate collaboration between automakers and developers with the right tools to test and validate new features should be a strategic priority for every automaker.Published October 2024 157 Columbus AvenueNew York,NY 10023Tel: 1 516-624-WeEmpowerTechnologyInnovationandStrategicImplementation.ABI Research is uniquely positioned at the intersection of end-market companies and technology solution providers,serving as the bridge that seamlessly connects these two segments by driving successful technology implementations and delivering strategies that are proven to attract and retain customers.2024 ABI Research.Used by permission.ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of objective research by ABI Research staff at the time of data collection.The opinions of ABI Research or its analysts on any subject are continually revised based on the most current data available.The information contained herein has been obtained from sources believed to be reliable.ABI Research disclaims all warranties,express or implied,with respect to this research,including any warranties of merchantability or fitness for a particular purpose.
2024-10-25
8页
5星级
An excerpt from the Gartner/AWESOME Women in Supply Chain Survey2024 Women in Supply Chain Survey:Re.
2024-10-25
10页
5星级
Global Automotive Risk Outlook 2024What does the future hold for OEMs and component manufacturers?WTW Global Automotive STABLE OF CONTENTSIntroduction 4Key findings 5Sector overview and risk landscape 6Automation,software and digitalization 10Electrification and alternative energy 14Supply chain 17Contractual responsibilities and liabilities 19Risk management and insurance 21Conclusion 254/Global Automotive Risk Outlook 2024 The pace of change within the automotive sector is unprecedented,where modern vehicles are viewed as computers on wheels as much as they are machines.Innovation within software and electronics applications enables vehicles to predict,identify and avoid potential collisions.With over 30,000 individual components in vehicles rolling off factory floors today,the level of integration is unprecedented.But what happens when one of these products fail?As well as navigating the fast pace of electrification,automation and connectivity,manufacturers must also negotiate new contractual roles and responsibilities,and plan for potential liabilities in case of,as yet unknown,technological defects.At this time of great risk and opportunity we surveyed 500 leading companies around the world,to find out how they see the industry developing.This includes original equipment manufacturers(OEMs)and component manufacturers,to highlight the unique challenges encountered at different stages of the supply chain.We found that businesses are broadly optimistic about the future,despite various headwinds.With global conflicts and trade tensions on the rise,ESG requirements and regulations becoming more onerous,and the risks associated with software and autonomy yet to be fully understood,the sector faces a number of new challenges.Companies are increasingly dependent on third party software and more enabled by the benefits it brings,such as leveraging technology to identify defects earlier,before they become critical.But,as we move into an era of highly computerised,hyper-connected vehicles,few are sure where the liability for faults will begin and end.IntroductionRethinking the risk landscape of automotive manufacturingAbout the surveyWhen Autumn 2023Who 500 senior executives,including C-suite and heads of finance,risk,HR,sales,marketing,procurement,legal,compliance,governance and corporate communicationsType of business OEMs,and tier 1,2 and 3 manufacturers of automotive componentsWhere more than 20 countries in Europe,Asia Pacific,North and South America,and the Middle East Size 56%over$1bn revenue;44%$100m-$1bn40%of miles driven in Europe could be by autonomous vehicles in 2030.11 PWC Five trends transforming the automotive industry https:/ Global Automotive Risk Outlook 2024 /5Key findingsFirms are positive about their prospects78%of automotive manufacturers said they were either somewhat optimistic or very optimistic about their organizations prospects over the next two years.Geopolitics is the industrys biggest concernThe conflict in Ukraine and trade tensions between the U.S.and China pushed geopolitics to the top of the risk table,named by 81%as a concern over the next five years.Digitalization will make it easier to identify defects82%agree or strongly agree that the increasing digitalization of components will make it easier to identify product defects.Contracts put financial squeeze on component makers75%of Tier 1,2 and 3 manufacturers agreed or slightly agreed they face increasing financial exposure because of contractual obligations from OEMs.Safety is the top barrier to adoption of EVs50%named safety as a barrier,reflecting concerns about the risk of fires caused by thermal warming.Only 18%cited infrastructure among their top barriers.Liquidity is top strategic objective39%named increasing liquidity as a top strategic priority,as they seek funds to invest in new technologies and manage rapid change.Manufacturers rely heavily on third party software61%rely on a mix of in-house and third-party suppliers,with 17%completely reliant on third parties.Just 22%said they made all of their own software.Its not clear who is liable for product defectsOnly 9%strongly agreed that its clear who is liable for faults between software developers,component manufacturers and OEMs when a product fails.56%slightly agreed.Hydrogen will be viable alternative to electric vehicles72%said that hydrogen cell technology will become a viable alternative to EVs in the next 10 years,reflecting growing doubts about the pace and scale of electrification.Just in time has had its day77%strongly agreed or slightly agreed that just-in-time supply chain strategies are no longer fit for purpose following recent supply chain disruption and rising global instability.6/Global Automotive Risk Outlook 2024 Sector overview and risk landscapeTransformation will be a bumpy road for manufacturersThe automotive industry is going through one of the greatest periods of transformation in its history,posing huge questions and challenges for the future.How can we protect our global supply chain from geopolitical shocks and changes in consumer behaviour?Can we build the infrastructure to support the growth of electric vehicles in time?How will autonomous vehicles be regulated,and is there a clear route to adoption?With the need to address this transition,increasing liquidity emerged as the leading strategic objective for the next two years,named by 39%of respondents among their top three.This priority was higher among Tier 2 manufacturers(52%)and in Asia Pacific(47%).This aligns closely with a study undertaken by PWC,highlighting the need to improve liquidity in the short term.2Companies are seeing the need to have the capital available to invest in new technologies and react to meet unexpected challenges as they arise.This is against a backdrop of pressurised margins and distress throughout the supply chain,driven by high-interest rates,inflationary pressures and volatile commodity pricing.Fisker announced in December that it would scale back production to prioritise liquidity and enable business flexibility.3 Companies are prioritizing ESG requirementsA key takeaway from the survey is the need to adapt business models to address the ESG requirements of investors identified by 35%of companies in their top three strategic objectives.Access to financing is closely correlated to a companys ability to demonstrate ESG credentials.According to PWC,ESG-related assets under management are projected to grow to US$33.9 trillion by 2026,constituting 21.5%of global assets under management.4In the energy intensive manufacturing sector,compliance may prove more demanding for mature companies than new entrants,who can build ESG into decision making,such as choosing to locate new manufacturing sites based on access to reliable sources of renewable energy.Culture and supply chain issues are obstaclesInternal culture emerged as the greatest single obstacle to achieving strategic objectives,with 45%naming it among their top three,rising to 54%among Tier 1 component manufacturers.This may reflect concerns over labor shortages,or the need to upskill the existing workforce to adopt new technologies and motivate them to meet transformation challenges.Supply chain issues remained a key theme amongst respondents,named by 38%of all respondents and 42%of Tier 1 manufacturers among their top three obstacles.Companies are still recovering from the fallout from the global semiconductor shortage,which severely limited new vehicle production,and was estimated to have cost the sector$210 billion in lost revenue in 2021 alone.5 2 https:/ https:/ https:/ https:/ Automotive Risk Outlook 2024 /7Looking to the future,questions remain over the sectors capacity to meet long-term demand.Shipments of automotive semiconductor units increased from 2020-2021.However,supply was still not able to meet the growing demand for infotainment and advanced driver assistance systems(ADAS),which are driving rapid increases in the number of semiconductors per vehicle.This pressure will only increase with the transition from internal combustion engines to electric vehicles.5 https:/ https:/ are your organisations top five strategic objectives for the next 2 years?Rank 1/2/30%0PP00 %Increasing liquidityGrowth:organicInnovationIncreasing dividendsGrowth:acquisitionImproving marginsCapital expenditureReducing costsAddress ESG regulatory and investment community requirementsStabilising the business39(45)522293%0196)622R#07()$DA%Figure 1:Top strategic objectives for the next two yearsTotal(500)Tier 1 automotive component manufacturer(157)Original equipment manufacturer(154)Tier 2 automotive component manufacturer(126)Tier 3 automotive component manufacturer(63)The value of semiconductors installed in vehicles averaged US$500 per car in 2020,but is forecast to reach US$1,400 per car by 2028.6 8/Global Automotive Risk Outlook 2024 60%Q:What are the top three obstacles to your organisation in achieving its strategic objectives?Rank 1/2/30%0PP00 %Internal culture not aligned with objectivesIncreased regulationDifficulties in attracting and retaining talentRising costsCapacity constraintsLack of time for strategic focusSupply chain issuesLack of access to capital45445&88AA2BBB%#%6666T%)E8F27H)33%Figure 2:Top obstacles to achieving strategic objectivesTotal(500)Tier 1 automotive component manufacturer(157)Original equipment manufacturer(154)Tier 2 automotive component manufacturer(126)Tier 3 automotive component manufacturer(63)Manufacturing problemsCompanies are finding the capital they need Although increasing liquidity placed at the top of the sectors strategic objectives,respondents did not see access to capital as a major hurdle it was named by 26%in their top three obstacles to achieving strategy and only 17%in their top two.In fact,investment in the automotive industry,including private sector and government support,has increased dramatically.For example,the UK automotive industry has attracted more investment in 2023 than in all the years back to 2016 combined.7Political instability causes growing concernUnsurprisingly,when asked about the greatest risks facing the sector over the next five years,81%said they were either somewhat concerned or very concerned about geopolitical risk.It was also a leading source of losses over the last two years,named by 41%among their top five responses.The ongoing conflict in Ukraine is projected to reduce global vehicle production by 400,000 units8.Key components such as wiring harnesses are manufactured in Ukraine and Russia is a major source of palladium and neon gas.These remain vital for manufacturing of catalytic converters and semiconductors respectively.The Israel-Gaza conflict continues to disrupt international trade,notably traffic through the Red Sea,one of the worlds busiest shipping routes.7 https:/www.smmt.co.uk/2023/11/uk-auto-manufacturing-charges-up-with-20bn-investment-boost-in-2023/8 https:/ Global Automotive Risk Outlook 2024 /9Tensions between China and Taiwan threaten the already strained semiconductor supply chain,especially given Taiwan Semiconductor Manufacturing Companys near monopolistic position in production of advanced semiconductors.9 Further deterioration of international relations could lead to the deglobalisation of the supply chain,with the imposition of trade barriers,subsidies and restrictions on technologies impacting suppliers,manufacturers and consumers alike.Most companies have a positive outlookHowever,even with all these challenges,the industry still views transformation as an opportunity rather than a downside and most businesses have a broadly positive outlook.More than three-quarters of our respondents(78%)said they were either somewhat optimistic or very optimistic about their organizations prospects over the next two years.9 https:/globaltaiwan.org/2023/12/despite-chinese-market-controls-taiwans-semiconductor-supply-chain-remains-secure/Q:How concerned are you about the following risks to the automotive sector over the next five years?Top 2 box:Very concerned Somewhat concerned 0%0PPpp00 %Geopolitical riskTechnological InnovationChanging patterns of transport useSupply chain disruptionGovernment and regulatory risksESG risk81dddfiyyyyxrrccfhggpaaVqtss%Figure 3:Concern about risks to automotive sector over the next five yearsTotal(500)EMEA(150)North America(150)APAC(150)LATAM(50)Q:How optimistic are you about your organisations future over the next two years?Single code questionFigure 4:Optimism about the next two yearsVery pessimisticSomewhat pessimisticNeither optimistic or pessimisticSomewhat optimisticVery optimisticTotal(500)EMEA(150)North America(150)APAC(150)LATAM(50)0%7%0%4%0%6%0%5%0(1%WSRFU%Optimistic(Net):78%North America:83%LATAM:68%EMEA:77%APAC:77/Global Automotive Risk Outlook 2024 Automation,software and digitalizationDividing lines are unclear as product complexity increasesVehicles are increasingly controlled by sophisticated software and systems,focused on improving driver safety and experience.This trend is only going to increase as electrification and automation reach their full potential.With every new convenience comes new potential for failure.Of the OEMs we surveyed,36%produced their software in house,with a majority somewhat reliant on third parties.Very rarely is all software provided by third parties.For Tier 3 component manufacturers,the roles were reversed they were heavily reliant on third party software for their products(57%).Not reliant at all all produced in-house(111)Very reliant all produced by third-parties(83)0 0P%Original equipment manufacturerTier 1 automotive component manufacturerTier 2 automotive component manufacturerTier 3 automotive component manufacturer36%6W%Figure 5:Reliance on third party softwareQ:How reliant are you on third-party suppliers for software that is incorporated into your products?Rank 1/2/3 Global Automotive Risk Outlook 2024 /11Software compatibility risks are increasingWhen we asked about software and autonomous driving risks,61%said compatibility risks are increasing.That was significantly higher than malfunctions(52%),and design and manufacturing defects(47%).More than a third(34%)thought design and manufacturing defects were decreasing.These findings reveal a worry that defects could emerge,not necessarily from the incorrect design or production of technology,but from the failure of the different systems to communicate,blurring the gap between a genuine defect and incompatibility of products.Cyber-crime is an increasing threatCyber-crime was the risk most respondents thought was increasing(75%in total,82%in Latin America).Nearly every car for sale today has a telematics unit and other components that provide a connection to the outside world.Connected car components make it possible to remotely attack a vehicles functionality,while the storage of car-related data poses has significant implications for consumer privacy.While there was a consistent response on the increase in cyber risk,actual cyber losses in the last two years were higher among larger companies including OEMs,Tier 1 manufacturers and large multi-national companies(revenue over$501 million).Ransomware attacks have cost the manufacturing sector$46b10 in down time since 2018.With increased digitization and the manufacturing industrys low tolerance for downtime,the risks surrounding both malicious events and unforeseen operational errors need to be considered within business planning.Concerns with digitization exist both within a companys own infrastructure and also with any operations that are outsourced or where a company relies on a supply chain for components.This is also being reflected in developing legislation,such as the EUs Cyber Resilience Act and the UK Product Security and Telecommunications Act.11 It is important for risk managers to be confident that they can make informed decisions around the acceptance,transfer,or avoidance of risk especially in such a dynamic,changeable operating environment.This should include limits as well as available cover and how it is accommodated within traditional lines of insurance and the cyber insurance market.Matthew Ellis,Head of Cyber and TMT RetailWTW insightDigitization and legislation are adding to automotive cyber risks10 https:/ https:/www.burges- https:/ https:/ 2010,some vehicles had about 10 million single lines of code;by 2016,this had expanded by a factor of 15,to around 150 million lines.1212/Global Automotive Risk Outlook 2024 Q:To what extent are the following risks increasing or decreasing in relation to software and autonomous driving?Top 2 Box:Significantly increasing Slightly Increasing 0%0PPpp00 %Cyber crimeCommunication errorsDesign and manufacturing defectsMalfunction leading to accidentsCompatibility issuesTelematics issues75uydWWWaXFXIIREEDppGGCUYYUQQ%Figure 6:Increasing risks in relation to software and autonomous drivingTotal(500)EMEA(150)North America(150)APAC(150)LATAM(50)Digitalization will make defects easier to detectWhile concern about the risks emerging from new technologies was high,there is also optimism that digitisation will help to solve some of the problems it creates.More than 8 in 10 manufacturers(82%)agree or strongly agree that ongoing digital transformation in components will enhance their ability to identify defects.Among OEM respondents,this number rises to 87%.BMW have recently launched Proactive Care,which provides real time analysis of the vehicle,notifying the driver and BMW of any servicing,maintenance or repair requirements.13 This can prevent longstanding defects developing undetected,and drastically enhances an OEMs response capabilities without the need for costly physical inspections.13 https:/www.bmw.co.uk/en/topics/owners/service-workshop/servicing/proactive-care.html Global Automotive Risk Outlook 2024 /13Q:To what extent do you agree or disagree with the statement?Single code question0%0%3%4%0%1%0%2%0!Wffes%Figure 7:Attitude statement:Digitalization and product defectsThe ongoing digital transformation of automotive components will allow manufacturers to identify product defects more effectively.Total(500)Agree:82%OEM:87%Tier 1:82%Tier 2:85%Tier 3:67%Strongly disagreeDisagreeNeither agree or disagreeAgreeStrongly agreeTier 1 automotive component manufacturerTier 3 automotive component manufacturerOriginal equipment manufacturerTier 2 automotive component manufacturerWhen it comes to managing a product recall,there is a strong correlation between the time taken to identify a defect and the costs associated with responding.As products make their way through the supply chain and enter global distribution,the testing,labour,transport,and communication costs will increase exponentially.End-of-line testing prevents defective products from leaving the production floor and ensures companies can isolate the issue successfully,minimising reputational risk from highly-publicized recalls.This also reduces the possibility of costly regulatory action should product safety be a concern.This survey explores a variety of factors that are increasing exposure to product recalls.However,the responses also show the benefits companies can leverage using innovative technologies to identify and remediate defects.Meanwhile,over-the-air updates are constantly reducing the costs of recalls that would previously have required a manual fix.When engaging with insurers,the ability to demonstrate improvements within the manufacturing and testing process is vital to securing competitive terms and conditions.Access to product recall insurance enables the industry to continue to innovate without assuming unacceptable levels of risk.Jack Ledger,Director,Product Recall,WTW WTW insightIdentifying defects early will be critical to reduce recall risks14/Global Automotive Risk Outlook 2024 Electrification and alternative energyAlternative fuels,thinking and technologies are needed to reach climate goals The transport sector is one of the largest emitters of greenhouse gasses,with huge potential to help cut global emissions on the road to Net Zero.Most of that reduction is expected to come from alternative fuels.Battery electric vehicles(BEVs)and plug-in hybrid electric vehicles(PHEVs)currently dominate the market for non-combustion vehicles,yet many manufacturers in our survey think that other fuels,besides electricity,will play an increasing role.Almost three-quarters(72%)said that hydrogen cell technology will become a viable alternative to EVs in the next 10 years,rising to 77%in EMEA.This view had broad consensus across respondents working across all power systems.14 https:/www.acea.auto/figure/fuel-types-of-new-passenger-cars-in-eu/Q:To what extent do you agree or disagree with the following statements?Top 2 Box:Strongly agree Slightly agree Single code per row question0Pp0 %The automotive industry is over-reliant on government subsidies for development and production of electric vehicles and alternative energy systemsHydrogen cell technology will emerge as a viable alternative to electric vehicles within the next 10 yearsElectrification and the transition to alternative energy systems brings new,and more complex,product risks to automotive manufacturers73suvvtRQSrrrFW%Figure 8:Views on alternative energy systemsRespondents split based on the fuel type they manufacture productsTotalInternal combustion engine(ICE)HydrogenElectricalNot specific to fuel type other21.6%of all new cars sold in the EU in 2022 had a plug14 Global Automotive Risk Outlook 2024 /15Overcoming consumer perceptions on safetyWhen we asked what were the main barriers to adoption of electric vehicles and alternative fuels,safety topped the list,with 50%naming it among their top three.This was followed by technology(45%)and availability of alternative fuel(39%).Highly publicised recalls and battery fires caused by thermal runaway have materially influenced consumer perception when it comes to safety.However,alarming headlines about the fire risks associated with electric vehicles may not be justified.There is a growing response that these perceptions do not reflect the data,with the Association of British Insurers providing evidence that the fire risk of EVs does not exceed that of traditional ICE vehicles.15 This has been corroborated by publications from the UKs Energy and Climate Intelligence Unit thinktank,which suggest fires from combustion engines simply arent reported.15 https:/publications.parliament.uk/pa/ld5804/ldselect/ldenvcl/51/51.pdf60%Q:What are the top four barriers to the adoption of electric cars and alternative fuels?Rank 1/2/30%0PP00 %SafetyUnwillingness to changePerception of buyersCost of new fuelsTechnologyInfrastructureAvailability of alternative fuelManufacturing costs505 911999UE$000H76#$463334IGGG(!V54A%Figure 9:Barriers to the adoption of electric cars and alternative fuelsRespondents split based on the fuel type they manufacture productsTotalInternal combustion engine(ICE)Hydrogen ElectricalNot specific to fuel type other Cost16/Global Automotive Risk Outlook 2024 We found it surprising that only 18%of respondents cited infrastructure among their top barriers.In a recent survey of consumers in the U.S.,insufficient public charging stations was a top barrier to adoption.16 The more relaxed view among manufacturers could be driven by greater confidence in the potential of alternative charging solutions,such as domestic chargers,and projected improvements in performance.However,taken together,the barriers to adoption are considerable,and extensive investment will be needed to make alternative fuel types the preference of most drivers.Funding the transition:insight into government subsidies Vehicle manufacturers and battery makers plan to invest$860 billion globally by 2030 to support the transition away from fossil fuels.17 But,given the scale of transformation needed,this will not be nearly enough so who is going to fund it?A key finding of the survey was the broad consensus(73%)that the industry is over-reliant on government subsidies for the development and production of electric vehicles.We have seen landmark deals,such as the CHIPS and Science Act in the U.S.providing a$52 billion boost to American semiconductor research,development,and production with extensive automotive applications.18 Other governments have taken advantage of the burgeoning auto industry by offering generous benefits to encourage foreign investment.Hungary has positioned itself as a gateway into the European markets,having received over EUR14bn of investment into its battery sector alone,with 29 of 31 cash subsidies given to companies from Germany,China and South Korea,according to government data.19This dependence can leave the sector vulnerable if subsidies are changed or withdrawn,as was the case when the UK Government refused to bring forward previously promised grant funding for Britishvolt,which had plans to build a 3.8bn gigafactory in the north-east of England.20 16 https:/ https:/ https:/www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china/#:text=The CHIPS and Science Act will: Bolster U.S.,America19 https:/ https:/www.bbc.co.uk/news/business-63457813“Thermal runaway fires in electric vehicles are extremely rare but very widely reported.The emotive response to a single event can be huge.It can lead to a general perception that all EVs are unsafe at a time when people are still unsure about the technology and,as our survey suggests,as yet unwilling to change.This is just one of the challenges that electrification needs to overcome.Others include the roll-out of charging infrastructure and the battery technology needed to charge larger commercial vehicles and trucks viably the best available batteries today can take up to a third of the space inside an average trailer.Given these challenges,its not surprising to find that most automotive companies agree hydrogen will be an alternative to EVs as we move towards Net Zero,especially for heavy vehicles and public transport applications,where infrastructure requirements are less extensive.We expect that governments will continue to recognise the importance of alternative fuels and start backing them more heavily with funding and policy support.Subsidies are a critical factor in determining where private investment goes and what countries are chosen for new facilities and manufacturing operations.Subsidy regimes should be stable and predictable to reduce risks.Where subsidies are changed or withdrawn,it can lead to a significant reduction in EV sales and second-hand values,with consequent financial risks.”Anthony Monaghan,GB Industry Transportation Leader,WTWWTW insightGovernments should back alternative fuels and stabilize subsidy regimes Global Automotive Risk Outlook 2024 /17Supply chainSupply chains vulnerable to shortages,economic uncertainty and trade risksFollowing disruption in recent years,manufacturers have been forced to re-think supply chain management and question common practices.Just in time to start stockpiling componentsMore than three-quarters(77%)strongly or slightly agreed that just-in-time supply chain strategies are no longer fit for purpose.Many automotive businesses have responded to recent supply chain disruption and rising political instability by stockpiling critical components.This can provide manufacturers with more resilience to supply shocks,but it can also add cost and complication when it comes to insurance.Holding more stock means higher valuations for property insurance,leading to higher premiums and accumulations of risk.Likewise,stocks held in-house may not be covered under product liability or recall insurance,which often doesnt extend to goods that are still in a companys own care,custody and control.Nearshoring opportunity or risk?As a response to pandemic and geopolitical shocks,many automotive companies are nearshoring manufacturing to reduce volatility in the supply chain.This offers greater certainty of delivery,deeper commercial ties,and the ability to audit and monitor suppliers more easily,without sharp rises in labour costs.For US companies,Mexico now offers an attractive alternative to China,avoiding rising tariffs imposed on Chinese exports,and taking advantage of geographical proximity,transport links and strategic tax exemptions.After 20 years of Chinese dominance,Mexico is now the largest exporter of goods to the US,worth a total of$475.6 billion in 2023.21However,this does not come without its challenges.Interest in Mexican opportunities is growing“in spite of local government policies,rather than because of them”,according to Ryan Berg,Director of the Americas Program at the Center for Strategic and International Studies.22 Mexico ranked 126 out of 180 countries in the 2023 Corruption Perception Index23,and companies need to understand the structural,operational and regulatory risks they face to enter such territories.Sophisticated supplier approval processes are essential to maintain quality and resilience during this on-boarding process.21 https:/ https:/ Corruption Perceptions Index 2023 https:/www.transparency.org/en/cpi/202318/Global Automotive Risk Outlook 2024 Q:To what extent do you agree or disagree with the following statement:Just-in-time supply chain strategies are too susceptible to disruption and no longer fit for purpose.Single code question3%4%4%4%0%7%7%0%2%0%0 gges%Figure 10:Attitude statement:Just-in-time supply chainsJust-in-time supply chain strategies are too susceptible to disruption and no longer fit for purpose.Agree:77%North America:73%LATAM:74%EMEA:77%APAC:80%Strongly disagreeDisagreeNeither agree or disagreeSlightly agreeStrongly agreeTotal(500)EMEA(150)North America(150)APAC(150)LATAM(50)Supplier approval processes need improvement The vast majority of the companies in our survey(88%)have some kind of process in place to assess and approve suppliers,but only 1 in 3(30%)described their processes as sophisticated.Not surprisingly,this level of assessment is more common among OEMs at 38%.Similarly,almost all respondents(91%)identify whether suppliers have insurance as part of their approval process in at least some cases.However,relatively few(28%)make this a requirement for all suppliers.These checks are likely to be for core liability coverage,less so for specialty insurance products such as product recall or contingent business interruption.Q:Do you have a process in place to assess and approve suppliers?Single code question0%0ppPP00 %We have sophisticated supplier approval processes in placeWe have some supplier approval processes in placeWe do not have formal supplier approval processes300%0%0%0)X%0Y%0gD%8%6V%Figure 11:Use of process to assess and approve suppliersWe are currently developing our supplier approval processesTotal(500)Tier 1 automotive component manufacturer(157)Tier 2 automotive component manufacturer(126)Tier 3 automotive component manufacturer(63)Original equipment manufacturer(154)Global Automotive Risk Outlook 2024 /19Q:Choose an option to complete the following statement:The impact of government and regulatory action on the cost of managing a product defect is.Single code question4%4%0%4%7!4(Q2211437CC%Figure 12:The impact of government and regulatory action on the cost of managing a product defect is.Increasing:75%North America:74%LATAM:66%EMEA:68%APAC:85%Slightly reducingNot changingSlightly increasingSignificantly increasingTotal(500)EMEA(150)North America(150)APAC(150)LATAM(50)Contractual responsibilities and liabilitiesMore clarity is needed to apportion responsibility and liability for defectsContractual obligations in supply agreements play a central role in determining who is responsible,and ultimately liable,for any damages to rectify defects.Worryingly,only 9%of our respondents strongly agreed that its clear who is liable for faults between software developers,component manufacturers and OEMs when a product fails(as low as 4%in Latin America).A majority(55%)slightly agreed.When you factor warranty provisions into the discussion,the picture can become even more unclear.Three quarters of businesses in our survey(75%)said costs associated with managing a product defect were increasing as a result of government and regulatory action,with 4 in 10(43%)seeing a significant increase.APAC stands out with more than half(51%)in this region highlighting significant cost increases.20/Global Automotive Risk Outlook 2024 OEMs demand greater obligations in contract When safety critical components are defective,it is paramount that manufacturers respond urgently.So who ends up bearing most of these costs?OEMs have the immediate responsibility for implementing recalls or service campaigns,given the direct relationship with the end consumer.In many instances,they incur costs without the confidence that they can be recouped from third parties at fault.Our survey suggests that OEMs are looking for greater certainty in apportioning responsibility,especially at a time when the costs involved are rising.This is being reflected in the obligations they impose on suppliers in contractual negotiations.A large majority(73%)agreed or strongly agreed that they had strengthened their suppliers contractual responsibilities or intended to do so.Conversely,three-quarters(75%)of component manufacturers globally agreed or slightly agreed they are facing greater financial exposure because of the contractual obligations placed on them by OEMs.This sentiment is highest in APAC at 84%,which may reflect the growing relationships between suppliers in APAC and OEMs in the U.S.and Europe,where contracts are traditionally more onerous.Only 72%of OEMs believe their suppliers fully understand their obligations in the event of a defect.This suggests suppliers may be exposed to unforeseen costs they may be unable to absorb.As these obligations continue to strengthen and pose larger financial risks,access to risk management solutions will be vital.Component manufacturers face growing financial exposuresTaken together,the results suggest that OEMs are successfully passing the cost of product defects down the supply chain to tier 1,2 and 3 component manufacturers.They could be burdened with greater risks and liabilities,requiring more protection than they have in place today.Only 21%of these businesses said they had insurance in place for every contract.Just under half(49%)said they sometimes considered insurance and 22%said only if they thought the contract was risky.This shows that a significant portion of the supply chain remains uninsured.Changes in insurance purchasing are often reactive,following events that highlight gaps in coverage or unforeseen exposures.A transition to a more proactive stance would ensure component manufacturers can respond to these trends.Q:To what extent do you agree or disagree with the following statements?Top 2 Box:Strongly agree Agree Single code per row questionOriginal equipment manufacturers only Please note small base sizes.LATAM not shown due to low base.0Pp0 %We are able to manage our financial exposure to product defects effectively through contractual agreements with our suppliersOur suppliers fully understand their contractual liabilities in case of product defectsWeve strengthened,or intend to strengthen,our suppliers contractual liabilities in case of product defects85yyysssrrr%Figure 13:OEMs contractual approach to product defectsTotal(154)EMEA(47)North America(43)APAC(48)Q:To what extent do you agree or disagree with the following statements?Top 2 Box:Strongly agree Slightly agree Single code per row question Component manufacturers only0Pp0 %Contractual obligations required by customers are placing greater financial exposure on automotive manufacturersWe have full visibility of our contractual liabilities in relation to product defects75uph%Figure 14:Component manufacturer views on contractual liabilitiesTotal(500)LATAM(34)North America(107)EMEA(103)APAC(102)Global Automotive Risk Outlook 2024 /21Risk management and insuranceAnswers reveal gaps in risk management and risk transferGiven the range of existing and emerging threats facing the industry,its encouraging to see that most automotive manufacturers have good risk management processes in place.Across a spectrum of risks from business interruption to product recall,reputation to cyber,more than three-quarters had good risk management processes that,at a minimum were timely and consistent in addressing priority issues.However,relatively few are yet at the top end of the risk maturity curve,with processes embedded in strategic planning and early warning systems linked to action by board and management.Only 10%had this level of management for environmental risks,which may be a cause for concern given the current focus on ESG and the requirements of the investment community.Over-reliance on general insurance for emerging risksHowever,there is still a serious disconnect between perceptions of cover and the actual cover provided for some risks.For example,55%said that product recall was covered by a general insurance product,however solutions offered through general liability policies do not respond to a large proportion of recall exposures.In many cases,coverage would be limited to safety critical defects,overlooking the majority of components and functions in a modern vehicle that fall outside of this scope.While first-party costs to recall defective components will likely be covered,extensive third-party costs and costs to manufacture replacement components are often excluded from general insurance products.Similarly,42%said environmental risks were covered by general insurance.Yet this only covers sudden and accidental pollution arising from third party liabilities.General insurance does not cover first-party clean-up costs,biodiversity damage,statutory clean-up costs,loss mitigation costs,gradual pollution or historical pollution,all of which can be insured on a stand-alone environmental impairment liability wording.In the US,it is commonplace for general insurance policies to exclude pollution in its entirety,including sudden and accidental events.Insurers are constantly developing new products and solutions to meet the needs of companies within the automotive industry,whether through brand-new products or bespoke changes to policy language.Automotive companies should consult with their insurance brokers to make sure they are up to date with what is available and that their insurance programs are fit to address ever-changing needs.22/Global Automotive Risk Outlook 2024 Q:Please indicate your organisations approach to risk management for each of the following risks:Single code per row question0%0PP00 %Contingent business interruption(loss of profit/revenue due to property damage at a suppliers location)Total LevelTotal LevelReputationPolitical violence/terrorismProperty damage(PD)EnvironmentalProduct recallProduct liabilityCredit/Political riskDirectors&officersCyberBusiness interruption(BI)Intellectual property91xxr $#GBB!0(01F1&19DE5FF4)%8%8%8%Figure 15:Approach to risk management for key risksWe embed risk management in strategic planning,capital allocation and business processes,with early warning systems linked to corrective action from board and managementOur risk management processes work in a timely and consistent way.We take action to address high priority issuesWe co-ordinate risk management at an enterprise level using tools and processes to identify,monitor,measure and reportWe have risk management processes but they are not managed consistently throughout the organisation Global Automotive Risk Outlook 2024 /23Q:Please indicate your organisations approach to insurance for each of the following risks:Single code per row question0%0PP00 %Property damage(PD)Total LevelTotal LevelCredit/Political riskIntellectual propertyReputationProduct recallPolitical violence/terrorismEvironmentalContingent business interruption(loss of profit/revenue due to property damage at a suppliers location)CyberBusiness interruption(BI)Product liabilityDirectors&officers84ffwdscrahE#$%3%3%4%3%3#TBB700200 %1(CED$#3UG6%9B%2%2%2%4%28%Figure 16:Approach to insurance for key risksCovered by standalone insurance productNo specific insurance.Not sure if covered by general insurance productRisk covered by general insurance productRisk NOT covered by insuranceInsurance needs to work harder More than 8 in 10(84%)said insurance was effective in helping them manage their key risks.However,only 22%said it was very effective.This may reflect the experience of manufacturers during the pandemic disruption when many losses were not covered by insurance as they related to delay rather than damage.As a result,companies are giving increasing priority to managing contingent business interruption,which came top of our risk maturity table.More than a third of companies(36%)said they only review insurance needs on an annual basis,or at renewal.This may not be frequent enough to keep up to date with new and emerging risks,and the insurance that is available to cover them,or other market changes.More regular reviews might help to identify and rectify gaps between perception and actual insurance cover.24/Global Automotive Risk Outlook 2024 Q:How effective is insurance in helping you to manage your key risks?Single code question0%4%4%5%0%7 %0%2%0%0#bTdbg%6%Figure 17:Effectiveness of insurance in helping manage key risksEffective:84%North America:87%LATAM:74%EMEA:81%APAC:87%Very ineffectiveSomewhat inneffectiveNeither effective or ineffectiveSomewhat effectiveVery effectiveTotal(500)EMEA(150)North America(150)APAC(150)LATAM(50)Automotive manufacturers need to continuously review their insurance arrangements to assess what cover they need for both existing and emerging risks in the context of corporate strategy and appetite for risk.While insurance will generally provide broad coverage,it may not provide cover for all scenarios this is a good reason for organisations to test loss scenarios against insurance policy coverage.The survey has highlighted a number of considerations for insurance programmes:manufacturers need to assess their specific exposures to risks such as environmental,cyber,intellectual property and reputation,and make sure the cover they think they have is what the terms actually provide.A switch from just-in-time to just-in-case stock holdings can impact property valuations and business interruption exposures.It is important to understand any changes to the risk profile as a result of holding more stock,make necessary declarations to insurers,and consider how this affects your risk management procedures.Insurers are also keen to see that robust contractual risk management procedures are in place and clarify liability for defects and subsequent losses that could arise.To address these issues,manufacturers should carry out regular insurance reviews so that they have confidence their insurance programme will respond to a loss in the way they anticipate at the time they need it.Matt Gazeley,Manufacturing&Industrial Practice Leader,GB RetailWTW insightMake sure your insurance provides the cover you expect Global Automotive Risk Outlook 2024 /25ConclusionThe pace of change in the automotive sector has increased exponentially.Manufacturers differentiate their products less by whats under the bonnet and more by driver experience.Performance is becoming less important than functionality,whether in safety,connectivity or entertainment.These changes,along with the challenges of electrification and automation,have created a new risk landscape for manufacturers.Issues of software compatibility and integration have come to the fore,alongside traditional risks of design error and physical defects.Our survey suggests that automotive businesses are becoming reliant on third party software and are less certain who is responsible between OEMs and suppliers if a software-related defect occurs.Firms are trying to build resilience to these issues through stronger contractual obligations,while also stockpiling components and nearshoring production to hedge against future supply chain shocks.But despite the range of existing and emerging risks,take up of specialist insurance to address them remains relatively low.Collaboration between the insurance market and the automotive sector is vital to ensure insurance stays ahead of the curve,providing solutions to manufacturers before these risks arise,as opposed to after the fact.WTW has an experienced team of industry experts who can help automotive manufacturers understand and navigate their current risk landscape and anticipate how it will change during this period of continuing transformation.Survey sample and methodologyMethodology Phone to web surveySample size 500 Total:North America(150)LATAM(50)EMEA(150)APAC(150)Audience profileWorking for either an original equipment manufacturer(OEM)or a component manufacturer(Tier 1,2,or 3)with a reported annual revenue of at least$100 million Fieldwork dates Autumn 2023Our survey was carried out by our research partner,Coleman Parkes,in September 2023 using phone-to-web methodology.We received 500 responses from senior executives responsible for risk strategy across their organization.Respondents were based in more than 20 countries across Europe,North and South America,Asia Pacific and the Middle East.Study detailAPACEMEALATAMNorth America300%Region30%Type of manufacturer311%00 %Original equipment manufacturerTier 1 automotive component manufacturerTier 2 automotive component manufacturerTier 3 automotive component manufacturerComponent manufacturers(Net):69%Revenue12#!%00 %$100 million to$250 million$251 million to$500 million$501 million to$1 billion$1.1 billion to$5 billion$5.1 billion to$10 billion$10 billion Lead decision makerKey influencerPart of the decision-making team32$%Job responsibility44&/Global automotive industry survey Fuel type manufacture for62%1%Note:Many companies manufacture for more than one fuel type Internal combustion engine(ICE)ElectricalHydrogenOtherNot specific fuel type Global Automotive Risk Outlook 2024 /27For more information,please contact:AsiaBen MacCarthy Head of Casualty Asia 852 2195 5885 AustralasiaTrent Williams Head of Broking,Australasia 61 423 598 493 Robert Lasovski Corporate Risk(P&C)Leader,Australasia 61(0)478 307 114 CEEMEAThomas Haddrill Head of Broking,CEEMEA 44 20 3124 8039 EuropeKiran Nayee Head of Casualty for Europe 44(0)7770971345 Victor De Jager Head of Property for Europe 31(0)6 2111 6250 North AmericaChristian Ryan Managing Director North American Industry Leader Kevin Velan Director,National Product Recall Team 1 312 288 7140 South AmericaRoman Mesuraca Regional Head of P&C and Broking LatAm 54 11 4945-3614 UKJack Ledger Director Broking 44(0)7825 967 186 Matt Gazeley Manufacturing&Industry Practice Leader,GB 44(0)203 124 6371 Anthony Monaghan Transportation Industry Leader,GB 44(0)7442 976 286 About WTWAt WTW(NASDAQ:WTW),we provide data-driven,insight-led solutions in the areas of people,risk and capital.Leveraging the global view and local expertise of our colleagues serving 140 countries and markets,we help you sharpen your strategy,enhance organisational resilience,motivate your workforce and maximise performance.Working shoulder to shoulder with you,we uncover opportunities for sustainable success and provide perspective that moves you.Learn more at 2024 WTW.All rights reserved.FPS6326649 WTW_139255_03/DisclaimerWTW offers insurance-related services through its appropriately licensed and authorised companies in each country in which WTW operates.For further authorisation and regulatory details about our WTW legal entities,operating in your country,please refer to our WTW website https:/ is a regulatory requirement for us to consider our local licensing requirements.The information given in this publication is believed to be accurate as at 1 November 2023.This information may have subsequently changed or have been superseded and should not be relied upon to be accurate or suitable after this date.This publication offers a general overview of its subject matter.It does not necessarily address every aspect of its subject or every product available in the market and we disclaimer all liability to the fullest extent permitted by law.It is not intended to be,and should not be,used to replace specific advice relating to individual situations and we do not offer,and this should not be seen as,legal,accounting or tax advice.If you intend to take any action or make any decision on the basis of the content of this publication you should first seek specific advice from an appropriate professional.Some of the information in this publication may be compiled from third party sources we consider to be reliable,however we do not guarantee and are not responsible for the accuracy of such.The views expressed are not necessarily those of WTW.Copyright WTW 2024.All rights reserved.
2024-10-25
28页
5星级
Planning for Transit-Oriented Development in Emerging CitiesMobility and Transport Connectivity Seri.
2024-10-25
169页
5星级
User Needs and Requirements#EUSpaceReport on Public Transport 2023 Page 1 TABLE OF CONTENTS 1 INTROD.
2024-10-24
45页
5星级
THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSINTRODUCTIONThe fleet management market has undergone a rapid digital transformation.The industry has evolved from simple location-based tracking to an ecosystem of advanced IoT applications that require cutting-edge cloud and communication technology.Advanced use cases,including video monitoring for driver safety,are quickly becoming standard in the industry,paving the way for the highly-anticipated future applications of commercial vehicle electrification and autonomous driving.These future use cases will drive even greater demand for advanced Internet of Things(IoT)devices,data management platforms,and,perhaps most importantly,an unprecedented level of localized global connectivity.As fleet managers prepare for this future,many find that their internal infrastructure and connectivity services are underperforming.Many fleet operations still depend on manual processes,and many fleet management use cases continue to rely on Low Power Wide Area(LPWA)networks,even as video-based applications and other future fleet management use cases demand the throughput of 4G and eventually 5G networks.Given these developments,fleet managers in the future will require a completely different type of network and connectivity service provider,one that can offer a range of highly available networks and a connectivity management platform designed for advanced IoT applications.Local connectivity on a global scale is going to be a boon for the demands of low latency,battery-optimized connectivity that meets the increasing regulatory requirements of data sovereignty,privacy,and roaming restrictions.Choosing a connectivity service provider equipped for the future will be integral to enterprises as the fleet management market prepares for another wave of innovation and use case expansion.CONTENTSINTRODUCTION.1USE CASE EXPANSION.2Traditional Use Cases.2Emerging Use Cases.2IoT APPLICATIONS,DEVICES,AND TECHNOLOGIES.3Sensor-Based Monitoring.4Video Monitoring .4Shared Mobility.5Implementation Struggles for Advanced Fleet Management Use Cases.6FUTURE FLEET APPLICATIONS .7Electrification Considerations.7Autonomous Driving.7V2X Communication.7CONNECTIVITY IS KING IN THE FUTURE OF FLEET MANAGEMENT.8Network Types&Requirements.8Importance of Coverage and eSIM.9CONNECTIVITY AND PLATFORM PROVIDERS .9Purchasing Connectivity and Platform Separately.9Purchasing Connectivity and a Platform from an MNO.10Purchasing Connectivity and a Platform from an MVNO.10Next-Generation Connectivity and Platforming.11CASE STUDY:A COMPETITIVE EDGE IN AUTOMOTIVE IOT WITH FLOLIVE.12SUMMARY.12Elizabeth Stokes,Senior AnalystTHE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSTHE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSUSE CASE EXPANSIONThe telematics space is at a unique convergence of tried-and-true use cases that will remain pivotal within the industry.In contrast,newer use cases arise,creating the opportunity to develop technologies and more accessible hardware and connectivity costs.Traditional Use CasesThese familiar use cases will continue to have a stronghold in the industry,supporting a range of benefits from efficiency,cost-saving,and regulatory compliance adherence:Track and Trace:Track and trace is a baseline use case for fleet management and a building block for the most advanced fleet application technologies today.At its most basic,Track and trace refers to using Global Positioning System(GPS)technology to track vehicles and assets in transit.Track and trace is a legacy use case,first made possible by the commercial introduction of GPS in 1993.By the early 2000s and with the removal of Selective Availability(SA),major companies began to rely on GPS and Fleet Management Systems(FMSs)to receive remote updates from their fleets on the road,ushering in a new age of enterprise telematics.Improvements in cloud services,Machine-to-Machine(M2M)communications,and edge compute have greatly improved track and trace technology since its early adoption at the turn of the century.Fleet managers now have unprecedented,granular visibility into a vehicles performance,allowing for insight into individual components of the car and a holistic understanding of the vehicle,its route,and the driver at its helm.Regulatory Compliance:Enterprises must navigate various state and federal regulations that require fleet managers to log vehicle maintenance,driver hours of service and behavior,load weight,and more.Failure to comply with these reporting standards can lead to heavy fines or harsh penalties.Fleet management technology can offload these data collection and analysis activities to sensors and fleet management platforms.Many fleet managers rely on LPWA networks like LTE-M to send sensor-based compliance data to FMSs that can package it into ready-made reports.This process eliminates the manual reporting tasks these regulations previously required.Asset Tracking and Protection:Like those used to prevent vehicle theft,GPS sensors on assets can track fleet cargo movements in real time,assuring asset managers that goods are moving on their designated routes.Additionally,Condition-Based Monitoring(CBM)sensors can track a trailers condition to protect environmentally-sensitive assets,typically using LPWA networks to relay important data points like moisture levels and trailer temperatures back to fleet managers.Emerging Use CasesThese communication and technology advancements have created a range of cutting-edge fleet management use cases that build on the foundational principles of track and trace.Vehicle Theft Prevention:Vehicle theft is an ever-present threat to enterprises and is increasingly likely as incidents of carjacking climb.The National Insurance Crime Bureau(NICB)in the United States recently reported that over 1 million cars were stolen nationwide in 2023,stating that vehicle THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSthefts have steadily grown since 2019.GPS-based sensors and FMSs that track vehicles and cargo at all times on a virtualized map are critical tools to protect company assets.GPS tracking also enables enterprises to employ geofencing,which sets virtual boundaries for a vehicle.Geofencing technology can help fleet teams stay vigilant against suspicious movements by sending real-time alerts to the proper teams if a vehicle exits the virtualized perimeter.Driver Safety:The Federal Motor Carrier Safety Administrations(FMCSA)most recent Large Truck and Bus Crash Facts report reveals how truck driver behavior impacts the safety of those on the road.According to the 2021 report,at least one driver-related factor,like speeding and distracted driving,“was recorded for 32%of the large truck drivers in fatal crashes.”Driver safety is a critical fleet management use case,requiring various technologies to monitor both a drivers physical state and their behavior on the road.FMS solutions often feature driver scorecards based on telematics data from sensors that monitor their average speed,lane changes,and braking.The scorecard can help coach drivers and ensure they are not driving aggressively and putting themselves or others at risk.Telematics data can also help alleviate fatigue,a common risk factor for professional drivers.Fleet management solutions often collect relevant data to determine the most efficient routes of travel,playing a crucial role in ensuring drivers are not on routes that are too long or accident-prone.Video Surveillance:In both driver safety and vehicle theft prevention,use cases offer a significant opportunity to integrate video capabilities.More robust connectivity through cellular as primary or failover creates a chance to mobilize video surveillance and lower hardware costs,making implementation much more possible.In both these use cases,video monitoring capabilities can capture surroundings to provide detailed insights.In driver safety,unsafe behavior can be flagged.In theft monitoring,real-time and historical data can help track down culprits and help recover equipment.Business Process Integration:Fleet business operations have historically been forced to rely on inefficient manual processes.Yard management,for example,has been plagued by manual gatekeeping and documentation,leading to costly congestion and transport delays.According to ABI Research,80%of transportation delays occur because of yard inefficiencies,with experts predicting that the situation could worsen as global supply chains and distribution networks become more complex.Fleet telematics are critical in streamlining yard management and other operational processes.GPS technology,sensors,and LPWA and 4G communication enable vehicles to transmit vital data from the road to the yard,such as alerting yard managers to potential delays or cargo movements within the yard.These insights can prevent stockouts and improve the efficiency of the yard and the supply chain.IoT APPLICATIONS,DEVICES,AND TECHNOLOGIESSensor technology and wireless communication advancements have transformed commercial vehicles into epicenters of IoT innovation.A single truck can now incorporate an entire ecosystem of devices and sensors,giving fleet managers access to the workings of individual vehicle components like engines,tires,and trailers.The section below explores how IoT devices have improved remote monitoring use cases and led to new,advanced fleet management applications incorporating video.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSSensor-Based MonitoringMany fleet management use cases require sensors to collect and send crucial performance and condition-based data to FMSs.The sensorsoften placed on fallible components like tiresusually use Bluetooth to send these data to the vehicles Telematics Control Unit(TCU),the On-Board Diagnostics(OBD)system,or a gateway.The TCU,the OBD,and the gateway will likely use an LPWA or 4G cellular network to ferry the sensor data to a cloud-based application.Most engine diagnostic and GPS location data go through the TCU,which is built into the vehicle by the Original Equipment Manufacturer(OEM).Other data that need to be aggregated,like data from the tires,fuel lodge,or camera system,will likely go through either a gateway,the TCU,or both.Tires:Monitoring tire health is a crucial task for fleet managers.Using sensor data sent through a cellular connection,an FMS can alert relevant maintenance teams if a tire requires maintenance,allowing fleet managers to plan for potential downtime before an unexpected event like a flat tire or blowout occurs.Such unexpected incidents usually result in expensive in-field maintenance that can keep a vehicle out of commission for a while.According to one 2016 survey,the average fleet experiences around 97 flat tires per year,each costing around US$338.42 for downtime and replacement.This would mean that fleets spend approximately US$32,800 on flat tires annually.As a result,companies are increasingly investing in sensor-based solutions that can predict tire incidents before they happen.Geotab estimates that businesses can save 10%to 20%on maintenance costs with data-driven,predictive maintenance solutions.These solutions often work best when backed by a strong connectivity partner that can facilitate real-time diagnostic data transfers from the road.Engines:Sensor-based solutions and telematics data can digitalize engine monitoring,saving engineers time from the manual processes of the past.For example,an hour meter is a sensor that counts the hours an engine has been running.The sensor signals to fleet managers when maintenance is required based on the hours it records.Collecting the hour information from the meters was historically a clunky process.Staff had to log the hours from the sensor manually and only had access to the meter when the vehicle was stopped.Modern fleet management solutions and improved LPWA coverage have simplified this process,with hour meters now sending automatic hour logs to maintenance software as the vehicle runs.Fuel:Remote fuel management gives fleet managers access to information once reserved for drivers.In the past,business owners did not have much visibility into vehicle fuel levels or the fueling process.Now,fuel sensors can send relevant data to remote teams,giving fleet managers insight into fuel levels and sending alerts if low fuel or abnormal fuel usage is detected.Telematics solutions predominately used for driver safety can also monitor for driving behaviors that waste fuel,such as speeding.Some studies have shown that fleet managers can save up to 20%on fuel and maintenance costs by investing in connected fleet management solutions.Cost savings in this area have become even more important as fuel prices rise.According to a recent American Transportation Research Institute(ATRI)report,average fuel costs per mile for fleets rose almost 54%from 2021 to 2022,the largest increase of all fleet cost centers.Video Monitoring Video telematics represents a leap forward in fleet management technology.New gateway technology and better cellular coverage enable vehicles to send video footage from the field to remote teams,giving rise to a new category of telematics use cases that require reliable,high-throughput connectivity.According to ABI Research,commercial video telematics solution shipments will reach 17.8 million units by 2030,with shipments growing almost 24%from 2020 to 2030.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSA video telematics system typically includes a deployment of road-facing,load monitoring,back-up,or driver-facing cameras.Unlike other track and trace-related use cases that predominantly rely on LPWA networks,the use of video will require more fleets to leverage highly available,high-bandwidth networks.A fleets camera system typically connects to a vehicles diagnostics port or telematics gateway through Wi-Fi,Bluetooth,or a wired connection.The chosen gateway will then likely leverage a 4G network to send relevant footage to the cloud.Two main video monitoring applications in fleet management include asset loading and unloading monitoring and driver supervision.Both use cases escalate a fleets connectivity and coverage requirements.Asset Loading:Load monitoring cameras monitor employees as they load and unload cargo from a vehicles trailer.These cameras are increasingly popular,as they can monitor cargo movements and ensure that cargo is not damaged or stolen in the docking process.The footage can also serve as evidence to exonerate employees and enterprises from any potential accusations of damage or stealing.Driver Safety:In the past,dashcams in commercial vehicles were passive instruments,capturing footage that could only be reviewed after an incident occurred.Now,smart dashcams equipped with video analytics and Artificial Intelligence(AI)can recognize predefined events in real time.For example,AI-enabled driver-facing dashboard cameras can monitor drivers and autonomously recognize pre-defined prohibited behavior,including smoking or mobile phone use.If concerning behavior is detected,the cameras will automatically begin recording and can alert the proper teams.Forward-facing cameras can have similar triggers,recognizing potentially dangerous road conditions.Advanced Driver-Assistance Systems(ADAS)enabled by video can take driver coaching even further through real-time,in-cab alerts like forward collision or lane departure warnings.Having footage of driver behavior and the areas surrounding the vehicle can be particularly helpful in the case of accidents.According to the U.S.Department of Transportation,162,529 large trucks were involved in crashes in 2023.Video monitoring systems can help prevent such accidents and also protect drivers and companies from false claims should a crash occur.According to ASIS International,businesses with connected telematics solutions like in-cab dash cams can reduce insurance claims by at least 25%and crashes by around 50%.To maximize cost savings and minimize accidents,fleet managers need a reliable connectivity partner to support the throughput and coverage requirements of such advanced,video-led applications.Shared MobilityThe shared and micro-mobility market,featuring rental rideshares,e-bikes,and e-scooters from companies like Uber and Lyft,is a relatively new fleet management vertical with unique connectivity considerations.Micro-mobility devices like rental e-scooters and e-bikes require high-uptime connectivity,as customers expect to pay for these devices through a mobile app and gain immediate access to them.This real-time transaction requires low-latency connectivity,often in urban areas crowded with other connected devices.These connected e-devices also must provide constant,real-time location data so micro-mobility companies can accurately track their scattered fleets.Locating every e-scooter and e-bike in dense urban areas requires resilient connectivity and wide-area coveragepoor connectivity or inaccurate location data could lead to missing units and loss of revenue.These companies shared vehicle services similarly depend on reliable mobile connectivity to complete customer transactions.The importance of flexible and reliable connectivity to this market is showcased by the recent news that Uber could potentially offer in-app Embedded Subscriber Identity Module(eSIM)solutions in the future to facilitate transactions,even in areas where customers have no mobile data.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSImplementation Struggles for Advanced Fleet Management Use CasesFleet management use cases like asset tracking and protection,tire and engine monitoring,and video monitoring can greatly enhance a companys fleet operations and efficiency.However,like all digital transformation projects,several implementation roadblocks can slow a solutions time to market,impacting a fleet managers ability to adopt the latest fleet management use cases.A primary concern of fleet managers when implementing a new fleet management technology is cost.In one survey conducted by ABI Research,45%of enterprises with fleets cited cost as their biggest barrier to tech implementation.Many also cited a lack of internal infrastructure as the biggest challenge in becoming a more data-driven organization.Purchasing the necessary infrastructure for advanced fleet management use caseslike new dashcams or thousands of new battery-powered sensorscan be a costly endeavor for enterprises that is hard to justify.Additionally,fleet managers often do not know where to begin when trying to digitalize their fleet,with some relying on trusted System Integrators(SIs)for guidance.Vendor ecosystem confusion can also lead to vendor lock-in,as some fleet managers would prefer to have one solution vendor for tire,engine,fuel,and video monitoring use cases.Though this reduces the complexity of an FMS,it can limit a customers choices and capabilities.FLEET CONNECTIVITY CHALLENGES BY VERTICALTRUCKING Fleets consist of semi-trucks used for either long-haul or short-haul journeys.LONG-HAUL TRUCKING FLEETS travel for long periods without predetermined routes.SHORT-HAUL TRUCKING FLEETS typically travel regionally.CONNECTIVITY NEEDGiven the length and complexity of their routes,these fleets rely on cross-country and international connectivity to send vehicle performance data to remote teams.CONNECTIVITY NEEDThough the routes are shorter,these fleet also require resilient connectivity to improve vehicle and driver productivity.NON-TRUCKING Fleets primarily include smaller commercial and public vehicles like fleets for local delivery,utilities and services,municipalities and governments,and emergency services.LOCAL DELIVERY FLEETS provide services within a residential or municipal region.CONNECTIVITY NEEDThese fleets require consistent connectivity to provide real-time updates on package location and delivery times to customers.HEAVY INDUSTRIESFleets include vehicles in mining,oil&gas,and heavy construction.CONNECTIVITY NEED:These fleets depend on remote diagnostics and asset tracking to monitor the performance and location of expensive equipment,driving demand for resilient connectivity,particularly in remote areas.UTILITY AND SERVICE FLEETS provide telephone,cable,and utility services in local communities.CONNECTIVITY NEEDThese fleets must often immediately send a vehicle and create an efficient route once an order is received,requiring quick and reliable communications and connectivity from the road.MUNICIPAL AND GOVERNMENT FLEETS are dispatched to accomplish a range of government business.CONNECTIVITY NEED Government fleets must comply with strict safety regulations,increasing the adoption of video-based driver safety use cases that require more advanced connectivity.EMERGENCY SERVICES FLEETS include ambulances,police cars,and fire trucks.CONNECTIVITY NEEDThese fleets must have accurate navigation and routing,even in rural areas,driving demand for hyper-available networks like satellite.SHARED MOBILITY MARKETS feature ride-share vehicles and micro-mobility devices like rental e-bikes and e-scooters.CONNECTIVITY NEEDMicro-mobility devices require high uptime,as customers expect to pay through a mobile app and gain immediate access to a bike or scooter.Ride-share companies like Lyft similarly depend on reliable mobile connectivity to complete customer transactions.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSFUTURE FLEET APPLICATIONS Fleet management applications have undergone unprecedented digital transformation in the last two decades.Use cases quickly graduated from simple location tracking to real-time vehicle performance monitoring.The fleet management industry is now preparing for another wave of innovation as fleet electrification,autonomous driving,and Vehicle-to-Everything(V2X)communication demand even better data management and wireless connectivity capabilities.Electrification ConsiderationsThe transportation industry is in the midst of an electric revolution.Commercial fleets are transitioning to Electric Vehicles(EVs),with forecasts predicting that 3 million commercial EVs will be on the road worldwide by 2030.Fleet operators who have yet to make the switch are preparing for this approaching transition by collecting reams of data from their diesel or gasoline-run vehicles,seeking to understand their fleets average mileage,fuel capacity,and fuel consumption to anticipate how their routes will change when adopting EV vehicles.Fleet operators must also collect and analyze data about fleet engine health and vehicle lifecycles to determine the best time to retire their fuel-based vehicles.Fleet electrification has,therefore,created enormous amounts of telematics data,driving demand for advanced cloud applications that can do this type of analysis.Low latency in EVs is crucial for enhancing the responsiveness and reliability of real-time communication.This includes reducing data transmission errors,ensuring data integrity,and enabling vehicle systems to react quickly to changes in the environment,potential malfunctions,and road safety situations.By improving latency,EVs can better manage critical functions like adaptive driving assistance,collision avoidance,and other safety systems,thereby improving overall vehicle performance and safety.Autonomous DrivingCreating autonomous trucking and commercial fleets has become a significant strategic goal for vehicle OEMs like Volvo.While fully autonomous vehicles are nowhere near the point of mass adoption,glimpses of a driverless future can be gleaned from current ADAS solutions with semi-autonomous features like automated steering.Categorized as Level 1 or Level 2 automation,these current ADAS solutions already require a complex array of sensor,video,and computing technology to partially aid the driver.Levels 3,4,or 5 automation,where a vehicle can monitor and respond to the exterior environment without much or any human supervision,will require even more advanced technologies and will create an unprecedented influx of telematics data for fleet managers to use.In the future,enterprises will require ultra-reliable connectivity for the anticipated levels of data transmission.V2X CommunicationV2X is a communication technology that enables a vehicle to transmit data to different devices in its environment,including infrastructure like road signs and other vehicles.The V2X communication vision is ambitious and predicated on an unprecedented level of connected things sharing the same communication protocols.If established,V2X communications would improve road safety and result in more efficient traffic coordination.Seen as a major use case for smart cities,V2X has the potential to transform the entire transportation market.Connectivity is the cornerstone of future V2X endeavors.Vehicles will need the support of widespread,low-latency cellular networks to communicate with each other and surrounding connected elements.V2X use cases will necessitate widespread 4G or 5G connections,with 5Gs advanced speed and low latency likely providing better support to the large-scale use cases envisioned by V2X proponents.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSCONNECTIVITY IS KING IN THE FUTURE OF FLEET MANAGEMENTAll future fleet management use casesincluding the near-term electrification of vehicles or the far-off V2X visionwill result in a massive increase in telematics data.Funneling that data from vehicle gateways to cloud applications will require wireless communication companies that can provide uninterrupted connectivity.Traditional approaches simply cannot fulfill the demands of next-generation telematics use cases.Mobile Network Operators(MNOs)deliver critical network services,but the scope of MNOs is severely geographically limited.IoT Mobile Virtual Network Operators(MVNOs)have been uniquely equipped for the tasks of more agile connectivity services by delivering more consistent coverage through a more globalized,agnostic approach,but can also be limited by dependency on MNOs,technology and logistical hurdles,and a lack of infrastructure ownership.What emerges is a new kind of IoT Software-as-a-Service(SaaS)-based service provider that leverages a unique,core network-owned infrastructure that is cloud-based that extends coverage from MNOs across the world through local Points of Presence(PoPs)for localized global connectivity.Advanced cloud-based connectivity management platforms give flexibility and cut the ties of legacy Connectivity Management Platforms(CMPs)to empower organizations to have real-time insights and control over deployed devices.ABI Research forecasts that data and analytics services revenue in the fleet management market will reach nearly US$75 billion in 2030,underscoring the need for strong connectivity partners that can support the industrys data-driven ambitions.Network Types&Requirements4G LTE networks are a dominant connectivity choice for fleet management use cases,especially as 2G and 3G networks are now being sunset around the world.The wide adoption of 4G,its consistent coverage,and versatile throughput options can support a range of higher-throughput fleet management use cases like cargo tracking,fuel management,and video-based use cases like driver behavior monitoring.LPWA networks like LTE-M and Narrowband IoT(NB-IoT)are a cost-effective choice for low-data asset tracking and remote monitoring use cases.However,LPWA and 4G networks can seem limiting for fleet applications when compared with 5G networks.5G networks have exponentially faster data speeds than 4G networks and ultra-low-latencies,but its slow adoption and inconsistent geographical coverage has limited its impact on the fleet management market.However,it can be easier to adopt this developing connectivity technology through a network provider that owns the core network infrastructure as a more direct approach.The piecemeal rollout of 5G can create hurdles when trying to tie together an approach that leverages multiple network providers or MVNOs.A robust network provider can provide service using multiple MNOs within a regionin a sense,aggregating the 5G rollout of each one to maximize 5G coverage nationwide and globally.5G adoption will slowly grow in the near term when more network rollouts occur and advanced fleet use cases like video monitoring and autonomous driving make headway in the market.Satellite connections will also steadily increase in the fleet management market,as being connected continues to be critical for fleets in remote areas with limited cellular coverage.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSImportance of Coverage and eSIMCommercial trucking fleets often traverse geographical areas that offer varying levels of cellular coverage.Fleets can travel through rural and metropolitan areas and across borders,entering and exiting regions with different national operators and 4G,5G,or LPWA coverage and availability.These vehicles must have connectivity throughout,as many fleet management use cases require uninterrupted,real-time insights into the vehicles location,health,and performance.Given these requirements,it is natural that MVNOs would be fleet management partners.MVNOs specialize in aggregating operator profiles on a single Subscriber Identity Module(SIM)and aggregating connectivity from different operators networks on a single profile.This enables a device to seamlessly move between carrier networks,creating an uninterrupted chain of connectivity across various regions and countries.Cross-carrier connectivity has become even more flexible as MVNOs have transitioned to eSIM.eSIM allows customers to remotely provision SIM cards after the point of manufacturing,meaning that customers can activate devices,and provision them with new carrier profiles,Over-the-Air(OTA)and,ergo,remotely.The technology eliminates physical SIM swapping,and network profile lock-in,allowing users and their MVNO suppliers to dynamically change networks depending on their needs.Fleet managers can now easily change their devices network profiles depending on a fleets route,or uniformly administer remote updates to a large group of devices.This“touchless,”single-Stock Keeping Unit(SKU)approach to global connectivity is not only capable of switching networks OTA,but can also support adherence to data sovereignty and localized access,while removing dependency on roaming.What combines the strengths of an Embedded Universal Integrated Circuit Card(eUICC)with remote,automatic switching on networks is a Multiple International Mobile Subscriber Identity(multi-IMSI)approach that leverages eUICC.A multi-IMSI technology solution is all managed through a single connectivity provider,which holds the existing relationships with multiple network operators,each providing its international mobile subscriber identities,and then held in a single SIM.When devices need additional coverage or a network fault is detected,these profiles can be switched OTA,allowing for remote SIM provisioning of the new IMSI,in real time.This easy management and uninterrupted coverage will become even more impactful as fleet management use cases require more real-time data processing and decision-making.As a result,more fleet managers will seek out a partner with nationwide coverage and a global footprint that supports connectivity in as many countries as possible across all network types,including 2G,3G,4G,5G,NB-IoT,and LTE-M network coverage.CONNECTIVITY AND PLATFORM PROVIDERS Enterprises can take several approaches when crafting a connectivity strategy for their fleets.Companies can purchase connectivity and a CMP separately,or they can buy a bundled connectivity and CMP offering from an operator or MVNO.Each approach has advantages,but purchasing both elements separately,or buying from an MNO,can be limiting for fleet managers when facing a new range of applications that require guaranteed connectivity and uniform management.Purchasing Connectivity and Platform SeparatelyPurchasing connectivity and a CMP from two separate suppliers is an approach that can be leveraged in the industry.If an enterprise has specific demands for both its connectivity and management THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSplatform,and is aware of all the available suppliers,it can feel empowered to handpick the two offerings it believes are best for its company goals.Companies that purchase the two separately typically lean on SIs to guide and integrate their purchases.Purchasing connectivity and a CMP from two separate suppliers leaves enterprises in a scenario where the dependency on SIs to guide and integrate their purchases can arise.Only a limited number of companies choose this option,as merging a connectivity offering with a separate connectivity platform requires an immense amount of time and money,and has a great risk of failing if the wrong supplier is chosen or the systems are not tightly integrated.An enterprise that chooses this option must integrate different operator connectivity profiles on a single,third-party platform to ensure device visibility and control across networks and coverage areas.These integrations would be extremely complex and time consuming.As a result,this option is mostly reserved for large companies with a strong incentive to control every part of their connectivity and platform system,and may simply have been an inconvenient necessity in the early days of fleet management when no end-to-end suppliers existed.Today,however,most companies choose an end-to-end supplier that typically provides a bundled connectivity and CMP offering.Particularly when leveraging a company that specializes in CMPs,especially one that can provide customers with SIMs(either multi-IMSI or eUICC),this creates a streamlined,fast time to market approach.In addition,when selecting a provider,being able to“bring your own connectivity”enables customers to bring their own IMSIs to integrate into the providers SIM profile and CMP.In doing so,there is no need for an external SI.Purchasing Connectivity and a Platform from an MNOMNOs are often large organizations with an extensive history of providing connectivity to a range of enterprises and consumers.Fleet managers might look to an MNOs experience and be enticed by their bundled connectivity and platform options,particularly if a fleet is expected to stay in the home country of a national MNO.MNOs have also traditionally promoted themselves on the grounds of longevity,as they have been in business for so long.They are,therefore,likely to be in the market to support a fleet manager for the duration of their vehicles lifetimes.However,there are several drawbacks to this approach,especially when considering fleet management use cases that require uninterrupted connectivity across various regions and networks.MNOs do not typically have roaming agreements with other operators domestically,meaning fleet managers who choose an MNO as their connectivity and CMP supplier would be locked into a single operators network for all national deployments.Additionally,an operators global connectivity is typically dictated by its roaming agreements with international partners,potentially leaving coverage gaps in key international areas.It is also more difficult for customers to achieve the same Quality of Service(QoS)and platform functionality from an MNO when operating on its international partners network.These disadvantages could have severe implications for fleet management use cases that require continuous coverage and uniform connectivity management across borders.Purchasing Connectivity and a Platform from an MVNOEnterprises can also purchase a bundled CMP and connectivity offering from an MVNO.As connectivity resellers,MVNOs can aggregate many operator networks on a single SIM and create a global coverage portfolio.MVNOs also combine these networks together into a single platform and can offer the same platform features,performance,and user interface across regions and network THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSconnectivity types.Virtual operators can guarantee this international connectivity and connectivity management at a regulated price point that is not subjected to complicated roaming fees or shifting partnerships.For MNOs,connectivity is frequently the end game,with their existing platforms allowing customers to manage connectivity for the sake of selling IoT tariff plans.For MVNOs,connectivity is just the starting point and is the building block on which they create value through the guaranteed continuity of service availability,at a predictable price point,and often with specific vertical-or application-specific experience.MVNOs are in the business of conducting all the back end“plumbing,”so that their customers do not have to,and can purchase services that they know will“just work.”Many current fleet managers already benefit from MVNOs carrier-agnostic platforms and connectivity services.But future fleet management use cases will require something even greater.As the fleet management market evolves to include more advanced use cases,fleet managers will require a next-generation connectivity providermerging the best of both MNO and MVNO worldsthat can deliver ultra-low latencies and effective localized,yet global performance across different networks,countries,and device types.Next-Generation Connectivity and PlatformingThe right MVNO partner for fleet managers in the future must establish a unique global presence in the IoT industry by building a network of highly resilient connectivity with a maximal number of local PoPs around the world.This arrangement results in fast local connectivity,globally.This type of“localized global”footprint will enable MVNOs to lead the way in supply-side provisioning for fleet management by guaranteeing the effectiveness of applications,including video monitoring,that increasingly require low-latency data communications.This,in combination with eSIM for ultra-flexible connectivity around the world,will provide the back end support that fleet managers need as they prepare their vehicles to travel into and out of new areas around the world and in different networks.However,fully redundant,highly available,and high-performance connectivity is only really usable in combination with a cutting-edge CMP designed to oversee large-scale fleets of devices on the move.Granular visibility will be necessary across a range of device types,monitoring data usage,device behavior,and connectivity performance,while managing OTA configurations and administering continual security checks and tests.A full breadth of connectivity,monitoring,and security services will be needed to allow fleet managers to receive real-time insights into their fleets around the world,and is necessary to optimize the performance of those devices that enable business-critical use cases;for example tire,engine,and fuel monitoring.Such an offering will be a necessary support system today in order for enterprises to prepare for the next wave of fleet management innovation.A key consideration in fleet telematics is the need to balance capturing real-time information with battery optimization.Latency is a crucial element in this balance,particularly when considering low-power telematics use cases,where the expectation is that the battery lasts the entire device lifecycle.Locally derived connectivity significantly decreases latency,compared to roaming,and can shorten data communication time by a third.While this might not seem like much at first glance,this can ultimately double the lifecycle of a devices batteryjust through latency alone.Other technologies like Extended Discontinuous Reception(eDRX)and Power Saving Mode(PSM)when implemented alongside LPWA networks can deliver on the balance of pertinent data insights,while also optimizing battery life.THE FUTURE OF FLEET MANAGEMENT:EXPANDING USE CASES AND CONNECTIVITY REQUIREMENTSCASE STUDY:A COMPETITIVE EDGE IN AUTOMOTIVE IoT WITH FLOLIVEAutoMobility is a leading distributor and manufacturer of automotive aftermarket electronics.Its extensive product portfolio includes dash cameras,app-based remote vehicle starters,security features,and more.The company has innovated its products as customer demand for connected devices has grown.For example,the company has integrated its remote vehicle starter capabilities into a smartphone application that also measures vehicle metrics.This solution requires resilient mobile communications between sensors,the vehicle,and the users smartphone(s).With floLIVE,AutoMobility could offer its customers consistent global coverage for seamless user experience and simplified management.Additionally,by using floLIVEs integrated platform,alongside its connectivity services,AutoMobility accelerated its time to market and now has comprehensive visibility into its devices and network behavior.What AutoMobility gained from this partnership specifically is:Robust Connectivity:floLIVE offers a large IMSI library supported through UICC,eUICC and Multi-IMSI,which offers both a single-SKU SIM approach for streamlined logistics and allows AutoMobility to achieve worldwide connectivity through a wide choice of network operators.Single SKU:Instead of going from provider-to-provider to source connectivity,AutoMobility can leverage floLIVE and have access to a global connectivity library supported on floLIVEs own mobile core network infrastructureand all profiles are available on a single SIM,removing the complexities associated with managing multiple SKUs.Application Programming Interface(API)Integration:For increased flexibility and interoperability,floLIVE exposes its API for back end integration across technologies and hardware.Visibility and Management:floLIVEs connectivity management platform makes it possible for AutoMobility to achieve granular visibility in device and network behavior for comprehensive support and management.SUMMARYThe fleet management market has matured from simple track and track use cases to advanced video-based monitoring and autonomous applications.Ushered in by improvements in IoT and wireless communication technologies,this new era of innovation will call for even greater advancements in sensors,cloud services,and connectivity technology.Each fleet management vertical will undergo some digital transformation as new FMSs and wireless communication networks like 5G and satellite become more available.As fleet managers assess connectivity and CMP suppliers for the future,they will choose a partner that can offer uniform management across a fleet of devices and facilitate the quick,global connectivity that will be foundational to fleet managements evolution.Published August 2024 157 Columbus AvenueNew York,NY 10023Tel: 1 516-624-We Empower Technology Innovation and Strategic Implementation.ABI Research is uniquely positioned at the intersection of end-market companies and technology solution providers,serving as the bridge that seamlessly connects these two segments by driving successful technology implementations and delivering strategies that are proven to attract and retain customers.2024 ABI Research.Used by permission.ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of objective research by ABI Research staff at the time of data collection.The opinions of ABI Research or its analysts on any subject are continually revised based on the most current data available.The information contained herein has been obtained from sources believed to be reliable.ABI Research disclaims all warranties,express or implied,with respect to this research,including any warranties of merchantability or fitness for a particular purpose.
2024-10-24
13页
5星级
User Needs and Requirements#EUSpaceReport on Rail2023 Page 1 TABLE OF CONTENTS 1 INTRODUCTION AND CO.
2024-10-24
104页
5星级
User Needs and Requirements#EUSpaceReport on Road and Automotive2023 Page 1 TABLE OF CONTENTS 1 INTR.
2024-10-23
142页
5星级
Computer on Wheels:The Missing MarketREPORTHow software commercialization will accelerate the advanc.
2024-10-23
16页
5星级
Supply Chain Management in a Resource-Constrained World2Key Findings Geopolitical,trade,demographic .
2024-10-23
18页
5星级
Part 2:The transportation and logistics industry On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 02ContentsBackground and key findings 03An introduction to the transportation and logistics industry 05Future trade projections 10Attributes of the transportation and logistics industry 12Keeping transportation and logistics on the move:How they work,market drivers and trends 14Supply chain risks in the transportation and logistics industry 17Examples of supply chain trends and losses 20WTW Global Supply Chain Survey 2023 23What supply chain risks are transportation and logistics companies concerned about?27Key drivers that shape the risk landscape 33The future risk landscape 42How is the transportation and logistics industry managing supply chain risk?51The view of supply chain risk from the inside 53Appendix 57Road 58Rail 60Air 62Sea 64References 66Key:Client quotes Insurance case studies Acceleration opportunity with industry partners General sector insightsBackground and key findings Background and key findingsOn the move:Rethinking transportation and logistics supply chains 04Background and key findingsOn the move:Rethinking transportation and logistics supply chainsBackground and key findings Every industry,government,and consumer relies on transportation and logistics companies to get their goods from raw materials to end consumers,and in the last few decades the sector has powered global growth by enabling just-in-time business models.As the industry has grown in size,volume,and complexity,the associated risks have also increased.Understanding the industry and where it touches every sector through transporting raw materials,components and finished goods is important to every insured and insurer.Where the food and drink industry supply chain can be considered relatively linear,and the semiconductor supply chain multidimensional,the transportation and logistics companies move all tangible goods that make up the global economy.Some risks are within an organisations control and others like geopolitical risks have elements that can extend beyond the balance sheet of any one institution.This report examines transportation and logistics supply chain risks and the ways companies are responding through a survey and interviews with over 120 businesses operating in the sector to provide the insurance industry with a greater understanding of customer needs,protection gaps and potential insurance solutions (see Section 3).This section provides a profile of the transportation and logistics industry and the needs of businesses operating in the sector.Key findings include:Transportation and logistics companies have always been at the sharp end of supply chain risk and respond to operational events and balancing capacity every day.They take risk seriously:investing heavily in redundancies,ensuring they have robust contingencies in place,sharing resources and building partnerships within the industry.As seen in the semiconductor industry,transportation and logistics companies have deep partnerships within their industry Six key supply chain risks and drivers are currently at the forefront of the minds of transportation and logistics businesses:sustainability,decarbonisation and ESG;technology;labour;business model;and regulation.Global trade,geopolitics and geoeconomic risk were other key issues highlighted in our discussions with businesses in the sector Most companies we spoke to demonstrated a rising awareness of risk and growing complexity as companies acquire different modes to gain greater control over delivery and inherit their risk landscape and regulatory responsibilities.However our research has shown a range of risk maturity seen across the companies we spoke with some very advanced in their journeys and others knowing they need to catch up.There was also a range of understanding of supplier resilience,ranging from high level information only to progressive part sharing warehouses with competitors to pool resources The insurance industry can play a significant role in the protection of the billions of dollars worth of investment being made in transportation and logistics.Increased collaboration can provide opportunities for insurers to demonstrate the value of insurance and grow in partnership with the transport and logistics sector.Lloyds,through platforms such as Futureset and the Lloyds Lab,and the brokers who advise customers as risk partners can help to convene stakeholders and support conversations and enable new partnerships to be forgedFigure 1:Keeping global growth moving forwardsSource:AMD SEC filing,Statista4$9.7trn global transport and logistics industry$89trn Global GDP$595bn global semiconductor industry$9.4trn global food and drink industryAn introduction to the transportation and logistics industryOn the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industry06On the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industry Transportation and logistics companies connect every country and industry.The industry keeps global progress on the move and recovered from COVID-19 to hit a total market size of$9.7trn worldwide in 20231.One of the first signs of modern logistics that rely on systematic distribution can be seen written in the military history of ancient Greeks and Romans to provide support for their long campaigns2.Today,fuelled by the development of internal combustion engines and emerging technologies,companies around the world may have entire departments dedicated towards logistics.From single parts in envelopes to the intermodal container that revolutionised world trade,different modes of transportation move goods around the world at different speeds and volumes.Transportation and logistics companies offer a global network of connections and capabilities depending on the routes and speeds needed.Economies of scale and efficiency have enabled the rapid globalisation of supply chains over the last 30 years and between 1950 and 2020 world trade volumes have grown by an estimated 4,100%3.Costs have fallen with larger ships,more efficient transport mechanisms and offloading capabilities,and consumers and users of their services have quickly become used to the just-in-time business model.With the rise of e-commerce,companies are now handling a larger volume of shipments than ever before,and this increases the risk of loss or damage.This makes insurance an essential component of risk management,providing coverage against potential financial losses resulting from various incidents that may occur during the transportation of goods.On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industryAn introduction to the transportation and logistics industry0708Without transportation and logistics,supply chains grind to a halt,as the world discovered during the pandemic and global trade sanctions as a result of the conflict in Ukraine.This was underlined again by the Ever Given incident,when one massive container ship blocking the Suez Canal was enough to throw a large proportion of global trade off track with an estimated$9.6bn of global trade held up every day5.Companies in the transportation and logistics industry are amongst the worlds largest companies.UPS has an enterprise value of$167bn6;Maersk,the worlds largest shipping line,is$222bn7;and Kuehne Nagel a large Swiss third party logistics company(3PL)is$32.9bn8.As we emerge into new consumer-fuelled trading conditions and reglobalised trade relationshipsi,businesses and governments around the world and industry are reconsidering how they move and store goods between their supply chain nodes and looking to logistics providers to help them improve and optimise.In turn,these companies are looking to insurers to support their risk management activities and provide them with suitable risk transfer solutions in order to stay competitive.Protecting this growth will be essential.Industry research forecasts that global transportation and logistics market may reach$13.8trn by 20289,growing at a compound annual growth rate(CAGR)of 6.23%.In the short-term,the conflict in Ukraine,inflation,and fears of a global recession threaten a slowdown in the performance of many companies and the associated logistics market.Asia-Pacific has the largest market size worth about$3.9trn in 2020.This has been driven by the expansion of trade routes and the shift of industrial production to Asian countries the last few decades.Shipping dominates the region and global trade,with container trade flow within Asia reaching a volume of 41.5m TEUsii in 202110.The rapid growth of the transportation industry in emerging countries has been fuelled by increased foreign direct investment(FDI),the establishment of free trade zones,and reglobalisation trends.At a country level the demand and share of transportation varies widely depending on geographic factors and intra-country and global trade patterns.Countries with long distances to coasts or no access to the sea have unsurprisingly invested in other forms of transportation and logistics.Tonnes per kilometres are often used measurements in exploring the share of goods moved across different modes.However,they dont tell the full story and varies across the world as highlighted in Figure 3 that explores European Union (EU)trade with the rest of the world and the view in the United States(U.S.)where trucking dominates internal movement of goods.i reglobalisation is a term used most recently by WTO Director General Ngozi Okonjo-Iweala,as the current and likely future trends of greater economic integration that is taking place in some areas alongside the fracturing of the global economy in others.ii The standard container size is 20 feet long,eight feet wide and nine feet tall a size thats become known as a“Twenty-foot Equivalent Unit”or TEU.Note:Commonwealth of Independent States(CIS)countries engage in political,economic,trade,and cultural cooperation;they share a free trade area and a visa-free regime.They include:Armenia,Azerbaijan,Belarus,Kazakhstan,Kyrgyzstan,Moldova,Russia,Tajikistan,and Uzbekistan12Source:Market research reports13Global market share in$bn,20200 004000500250045001000300015003500 CIS LATAM Africa Europe North America Asia-PacificFigure 2:Understanding market dynamics113283433451,6452,0293,909Global market value by transportation mode in$bn,20220SeaRailRoadAir200040005002500450050001000300015003500 2030 2022On the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industry09Figure 3:No one standard view.Understanding trade dynamics and transportation modesIn 2021,EU exports were valued at 2,181bn and imports 2,119bn14-with differences between EU countries depending on the geographic factors,for example access to the sea.The picture also shifts when factoring in whether goods are being imported,exported,or traded domestically.In 2019,the U.S.transportation system moved a daily average of about 55.2m tonnes of freight valued at more than$54bn.The largest percentage of goods approximately 74%of the weight and 56%of the value of goods moved less than 250 miles between origin and destination in 2022.In contrast,about 7%of the weight and 17%of the value of goods moved 1,000 miles or more.Trucks via roads carry the largest shares by value in both current and constant dollars for shipments moved less than 2,000 miles,while rail is the dominant mode by weight and tonne-miles for shipments moved 1,000 to 2,000 miles in 2020.In the U.S.,the top 10 commodities by weight accounted for 67%of total tonnage,while the top 10 commodities by value accounted for 59%of total value of goods moved in 201915.Note:Weight is calculated as tonnes per kilometer.Germany,Ireland and Netherlands data represents%by tonnes per kilometer.Source:U.S.Department for Transportation,Bureau of Transportation Statistics16 and Eurostat17Mode of transport for goods traded between the EU and the rest of the world.2021 Sea Air Road Rail Other0 0%European UnionGermanyIrelandNetherlandsU.S.Value of Shipments by Transportation Mode ($billions USD adjusted to 2017)Sea Air Road Rail02,0004,0006,0008,00010,00012,00014,000DomesticImportExportMode of transport by weight and value of goods traded between the EU and the rest of the world.20210 0%EU Export-WeightEU Import-WeightEU Export-ValueEU Import-Value Sea Air Road Rail OtherOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industryAn introduction to the transportation and logistics industry1011Future trade projectionsThis is also subject to change going forwards.The transport sector plays a significant role in increasing access to opportunities and is a crucial enabler for the 2030 Agenda for Sustainable Development18.The OECDs International Transport Forum(ITF)publishes a global outlook of current trends and future transport demand and the associated emissions to support policy scenarios19.The 2023 ITF Transport Outlook models two scenarios one informed by announced or existing policies(current ambition)and a second assuming more ambitious decarbonisation measures(high ambition scenario).Maritime transport is expected to continue to dominate freight activity regardless of scenario;however,road and rail modes are expected to more than double their share under both scenarios.Figure 4:Projected freight transport demand by region and modeShares of tonne-kilometres by transport mode in 2050 under the current ambition and high ambition scenarios Sea Air Road Rail Non-motorised0 0seline 2019Current ambition 2050High ambition 2050Non-motorised0.50.50.5Road222731Rail71013Sea7062.556Air0.50.50.5Source:OECD ITF 202320 ENEA Europe LAC Maritime MENA SEA SSA SSWA TAP UCANFigure 4:Global manufacturing capacity by location(%)010020030020192020202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industryAn introduction to the transportation and logistics industry1213Attributes of the transportation and logistics industryStrategyOperationalResilienceChanging trade patterns The transportation and logistics industry is subject to varying levels of consumer demand and economic activity more broadly.The use of capacity management is crucial in ensuring there is always enough capacity to meet inconsistent levels of demand like the consideration of production schedules and delivery times Strategic forecasting is increasingly important to predict inventory and sourcing requirements allowing adjustments to stay within tolerances Technology like artificial intelligence(AI)and blockchain to track shipments to optimise route efficiency,increasing visibility through the use of Global Positioning System(GPS),automating processes to reduce staffing costs and creating a better customer experience all show a positive upwards trend in producing a seamless and fulfilling experience Companies have tended to extend their domestic business logistics to global logistics(GLs)because of their international markets and customers.Onshoring and increasing product demand is also increasing pressures to invest in smaller more local fulfilment centres,which is capital heavy In recent years the volume of e-commerce and the number of urban deliveries has steadily increased21.By 2030,cross-border e-commerce in goods is expected to grow to$12trn in merchandise value from its current$300bn22,resulting in substantial changes in supply chains.This ongoing trend,which accelerated during the pandemic,directly affects the number of vehicles needed to meet transport demand,as well as the number of delivery trips made by these vehicles Transportation and logistics covers different methods,predominantly by road,rail,sea and air.Each mode offers a different cost and speed proposition.Often,these varying methods act as one complete journey of a product Often,a single destination will receive many shipments from multiple suppliers.Careful planning and communication is required to ensure these shipments arrive at the right place at the right time.Freight forwarding is the industry recognised solution for this Logistics and transportation of goods is complex and requires large warehousing to store and handle goods between transportation stages.Companies need to ensure they have enough warehousing space to accommodate their inventory.The locations of these warehouses need to be strategically placed to ensure a smooth operating process The movement of products between locations brings with it hazards of physical injury and inefficiencies which could damage reputations.Procedures to ensure the safety and efficiency of the movement of these goods from manufacturers to end customers are essential.Given the many stages of delivery of an end product,production,storage,delivery and distribution there are multiple touchpoints where risk could occur Business sustainability remains a challenge with companies having to use alternative fuels,replacing machinery with new efficient alternatives and related costs means an increase in consumer prices in reaction to this Transportation and logistics companies need to have the flexibility to adapt and recover from supply chain disruptions to ensure survival.To mitigate this,contingency planning is used to prepare for potential disruptions and improve chances of success.Risk management,mitigation planning,understanding the supply chain and business continuity planning hugely influence resilience A robust infrastructure to minimise route disruption and diversifying methods of transportation,suppliers and warehouse locations is crucial to ensure agility and survival in a competitive fast paced industry Technology proves to be a huge resource when looking to recognise efficient logistical processes and modernise processes to minimise unnecessary disturbances Todays forward-looking enterprises are dynamic and have collaborations with business stakeholders such as suppliers,customers,and some competitors.They use modern technologies and share information and knowledge in an effort to create a collaborative supply chain Identifying investment opportunities such as automation to increase efficiency puts companies in a position of proactiveness rather than being reactive Transportation companies are subject to changing trade agreements and geopolitical trends.Examples include renegotiation or withdrawal of multilateral agreements such as the North American Free Trade Agreement(NAFTA)and the Trans-Pacific Partnership(TPP)The global footprint of state-owned enterprises,especially from China,is growing23 Constant regulatory changes influencing the industry,such as a tighter governing of driver hours in a competitive environment Tighter contracts as a result of economic pressures such as inflation,driver shortages,rising fuel prices result in less scope to compromise on pricesWhen we talk about smart transportation,it is more than moving cargo from A to B.Digitisation within transport and logistics means seamless service to our customers,visibility in the supply chain,and driving a more efficient business.CEO,Global Marine ShippingWithout freight rail,many U.S.industries would shut down.Communities could lose access to chemicals necessary to ensure clean drinking water.Farms and ranches across the country could be unable to feed their livestock24.U.S.President Joe BidenWithout logistics the world stops.Transport&logistics industry expertNo supply chain can properly operate without a global system of predictable and facilitating trading rules,such as the one the WTO operates.But these rules alone can do nothing for trade if supply chains are being physically interrupted.All constituents of the world trading system-from the private sector to governments,regulating authorities and international organisations-must now play their part in a response25.WTO Deputy Director-General Jean-Marie PaugamOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsAn introduction to the transportation and logistics industryAn introduction to the transportation and logistics industry1415Keeping transportation and logistics on the move:How they work,market drivers and trendsThe transportation and logistics supply chain is global and made up of moving parts and stationary storage through warehousing.Each company may specialise in one or more steps of the process,with an increasing trend of companies acquiring different capabilities to control end-to-end delivery.There are also third party logistics providers(3PLs),who provide supply chain management including inventory management,warehousing and fulfilment(often road freight transport);and more recently fourth party logistics providers(4PLs)that integrate the services of multiple 3PLs to manage the clients supply chain.For international trade,freight forwarders contract with a carrier or multiple carriers on behalf of the shipper to move goods from one country to another using ships,planes,trucks and railways and multiple modes for a single shipment.Freight forwarders help to manage the customs and other documentation required for import,export and transhipment.Transportation and logistics companies can be classified into a series of different business models and transportation modes.To carry out this research we have spoken to companies all over the world who represent these different areas to gain a view of the issues on their minds and their attitudes towards risk and insurance.Regional specialists:Dedicate themselves to their markets and operating within fixed trade borders or landmasses Journey stage specialists:Concentrate efforts on specific stages of the above journey,such as warehousing or distribution Mechanism specialists:Focus on specific modes of transportation as outlined below,concentrating on their specialist capabilities.They may operate globally or within region(s)End-to-end specialists:Do it all and are some of the worlds largest companies in value and geographic reach,operating from raw materials coming out of the ground to delivering final packages at end destinations.In many cases they are the result of sustained mergers and acquisitions to fill gaps in their capabilitiesThese business models are made up of and rely on key transportation and logistics mode subsectors with trends and example companies outlined in the appendix.The availability and quality of transportation infrastructure and warehousing differ between countries and transport modes,as does the availability and quality of vehicles and logistics service providers:Road:The road network allows access to most industrial sites,ports and terminals and is usually the first access mode that is constructed within countries.It also requires little investment by commercial users as construction and maintenance is enabled by governments and taxation.Road freight is usually classified as Full Truckload(FTL)or Less Than Truckload(LTL).Another classification occurs in the size of vehicles with distinctions between Light Commercial Vehicles(LCVs)which weigh less than 3.5 metric tonnes and Heavy Goods Vehicles(HGVs)of over 3.5 metric tonnes Rail:Rail freight transportation is the use of railways and trains to transport cargo/freight/goods.Trains are typically a group of wagons hauled by one or more locomotives on a railway network,between the shipper and the intended destination as part of the overall logistics supply chain.Using fixed infrastructure makes it less prone to disruptions,but also means that goods have to be brought to a rail terminal if a site has no connection to the railway network.A common application for rail freight is transport of regularly scheduled and heavy bulk loads Air:Is the fastest available transport mode over long distances and also the most expensive.Air cargo transports over$6trn worth of goods,accounting for approximately 35%of world trade by value,but only a fraction of the weight28.The airfreight world tends to run along“trade lanes.”The two biggest trade lanes carry goods from Asia to North America and from Asia to Europe29.Freight is moved either in the hold of passenger aircraft or in dedicated air freighters and because of cost is typically either high value or time critical goods.Air freight is critical to some high value add industry supply chains,such as semiconductors and most recently pharmaceuticals moving COVID-19 vaccines Sea:Maritime shipping is the backbone of world trade,and it is estimated that 80%of all goods are carried by sea.Sea freight,whether in containers or in bulk,is generally a slow but cost-effective option for the transportation of large or low-value/high-volume items.As well as container ships bulk carriers transport crude oil,refined petroleum products and liquid natural gas as well as biomass,agricultural products,and commodities such as steel.Usually there is always a need for double handling,as goods have to be brought to and away from the portThe interconnectedness of transportation systems can lead to resilience when one mode of transport can be substituted for another in the case of a disruption.For example,freight could be transported via inland waterways if rail or road transport are disrupted.Investments in infrastructure support sustainable growth and resilience and need to be upscaled.In the U.S.alone,the infrastructure investment gap to maintain critical and aging infrastructure is$500bn on average per year until 204030.Partnering with the private and public sector,the insurance industry is critical for strengthening societys resilience to climate risks,by investing in and underwriting sustainable infrastructure this will be critical with the future growth that is projected.Figure 5:Transportation and logistics subsectorsNote:Outside of individual packages and small,specialised containers,there are two main classifications of freight goods:bulk products and intermodal containers.The former category can refer to aggregates,cement,grain,biomass,oil and petroleum,for example the product is fundamentally a loose product.The second category,intermodal,refers to the transportation of goods in standardised containers that facilitate transfer between road,rail and sea.Source:The Geography of Transport Systems27 An introduction to the transportation and logistics industry16On the move:Rethinking transportation and logistics supply chainsFigure 6:Current and future transportation and logistics supply chain flowsMovement of goods in 2022Movement of goods in 2050Food and drink wheat trade flows Semiconductor palladium trade flowsFood and drink:11%of internationally traded maize,wheat,rice and soybean now depends on one or more of the maritime chokepoints as the only viable shipping option32.In 2017,Chatham House were already warning that 91%of grain exports and 23%of exports of potash and phosphate fertilisers were from countries that currently impose export restrictions or have done so in the past decade.Understanding the trade flows and paths for transportation and logistics is key to understanding current and future supply chain risks.Semiconductors:As highlighted in our previous report,Loose connections,semiconductor companies are reviewing their business continuity plans,seeking alternative sources of critical raw materials such as palladium and exploring neon gas recycling.With few global sources of palladium,understanding the trade flows and paths for transportation and logistics is key to understanding current and future supply chain risks.In 2021,research by the British Geological Survey38 highlighted that Russia(39%),South Africa(38%),Canada(9%)were key sources of technology critical minerals and metals,and sources of economic vulnerability to any disruption.Source:ITF Transport Outlook 2023Source:ITF Transport Outlook 2023Source:Chatham House37Source:Chatham House31Key global transportation and logistics factsSeaOver$3trn of world trade traverses through the South China Sea.The Malacca Strait connects the Indian Ocean to the Pacific Ocean.About 40%of world trade goes through it.The passage is vital for China and other East Asian states,and is increasingly essential for Indias trade.About 12%of world trade goes via the Suez Canal and about 5%through the Panama Canal33RailWith 250,000kms,the U.S.has the largest rail network in the world,with 80%of that accessible to freight.China is the second largest at over 100,000km,followed by Russia at 85,000km,India at 65,000km,and Canada at 48,000km34AirThe top 3 airports supporting cargo in 2022 included:Hong Kong(HKG)with 4.2m tonnes( 16.4%from 2021)remained the top ranked airport followed by Memphis(MEM)with 4m tonnes(-9.8%)and Anchorage(ANC)with 3.5m tonnes(-4.3%)35According to the American Transportation Research Institute,the top 3 congestion bottlenecks for U.S.trucking are:Fort Lee,New Jersey I-95 at SR 4,Chicago,Illinois:I-294 at I-290/I-88,and Houston,Texas:I-45 at I-69/US 5936RoadTransportation and logistics companies enable global trade and progress,keeping goods on the move.Over the past four months,we have surveyed and interviewed over 179 risk,supply chain,and insurance practitioners,and these perspectives have provided real-life,practical insights into the challenges that companies across the transportation and logistics industry are facing as a result of the highly interconnected world we live in,and a historic but now changing reliance on just-in-time business models.Every industry around the world that creates and deals with physical assets relied on their capabilities,therefore understand the way they view risk is essential.Supply risks:Impacts inbound supply,implying that a supply chain cannot meet the demand in terms of quantity and quality of parts and finished goods.The outcome is labelled as a supply disruptionOperational risks:Impacts elements within a supply chain,impairing its ability to supply services,parts,or finished goods within the standard requirements of time,cost,and quality.Transportation disruptions are one of the most salient operational risksDemand risks:Impacts elements of the outbound supply chain where the extent or the fluctuation of the demand is unexpected.This is labelled as demand disruptionFactors Environmental Geopolitical Economic Technological Natural disasters Extreme weather Pandemics and epidemics Political instability Trade restrictions Terrorism Corruption Theft and illicit trade Piracy Demand shocks Price volitility Border delays Currency fluctuations Energy shortages Inflation and consumer demand ICT distruptions Infrastructure failures Disruptive technology Transition risksSupply risksOperational risksDemand risksFigure 7:Supply chain risks and driversSource:Various39Supply chain risks in the transportation and logistics industryOn the move:Rethinking transportation and logistics supply chains 18Supply chain risks in the transportation and logistics industryOn the move:Rethinking transportation and logistics supply chainsSupply chain risks in the transportation and logistics industryThe transportation and logistics industry enables companies to offer customers the products they desire,when they want them and where they want them,efficiently and economically.Transportation and logistics supply chains are global in nature,often very sensitive to disruptions and subject to the related factors that may cause the disruptions.Some supply chain risks are within an organisations control and others like geopolitical risks or extreme weather have systemic elements that go beyond the balance sheet of any single institution.On the move:Rethinking transportation and logistics supply chains 19Supply chain risks in the transportation and logistics industryBox 1:Recent trends affecting transportation and logistics supply chains E-commerce:The rise of online shopping since 2000,and particularly since the COVID-19 pandemic,has led to an increase in demand for faster and more efficient delivery of goods.As a result,transportation and logistics companies are investing in new technologies to improve their operations and meet customer expectations Sustainability:There is growing concern about the environmental impact of transportation and logistics.As a result,companies are investing in alternative fuels,electric vehicles,and other sustainable technologies to reduce their carbon footprint Climate risks:In 2022,the world saw major examples of transportation disruptions can result from drought.The Mississippi River,for example,carries 92%of U.S.agricultural exports,and its water levels dropped to the lowest levels in 34 years40.Drought also impacted key European rivers and water scarcity lowered summer crop yields41 Digitalisation:The adoption of digital technologies,such as the Internet of Things(IoT),cloud computing,and artificial intelligence,is transforming the transportation and logistics industry.These technologies are enabling companies to optimise their operations,reduce costs,and improve customer service Supply chain disruptions:The pandemic has had a significant impact on the transportation and logistics industry.Restrictions on movement,supply chain disruptions,and reduced demand for some goods and services have affected companies across the industry.Other events such as the Suez Canal blockage in March 2021,which disrupted global supply chains and caused delays and increased costs for many companies has also taken its toll Last-mile delivery:Last-mile delivery is becoming increasingly important as more consumers shop online.Transportation and logistics companies are investing in new delivery methods,such as drones and autonomous vehicles,to improve the efficiency of last-mile delivery Cyberattacks:Cyberattacks on transportation and logistics companies such as Swissport,Expeditors International and Maersk have become increasingly common in recent years.These attacks can disrupt operations,compromise sensitive data,and cause financial losses Driver shortages:The transportation and logistics industry has experienced a shortage of drivers in many regions.Irregular working hours,low pay and ageing workforces has led to increased competition for drivers,higher wages,and higher transportation costs Trade wars and tariffs:Ongoing trade disputes between countries42 and embargoes as a result of geopolitical instability,has affected global supply chains and led to increased costs for some companies.Overall throughput at Hamburg terminals fell by 6.8%to 119.9m tonnes,with the conflict in Ukraine,global supply chain issues and local labour disputes pointed at as sources43.The imposition of tariffs on goods has also affected trade flows and logistics operations44On the move:Rethinking transportation and logistics supply chains 20Supply chain risks in the transportation and logistics industry201320142015201620172018201920202021201320142015201620172018201920202021Examples of supply chain trends and lossesNot all risks can be mitigated and when supply chain disruption events occur and impact physical assets they can result in high losses,both for the industry and for those who depend on their capabilities to keep goods on the move.Examples of historic supply chain events and losses have been outlined on the next page to raise awareness.There is also value to be gained in considering events not in the data,through counterfactuals to stress test forward looking assumptions.Figure 8:Insured cargo losses by mode of transportation Number of cargo losses by mode of transport between 2013-2021Cargo incurred losses by mode of transport between 2013-2021,$m Sea Air Road Rail Storage Unknown Sea Air Road Rail Storage Unknown001002003005004005001000Source:IUMI Claims Database45 International Union of Marine Insurance established a database in 2018,which now contains 11,000 claim records from 27 countries that sum up to$17.3 bn of total losses.There is an ongoing invitation for further associations to join their data collection efforts.On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 2122Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryMaritime chokepointsVessel lossStrikesDerailmentsFactory firesRoughly$270bn of cargo crosses the canal each year.It serves more than 140 maritime routes to over 80 countries46.In Panama,events related to excess rainfall,such as“La Purisima”in 2010 and the floods in the Province of Colon in 2012,caused losses of more than$270m and forced,on one occasion,the temporary closure of the Panama Canal operations47.In 2015,ocean carriers were forced to cancel services and make costly adjustments in the wake of congestion at the Panama Canal.Delays of up to 10 days were experienced in late October and early November by container ships on both the Atlantic and Pacific sides a significantly longer canal transit time than the average 24-30 hours48.In March 2023 a vessel had a near miss with a lock gate that could have caused global delays49.In March 2021,the Ever Given was on its way from Taiwan to Rotterdam with approximately 18,300 shipping containers onboard when the vessel was wedged across the width of the waterway.As the ship completely blocked all traffic,around 400 other ships were also delayed and forced to wait for their turn to pass through the canal.It will take many years to settle the claims from the Ever Given and the process will include much debate about who is liable,with SCOR estimating that reinsurers may have to absorb the bulk of the claims,which could amount to more than$2bn50.In March 2022,the fire and subsequent sinking of the ro-ro carrier Felicity Ace with the loss of some 4,000 vehicles,put the risks associated with transporting electric vehicles(EVs),and the lithium-ion(Li-ion)batteries that help power them,firmly in the spotlight51.As risks in this area continue to unfold insurers may wish to explore industries focusing on battery technology and how they are shipped.In 2019,the car carrier MV Golden Ray capsized off the coast of Georgia,U.S.,while carrying 4,200 new cars.The ships value was estimated to be around$50m but a complex removal cost was over$500m During the process of breaking up the wreck,a fire broke out due to hot work causing another loss52.According to the maritime body the International Union of Marine Insurance,a fire breaks out on a container ship every 25 days,usually in connection with cargo53.Allianz Global Corporate&Specialty analysis of over 240,000 marine insurance industry claims between January 1,2017,and December 31,2021,worth approximately 9.2bn in value,shows that these are the most expensive cause of loss,accounting for 18%of the value of all claims54.2022 saw a large increase in labour disruption around the globe,with a 92%year-on-year increase on this front.Examples of this are the protests at the Foxconn iPhone factory in China,and the Felixstowe port strike in the UK.The strike in August 2022 at the UK Port of Felixstowe resulted in$800m of disrupted trade,after an estimated 1,900 workers went on a nine-day strike in a dispute about a pay increase.Russell Group analysis shows that clothing($82.8m)and electronic components($32.3m)were most impacted by the industrial action55.In the U.S.fire departments respond to an estimated average of 1,450 structure fires in warehouse properties per year(excluding refrigerated or cold storage),causing an annual average of$283m in direct property damage56.Indias largest container port Jawaharlal Nehru Port(also known as Nhava Sheva Port)experience protracted labour unrest in 2015 with widespread industrial action between January August.Go-slows and strikes by crane operators and truck drivers at halted almost all operations,creating cargo backlogs and congesting road routes both into and out of the key terminals.Many companies-imposed emergency surcharges with shipping diverted to alternative terminals and ports57.The UK Rail Safety Standards Board estimates that freight train derailment makes up 40%of the risk of operation58.The American Association of Railroads has reported that accidents have fallen by 44%since 2000,and accidents caused by track and equipment problems also are trending downward59.Derailments can have a number of causes from maintenance to design,and can also cause significant damage to railway infrastructure and result in major environmental damage(as occurred on 26 August 2020 at Llangennech,when 446,000 litres of fuel spilled at a site that was both a special scientific interest(SSSI)and a special area of conservation(SAC)60.In 2020,a freight train carrying crude oil derailed in Saskatchewan,Canada.Several tank cars were breached and an undetermined amount of petroleum crude oil product was released that ignited and a pool fire ensued61.In 2023,38 rail cars derailed in Ohio,U.S.and 12 more were damaged by fire in the derailment62.3,609 factory fire alerts were recorded in 2022,up from 1,946 for 2021 an 85%year-on-year increase.According to research by Resilinc,fires were the most common cause of supply chain disruption for the fourth year in a row,with the U.S.reporting the most fires in 2021(450),almost triple the incidents of India(150).Germany and South Korea reported just below 150,and Mexico around 100.In the U.S.in 1982,a distribution warehouse for a supermarket chain saw a claim of over$100m63.A fire at an Ocado warehouse in July 2021 held up thousands of customer orders.In March 2021,an incident at a major semiconductor factory in Japan halted production for a month but took considerably longer to reach full capacity again64.In 2023,cargo underwriters are anticipated to face claim of around$50m after a warehouse fire in the Netherlands inflicted major damage on a cargo of cocoa beans65.A 2022 fire in Indiana destroyed a 1.2-million-square-foot fulfilment warehouse for a major retailer.It required 350 firefighters and 30 fire agencies assisting in fighting the blaze.Damage was significant enough to prevent it from reopening.CyberPort explosionsAir chokepointsEarthquakesAdverse weatherAccording to research by ENISA,aviation was the most-attacked segment between January 2021 and October 2022,with some 27 incidents recorded.Attacks on road were the second highest,at 24,rail at 21 and shipping with 1866.In 2017,the cyber-attack,dubbed NotPetya,affected a vast number of organisations,including Maersk,causing significant financial loss an estimated$300m67.Maersk was not the intended target of the attack-they just happened to be using a version of Microsoft Windows the malware was designed to exploit.However,Europe saw a string of ransomware attacks on ports throughout 202268.In 2019,Lloyds published a research report highlighting that a cyber attack on Asia-Pac ports could cost$110bn69,equal to half of all 2018 natural disasters.In August 2015,two consecutive explosions at a container storage station in Chinas Port of Tianjin killed more than 170 people,injured nearly 800 and resulted in billions of dollars in damage.On Tuesday 4th August 2020 at 18:07 local time a fire was closely followed by an explosion at the Port of Beirut.The explosion was caused by 2,750 tonnes of ammonium nitrate improperly stored in a warehouse since 2013.A state of emergency was declared in Beirut for two weeks following the event.Estimated damages range from$3.8-4.6bn70 to$15bn71.This incident is considered one of the biggest non-nuclear explosions to have been recorded72.In 2010 Kenyan farmers who air-freighted exports to Europe had to destroy over 400 tons of cut-flowers when they faced multiple days of flight cancellations,due to the eruption of an Icelandic volcano73.Supermarkets make guarantees to customers around expected longevity of flowers,and with cold storage at airports full,the picked flowers could not be used.Kenyas flower council estimates losses of$1.3m a day in lost shipments to Europe74.Research also suggests further losses of Kenyan beans,mange tout,Thai mangoes,Tanzanian flowers,Israeli fruit and other exotic fruits(figs,papaya and coconuts)75.Kobe earthquake in 1995 resulted in damage to all 35 container berths,with a reported 9 out of 186 cargo handling berths functional after the earthquake.Port traffic was lost to other Japanese and global ports76.Estimates on direct losses vary in the range of about$85-147bn.Over half of losses were reported as business/industrial losses($63bn),and about a fourth to public infrastructure including public facilities at the Kobe port($32.8bn)77.The 2011 Tohoku earthquake and tsunami resulted in$210bn in costs for Japan and affected supply chains across the globe78.Unable to ship or receive needed parts,Toyota,G.M.,and Nissan all temporarily shut down facilities in both the United States and Japan.Torrential April rainfall in South Africa damages infrastructure in KwaZulu-Natal province,closing the Port of Durban for 36 hours and blocking workers and truckers from reaching port terminals79.On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 2324Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryWTW Global Supply Chain Survey 2023To gain a view on the risk factors playing the greatest role in supply chain risks,whats driving them,and what they expect to face in the short term,as part of this research series,WTW surveyed 100 risk leaders in global transportation and logistics companies.Increased product complexity and economic uncertainty feature at the top of companies agenda when managing supply chains.Supply chain losses in the last 2 years caught nearly two thirds of businesses by surprise.Around 4 in 10 companies attributed losses to Covid-related issues and the same proportion said they stemmed from earlier problems Pandemics and health-related risks to supply chain were cited by over half of companies as a top 3 risk concern Cyber-risks have emerged as a high priority issue affecting the supply chain for almost one third of businesses.Similarly,around a third of businesses are concerned about data security risks Increased product complexity,environmental change,economic uncertainty and supplier solvency and liquidity issues featured at the top of semiconductor companies agendas when managing supply chains Looking forwards,76%of companies agree that sustainability of supply chain is their key goal in risk managementFigure 9:WTW Global Supply Chain Survey 2023 key trends,factors and risks for the transportation and logistics industryTop 4 factors playing the greatest role in supply chain risks00 %Increased product complexityEconomic uncertaintyData security issuesEnvironmental changeLack of access to capitalLack of chain visibilitySupplier difficulties in attracting and retaining talentFailure to meet regulatory requirementsMaterials shortagesNatural disastersInflation and rising costsIncreased regulationSupplier capacity constraintsGeopolitical issuesIssues with shipping and/or other transport35%0#( &%Component shortagesSupplier solvency and liquidity issuesTop 3 trends driving supply chain risks00p P%Pandemics and other health-related factorsOnshoring and near-shoringClimate change and environmental factorsAvailability and cost of energyESGInflation565H5G5D%Geopolitical factors00p P%Top 3 risks posed by supply chain disruptionsShort term loss of market shareShort term loss of salesDamage to customer trustTermination of contractsLong term loss of salesLong term loss of market share49X2F&ED%Reputational damageGreater emphasis was placed on supply chain risk originating upstream,although 1 in 3 respondents felt that both up and downstream carried equal levels of risk.As seen in the semiconductor industry,at least half of the transportation and logistics companies feel confident that they have the ability to manage root causes of risks to supply chain,and 7 in 10 felt they had at least some influence over the quality of supply chain risk management.85%of businesses felt they had to act following the pandemic and made significant changes to the supply chain management,and nearly two thirds of companies are still planning to carry on with improvement and revamp their supply chains in the next year.Source:WTW Global Supply Chain Survey 2023On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 2526Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryJust-in-time operating models 34%Figure 10:Where do the greater risks to your organisation come from your supply chain?Supply chain risk-related losses in last two years0P0 0p%5-Much higher than expected 4-Higher than expected 3-As expected 2-Lower than expected 1-Much lower than expected Level of control over root causes of supply chain risks0 0P3P%1%0%5-Completely within our control4-Somewhat within our control3-Mix of within our control and outside our control2-Somewhat outside our control1-Completely outside our controlLooking forwards,transportation and logistics companies were also asked what supply chain challenges they expect to face in the next two years.While there are many commonalities across the risks that food and drink and semiconductor businesses expected to face,transportation and logistics companies were more concerned about regulation changes,and less concerned about transportation issues as they felt they had greater control over them being their operator.Figure 11:Supply chain challenges transportation and logistics companies expect to face in the next two years,compared with expectations from the food and drink industry and semiconductor industry Source:WTW Global Supply Chain Survey 2023Where do the greatest risks originate?0 0P%1$0E%Upstream risks are greaterUpstream and downstream carry equal levels of riskDownstream risks are greaterNeither upstream or downstream carries riskSource:WTW Global Supply Chain Survey 2023,transportation and logistics companiesShortage of talent 24%Construction delays 23%Shortage of drivers 30%Raw material shortage 449C702A3442)475(%Transport issues 12&#)4#6%Transportation and logisticsKey:Food and drinkSemiconductorCyber security issues 20%Logistics and warehousing shortages 39%Shipping container shortages 30%Regulation changes 40%Component or ingredient shortages 31%Energy of other service interruptions 41%Natural disasters 32%On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 2728Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryWhat supply chain risks are transportation and logistics companies concerned about?Table 1(below)highlights the key strategic and operational supply chain risks facing the transportation and logistics industry across its global value chain/key subsectors.Notable risks stem from dependence upon national infrastructure and loading,global chokepoints,and the loading/unloading of goods.Some of these key supply chain risks have potential insurability challenges,highlighted in italics and darker row colouring.These include potentially systemic risks such as pandemics,macroeconomic factors(e.g.inflation),currency fluctuations,or environmental factors(e.g.climate change,volcanic eruptions or river heights).Other commercial trading risks like fines or penalties,movement restrictions,or labour availability are also often excluded from cover,as are non-damage supply chain risks like fuel shortages.Risk groupingRisk Category Risk DescriptionDemand risk(Geo)PoliticalIncrease in protectionism impacts supply chain demand e.g.onshoring,trade embargoes,etcDemand riskEconomicLoss of a key customer and/or supplier(e.g.payment default,customer business model failure)Demand riskEconomicTermination of contractsOperational risk(Geo)PoliticalPolitical instability e.g.Middle East and other strategic chokepoints disrupts supply chain routesOperational risk(Geo)Political Fleet utilisation does not achieve required efficiency levelsOperational risk(Geo)PoliticalChanging trade patterns caused by:war,expropriation,Brexit,trade embargoes/sanctions/restrictions,greyzone aggression,negatively affect supply chain functionality or a systemic supply chainOperational riskEconomicFailure to forecast future demand effectively results in supply chain delay(e.g.E-commerce growth resulting in increased pressure for faster and cheaper delivery methods)Operational riskEconomicFailure of critical national infrastructure(e.g.due to terrorism,fire,flood,etc)results in interruption to critical service/supplyOperational riskEconomicDisruption to,or failure of,transport and logistics infrastructure can lead to an increased Accumulation Risk as stocks,equipment etc get delayed,destroyed,damaged etcOperational riskEconomicFleet transition risk(e.g.growing vehicle complexity/increased repair costs,transition to alternative fuels is delayed/too costly,inability to keep up with industry appetite for new modes of transportation and sustainability)Operational riskEconomicLoss/damage in transit(e.g.raw materials,including temperature-controlled)Operational riskEconomicGlobal economic downturn(e.g.global recession and sharp decline in demand,Inability to access credit due to excessive interest rates)Operational riskEconomicPrice volatility e.g.raw material or inputs,such as leap in container costs during pandemic,disproportionate rise in transport costs due to changing business model in transport industryOperational riskEconomicCurrency volatility or fluctuationOperational riskEconomicEnergy shortages/disruption(e.g.utility failure/disruption)Table 1:Supply chain risks On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 2930Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryRisk groupingRisk Category Risk DescriptionOperational riskEconomicFuel shortage prevents transportation upstream or downstream/employee accessOperational riskEnvironmentalEpidemic-regionalised or localised(e.g.affects supply continuity/employees/reduces demand)Operational riskEnvironmentalSignificant property damage event at own business location(e.g.fire,flood,access to water impaired)Operational riskEnvironmentalDamage to third party premises(e.g.warehouse,charging infrastructure,supplier premises,customer premises,systems disruption)Operational riskEnvironmentalDenial of access/Egress(e.g.major incident in local area,regulatory or otherwise,at own or third party premises,Construction delays at own premises or customer/suppliers)Operational riskEnvironmentalNatural disaster e.g.earthquake,volcanic eruption impact on trade routes/customer good creation/demandOperational riskEnvironmentalExtreme weather e.g.flood,hurricaneOperational riskEnvironmentalDrought/water shortage/availability of water impacting transport routesOperational riskEnvironmentalPandemic-global and systemic(e.g.affects supply continuity/employees/reduces demand)Operational riskEnvironmentalClimate change E.g.negative effect of climate change on supply chainOperational riskLegislative/regulatoryCorruption and sanction risks(e.g.confiscation or sanction of goods)Operational riskLegislative/regulatoryThird party supply transparency(e.g.one or more suppliers involved in fraud,ethical wrongdoing,such as poor working conditions,child labour exploitation resulting in reputational damage)Operational riskLegislative/regulatoryContractual risks(e.g.fines,litigation costs)Operational riskLegislative/regulatoryGovernment regulation restricts market(e.g.environmental legislation,financial disclosure requirements for suppliers/supply chain)Operational riskLegislative/regulatoryFailure to deliver on time e.g bottlenecks or delays at port or warehouse negatively affect supply chain and stock throughput(e.g.COVID-19 delays seen at major transport hubs)Operational riskLegislative/regulatoryClosure or restriction of key transport routes(Movement restrictions whether national and transnational,people or goodsOperational riskLegislative/regulatorySustainabilityOperational riskSocialTheft of stock in transit(piracy)or goods from warehouse(s)Operational riskSocialKey person(e.g.disruption of supply following loss of key person as a result of critical illness,kidnap)Operational riskSocialLabour availability and retention(e.g.drivers/warehouse staff/crew,national and transnational,talent mobility,retention,recruitment,law changes)On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 3132Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryRisk groupingRisk Category Risk DescriptionOperational riskSocialUnavailability or displacement of key equipment and consequent business interruption(e.g.warehouses,container,fleet,driver,fuel,vessels,Construction delays at own premises or customer/suppliers)Operational riskSocialReputation impact risk(e.g.reduction in quality assurance/product stewardship,lack of action on ESG,failure to respond to supply chain failure)Operational riskSocialFailure of employee health and safety results in delays and/or site closureOperational riskTechnologicalFailure of key equipment as a result of technology dependency/failureOperational riskTechnologicalIncreasing use of technology in warehouses-AI,robots,technology failure,people risks,unintended consequencesOperational riskTechnologicalCritical component industry falls short e.g.semiconductors,affecting Transport and Log operatorsOperational riskTechnologicalCyber issues(e.g.AI-enabled cyber attacks,increasing use of technology in transportation supply chain gives new touchpoints for weaponisation of Cyber for physical and virtual attacks,attack on suppliers or logistics parties,data loss,ransomware,denial of service)Operational riskTechnologicalAutonomous vehicles and/or artificial intelligence applications-risk profile changesSupply RiskEconomicFailure to successfully implement business strategy and effectively respond to changes(e.g.regulation,technology,transport modes including last mile delivery,market dynamics and customer preferences such as change in business model(JIT to JIC)is unsustainable/too costly,e-commerce growth resulting in increased pressure for faster and cheaper delivery methods)Supply RiskEconomicFailure to discharge directors obligations leads to business disruption and fines(e.g.failure to respond to ESG pressures or mandatory requirements)On the move:Rethinking transportation and logistics supply chains 33Supply chain risks in the transportation and logistics industryKey drivers that shape the risk landscapeOut of the wide range of risks mentioned,the following are the key supply chain risks and drivers of most concern to the transportation and logistics industry:Figure 12:Supply chain risks and driversSupply chainGlobal trade,geopolitics and geoeconomic riskSustainability,decarbonisation and environmental,social,and governance(ESG)RegulationTechnologyBusiness modelLabourOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 3435Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industrySustainability,decarbonisation and environmental,social,and governance(ESG)Decarbonisation and environmental,social,and governance(ESG)risks have emerged as crucial factors shaping the landscape of the transportation and logistics industry.The pressing desire to mitigate climate change has led to increased regulations and societal pressure to reduce greenhouse gas emissions.As a result,the industry is experiencing a shift towards cleaner and more sustainable practices,with examples shared ranging from the adoption of electric vehicles,alternative fuels,and efficient logistics operations.This in turn is generating new datasets and tools(see Box 5).In addition to their own operations,transport and logistics companies will also be impacted by the transition plans of their customers and the implications that this has on the products they will carry and the routes they will take.Furthermore,ESG considerations encompass broader aspects such as labour practices,human rights,and community impact.Every business model and mode shared a wide range of examples,which have been distributed throughout the report.Net zero targets and wider sustainability efforts were highlighted by our interviewees,driven at the company and transport level.For example,the International Maritime Organisation(IMO)has set out a strategy for the industry that targets a 40%reduction in CO2 emissions by 2030 and a 70%reduction by 2050.Its also stated that the industry should reduce its total greenhouse gas emissions by 50%compared with 2008 levels by the year 2050 This expanded to wider infrastructure that the industry relies on.For example the C40 Green Ports Forum,a global alliance committed to creating green shipping corridors(initially,between Los Angeles and Shanghai),has tasked those two cities to publish an implementation plan by the end of 2023.In October 2023,the Port of Los Angeles announced it has secured a grant of$30m from the State of California to support the transformation of the facility into the worlds first zero-emissions port80.Similarly,23 national signatories to the UNs Clydebank Declaration are committed to the creation of at least six green corridors,which it defines as zero-emission maritime routes between two or more ports,by the middle of this decade For rail,companies are actively developing new low-emission and zero-emission technologies,with several railroads conducting service trials on hydrogen fuel-cell and battery electric locomotives that could significantly reduce greenhouse gas emissions81Box 5:Datasets and toolsIf you cant measure,you cant manage.As increasing numbers of companies analyse and report on their greenhouse gas emissions,supply chain emissions have grown in both focus and importance.As insurers consider emissions across whole insurance portfolios,access to this data offers underwriters the ability to share their views during risk conversations with customers.Supply chain-focused coalitions covering multiple transport modes are reducing complexity by enabling shippers to participate in decarbonisation efforts.Examples of such collaborative effort already exist and are acceleration opportunities for insurers and insureds:Smart Freight Centre(SFC)created the Global Logistics Emissions Council(GLEC)Framework that has been one of the primary inputs for the new ISO 14083 standard(see report 3 for more information).SFC is an international non-profit organisation focused on reducing greenhouse gas emission from freight transportation Cargo CO2 emissions measurement methodology:As shippers,freight forwarders,and their air cargo stakeholders increasingly demand precise flight CO2 emission information,an accurate and standardised calculation methodology is critical.Adopted in 2014 and updated in 2022,the Recommended Practice 1678 for Cargo CO2 Emissions Measurement Methodology provides the most accurate calculation results and transparency to everyone interested in understanding the carbon footprint at the shipment level The SmartWay program led by the Environmental Protection Agency,aims to track and share fuel use and freight emissions across supply chains.Launched in 2004,it helps companies identify efficient freight carriers,transport modes,equipment,and operational strategies,improving supply chain sustainability and lowering costs.The program supports global energy security,reduces emissions,and is supported by transportation industry associations,environmental groups,state and local governments,international agencies,and the corporate community82 At the service provider level,IBM is one of many companies heavily investing in surfacing sustainability data relating to transportation supply chains.The companys Envizi ESG suite allows customers to build a data foundation to streamline reporting and disclosures to accelerate an organisations decarbonisation agenda.With the ability to automatically collect 500 data types from diverse sources,Envizi allows Scope 1,2,3 GHG accounting to set and track emissions targeting83.In April 2023,IBM announced a collaboration with the New York Stock Exchange(NYSE)to help support NYSE-listed companies with their larger ESG efforts84Insurance insight:It is important for underwriters to evaluate the ESG risks of transportation and logistics companies,ensuring they align with responsible business practices and maintain robust risk management strategies to address potential reputational and operational vulnerabilities.The transition to net zero is also associated with several technological,market and legal risks and stakeholders will be questioning how they can best manage,mitigate and finance these.This presents an immediate opportunity for insurers and their brokers to play a role in addressing uncertainty and supporting customers transition efforts,for example by:extending the use of existing bursaries for risk surveys to encourage activities that build understanding of the climate risks and corporate resilience leading initiatives to develop insurance products in partnership with industry developing initiatives to transfer knowledge,for example,related to risk awareness,assessment strategies and emerging regulationToday trucks account for only 2%of vehicles on the road.Yet they are responsible for 22%of road transport CO2 emissions in the EU.We cannot meet the Paris agreement without decarbonising road freight.CEO,Global End-to-end Logistics companyWe are fully committed to EU GHG emissions reduction targets for 2030 launching further electrification projects which will triple the length of our electrified railway lines and secure green and economically viable means of transportation for cargo and passengers by 2024.CEO,Regional Rail companyThrough our Net Zero Carbon programme,we have two distinct elements to reach our targets:Being fully carbon neutral in our direct sphere of influence as of 2020(Scope 1 and 2 of GHG Protocol)and achieving carbon neutrality for our suppliers and customers footprint by 2030 airlines,shipping lines and haulage companies(Scope 3).CEO,Global End-to-end Logistics companyQuotes from interviewed transportation and logistics practitionersOn the move:Rethinking transportation and logistics supply chains 36Supply chain risks in the transportation and logistics industryTechnologyTechnology risks have become a critical concern for the transportation and logistics industry,shaping its operational landscape.Rapid advancements in technology,such as automation,artificial intelligence,and the Internet of Things(IoT),offer tremendous opportunities for efficiency,connectivity,and innovation.However,they also bring inherent risks.Dependence on complex systems and digital infrastructure makes the industry vulnerable to cyber threats,including data breaches,ransomware attacks,and supply chain disruptions.Additionally,the integration of autonomous vehicles and drones introduces new liability and safety considerations topics that brokers and underwriters in the Lloyds market are already exploring85.It is also raising questions on the power requirements of new technologies,with concerns that the current grid capacity will not meet the needs of planned upgrades.Several companies are equipping freight cars with electronic data interchange with barcodes for offering near real-time response to clients.The technology is anticipated to help companies in exchanging status and orders with their clients and suppliers.These intelligent systems allow companies to reduce inventory and ensure faster replenishment of stocks Companies we spoke with were actively integrating technology solutions for transportation and goods tracking through the supply chain,with some building their own systems this was both a challenge for those further behind on their digital journeys and a huge opportunity to build visibility into their operations Cyber threats were repeatedly raised across all conversations with transportations and logistics companies,and the future of the cyber insurance market As well as new technology and automation in shipping,ports and terminals are continuing their digitalisation.From the first automated container gate thirty years ago,there are now approximately 40 partially or fully automated terminals around the world.This includes quay cranes,driverless vehicles,drones and automated truck identification.While this example was specific to ports examples were shared across all transport modes and have been mentioned throughout the reportInsurance insight:Insurance underwriters and advisors play a vital role in assessing and managing these technology risks.They evaluate the cybersecurity measures and resilience of transportation and logistics companies,providing appropriate coverage for potential losses arising from technology-related incidents,as well as supporting risk mitigation strategies to safeguard critical operations in the digital era.Technology constraints and internal communication due to our companys global footprint make it difficult to track the arrival of shipments which can lead to demurrage or customs issues.Global end-to-end Transportation companyIf a cyber threat exists then the whole system stops and freight wouldnt be able to be moved.Vice President,Regional Transportation companyOur big trucks have 6 cameras and 3 on the smaller goods vehicles,alongside telematics to detect and reward driver behavior.Head of Compliance,Regional road logistics companyThe T&L industry suffers from lagging cyber regulations and standards,inadequate cybersecurity awareness and a shortage of cyber defense talent.Industry Risk AdvisorQuotes from interviewed transportation and logistics practitionersOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 3738Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryBusiness model/physical assets The transportation and logistics industry faces various business model risks that can significantly impact its sustainability and profitability.Disruptions caused by emerging technologies,such as the rise of autonomous vehicles or the advent of on-demand delivery services,pose both opportunities and challenges for incumbents.Traditional transportation and logistics companies may face the risk of being outpaced or rendered obsolete if they fail to adapt to changing market dynamics and embrace innovative business models.Additionally,the industry is susceptible to competitive pressures,market consolidation,and shifts in customer preferences.Responding to storage and transporter shortages,companies are buying their own warehouses,cargo containers or even cargo vessels86.Examples of business model changes include:Increasing capacity:In February 2023,Yusen Logistics started the construction of warehouse expansion and the sprinkler system in their Yusen Yen Phong Logistics Center.The facility is strategically located in North Vietnam,at Yen Phong 1 IP,Long Chau,Bac Ninh Province,and is strategically located 25 km from Noi Bai airport.The warehouse space is approximately 14,400m2 and consists of general warehouse and bonded warehouse87 Partnering with stakeholders:Amazon Airs expansion is one of the most notable developments in the air-cargo industry in recent years,with a partnership with Cincinnati/Northern Kentucky International Airport at the centre of an expanding hub network.An estimated$1.5bn investment has seen the development of an 800,000ft2 facility to support their growing air cargo network88.Industry research suggests that between March 2020 and March 2023,Amazon Air expanded its fleet from 33 to 91 planes,a 176%increase89 Refining transportation modes:A research project by the Rail Safety and Standards Board(RSSB)has allowed freight train operators in the UK to safely haul more goods wagons per train than current practices allow,improving their environmental impact and financial efficiency.The research has enabled existing couplers,which connect freight wagons,to safely connect more load although concerns were raised by companies about being fairly compensated for additional load and fuel costs to pull more weight.Initial finished indicate that a 50-mile journey (each way)with 24 wagons could be increased to 27 with environmental savings of 0.25 tonne CO2 and annual financial savings of 291,000.A 235-mile journey(each way)with 14 wagons could be increased to 16 wagons with environmental savings of 1.4 tonne CO2 and annual financial savings worth 245,00090Insurance insight:It is important for insurance underwriters to evaluate the business models of transportation and logistics companies,considering their ability to adapt to evolving market trends,leverage technology,and maintain a competitive edge.Assessing these risks helps underwriters identify potential vulnerabilities,tailor insurance solutions to mitigate business model risks,and support their clients in navigating industry-wide changes effectively.Weve noticed that large companies are shifting their production closer to Europes borders,showing a preference for the Middle East over Asia.Ive identified nearshoring as a clear trend in the logistics industry as a result of the coronavirus pandemic.Board Member,European Rail CargoThis hub(at CVG)is going to let U.S.get packages to customers faster.Thats a big deal.Were going to move Prime from two-day to one-day,and this hub is a big part of that.Jeff Bezos,Founder and CEO,Amazon Publicly available quoteWere acquiring more businesses and moving our own freight intermodally with our own drivers.Director,Global end-to-end Transportation companyQuotes from interviewed transportation and logistics practitioners and industry commentaryOn the move:Rethinking transportation and logistics supply chains 39Supply chain risks in the transportation and logistics industryLabour Labour risks play a significant role in shaping the dynamics of the transportation and logistics industry.Workforce-related challenges such as labour shortages,wage pressures,and regulatory compliance issues can impact operational efficiency and increase costs.The industry heavily relies on a diverse workforce comprising truck drivers,warehouse personnel,and logistics professionals.Factors like driver shortages,high turnover rates,and a lack of skilled workers can disrupt supply chains,lead to delays,and affect service levels.Compliance with labour laws and regulations,including those related to working hours,safety standards,and employee classification,is critical to mitigating legal and reputational risks.The transportation and logistics industry faces particular challenges in attracting and retaining a stable workforce.Sociocultural changes,mobile work nature,and physical working conditions are challenging the appeal of careers in this industry.As businesses adopt new technology and adapt their operations,there is a need to attract and reskill talented individuals.Driver planning has become increasingly crucial in the road haulage business,particularly for expansion and truck-related investments,as driver shortages have reached critical levels in several European countries.The UK,in particular,experienced a significant loss of Eastern European truckers following Brexit,resulting in supply chain delays.This shortage of truckers has become a long-term issue affecting investments Class 1 railroads,for example,in the U.S.have been taking measures such as storing locomotives,reducing rail car numbers,furloughing crews,and laying off support staff in recent years.They have also lengthened trains to cut costs and improve operating margins Labour shortages have affected many of the worlds largest ports,causing them to operate beyond capacity for extended periods.To avoid potential labour disputes that have previously stranded goods on docks or ships,companies and customers redirected cargo away from West Coast ports in the lead up to the expiration of the contract covering 22,000 dockworkers in July 2022.Negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association stalled,leading to sporadic strikes at 29 U.S.West Coast ports91Insurance insight:As labour risks grow,underwriters will likely seek to assess the labour risks of transportation and logistics companies,ensuring they have robust risk management strategies,adequate training programs,and appropriate insurance coverage to address potential liabilities and safeguard against workforce-related disruptions.Theres also a shortage of staff to operate national air traffic and air navigation service systems to increase system capacity.Head of Risk,Global Air transportation company(Fleet)Dealerships also have shortages of labour.Parts availability and costs are also going up.Head of Compliance,Regional Transportation CompanyOur research demonstrates the undeniable fact that low salaries,unattractive or inflexible working conditions and a general lack of respect for these critical jobs is having a catastrophic impact on the ability of employers to fill these roles92.CEO,City&GuildsThe COVID-19 lockdowns put a great many pilots out of work,and many young pilots found other jobs/careers and many senior pilots retired early.Director,Global Aviation&SpaceQuotes from interviewed transportation and logistics practitioners and industry commentaryOn the move:Rethinking transportation and logistics supply chains 40Supply chain risks in the transportation and logistics industryGlobal trade,geopolitics and geoeconomic riskGeopolitical risks have a significant impact on the transportation and logistics industry.Ongoing trade tensions,political instability,and regional conflicts were mentioned as sources of supply chain disruptions,increased transportation costs,and operational uncertainties.Factors such as trade policy changes such as foreign direct investment(FDI),sanctions,terrorism,and natural disasters pose operational challenges to the movement of goods across borders.Additionally,geopolitical events were repeatedly mentioned as sources of regulatory changes,border closures,and delays in customs procedures,further complicating the logistics landscape.Other concerns raised by interviewees included:Fluctuations in global and regional economies,changes in consumer demand,and trade disruptions were also mentioned as drivers of volatile market conditions Economic downturns and the threat of reduced shipping volumes,decreased consumer spending,and tighter profit margins for transportation and logistics companies Currency exchange rate fluctuations,inflationary pressures,and interest rate changes and their impact on operational costs,financing arrangements,and profitabilityInsurance insight:Identifying and assessing geopolitical risks and developing comprehensive mitigation solutions to protect businesses from potential losses caused by geopolitical disruptions in the transportation and logistics sector will become increasingly important in the future.Carrying out a careful assessment of the economic risks faced by clients,considering factors such as market trends,economic indicators,and industry forecasts is increasingly important.By understanding these risks,underwriters would be better positioned to offer tailored insurance solutions that provide financial protection and mitigate the potential adverse effects of economic uncertainties on transportation and logistics businesses.Drivers of many nationalities were caught up in the crisis.As one example,at least 600 Turkish truck drivers were stuck in Ukraine when Black Sea ports were locked.Public Affairs Advisor,Global Transportation UnionBetween 1949 and 2019,88%of sanctions programs worldwide targeted small economies.Today,that figure has flipped:nearly 90%of sanctions designations and export controls target major world economies,especially Russia and China.Director of Political Risk Analytics,WTWRestriction of Russian airspace,means everyone is flying through a narrow corridor.There is an issue of East/West transport.Senior Insurance Manager,major airline operatorQuotes from interviewed transportation and logistics practitionersOn the move:Rethinking transportation and logistics supply chains 41Supply chain risks in the transportation and logistics industryRegulatoryRegulatory risks have a significant impact on the transportation and logistics industry,influencing its operations,compliance requirements,and overall risk landscape.The industry operates in a complex regulatory environment,with regulations spanning areas such as safety,environmental standards,labour practices,trade compliance,and customs regulations.Changes in regulations,including new legislation,trade agreements,or shifts in government policies,can introduce uncertainties and compliance challenges.Non-compliance with these regulations can lead to legal liabilities,financial penalties,and reputational damage.The requirement to comply with a wide variety of different regulatory authorities was mentioned by every company we spoke to.Everything from truck drivers working hours,increasing sustainability evidence,customs and trade data to fuel tax reporting is often managed manually,an expensive task often lacking in time efficiency Specific examples highlighted in our interviews included the recent announcement from the UK government outlining the increased weight limit of Heavy Goods Vehicles(HGVs)to support the transition to alternatively fuelled and zero emission vehicles(ZEVs),which is raising the question of whether an increase in maximum axle weights will be considered to compensate for loss of payload.U.S.based companies were also concerned with similar initiatives and whether they would be compensated for carrying additional loads Other regulatory and compliance concerns include:concern the EU is overly focused on regulation vs China/U.S.,the need for standards to alleviate components and material shortages,growing regulatory costs,and concerns regulators were too slow to act with the industry needing to self-regulate on emerging issuesInsurance insight:Insurance underwriters play a critical role in assessing the regulatory risks faced by transportation and logistics companies,ensuring their clients have appropriate risk management measures,compliance protocols,and insurance coverage in place.By staying updated on regulatory developments and working closely with clients,underwriters can help mitigate regulatory risks and protect businesses from potential adverse consequences.One of the key messages we heard at a recent Transportation forum was that there was too much industry regulation,generally at an additional cost to operators.Transportation industry leader,WTWWe have internal departments taking care of financial capacity of suppliers and their level of compliance related to ESG,on an ongoing basis.LATAM warehousing and port companyBrexit added hidden delays and massive cost to the business.Head of Primary Logistics,international drinks distributorRegulatory issues remain an issue for the transportation and logistics fields.large complex customs claims are common and issues related to sanctions are often problematic.Transportation Risk and Claims expert,WTWQuotes from interviewed transportation and logistics practitionersOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 4243Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industry1.Sustainability Transportation and logistics companies expect sustainability,decarbonisation and ESG to be a major driver and are setting forward looking targets Achieving sustainable transportation will require acceleration of new technologies,regulation,and financial investment at a speed the future risk landscape is being actioned now As well as delivering their own net zero carbon strategies,leading transportation and logistics companies are promoting these efforts to help their customers to also achieve their net zero ambitions “While there is no silver bullet,or one size fits all solution for aircraft manufacturers,airlines and airports to get to net zero within the next 10 years,the time for planning is disappearing.”Charlotte Dubec,ESG Lead Global Aviation&Space,WTWSustainable by designRegulationPower and infrastructure concernsNew technologiesNet zero targetsSustainable fuelsNew routes and shorter routesAs well as the shorter-term risks and drivers facing businesses now,there are four key areas where change is expected to increase over the long term:Figure 13:A forward look at drivers,trends and risks3.Technology The transportation and logistics industry will continue to see increased use of robotics,automation,customer-corporate integration,and digital transformation across the entire value chain The shape and rollout of technological innovations will impact business models,consumer preferences,products,services,and corporate structures Broader and more coordinated utilisation of digital technology in the multimodal transport ecosystem will result in greater efficiency gains,more resilient supply chains,smoother data interchanges,and better safety for delivery mechanisms due to autonomous vehicles The continued growth of e-commerce is reshaping corporate investments and driving M&A aimed at acquiring critical supply chain mapping and modelling companies to gain greater visibility into supply chains for enhanced understanding of risks in Tier 1,2,3 suppliers4.Global trade and consumer demand The rapid growth of online commerce,has led to an increase in demand for faster and more efficient delivery of goods.Transportation and logistics companies are responding to huge demand and shifting global trade patterns Global economic uncertainty may negatively impact crucial infrastructure investment needed in the transportation and logistics industry by slowing growth potential Growing nearshoring initiatives is expected to re-chart global supply chains,with large emerging markets like India,Vietnam,Thailand,Indonesia and Mexico expected to benefit There will be opportunities for transportation and logistics companies to recreate B2C outcomes for B2B commerce.Consumers will demand greater clarity on purchases in-transit and be willing to pay a premium for instant deliveries“By the year 2027,annual consumption in China is expected to reach$8.2trn,or nearly twice what it had been just a decade earlier.In India,annual consumer spending is expected to rise even more dramatically,from about$1.5trn currently to$6trn by 2030.”World Economic Forum“As the use of data collecting devices increasesthe rate of data coming in is far outstripping the rate of processing,with 463qi(1018)bytes(or 463bn GB)of data to be produced daily in 2025.”DHLs Big Data Analytics estimation M&A activitySkills shortage and future jobsSmart tracking Digital firstCompetition and new alliancesReshoring implications 2.Business model The transportation and logistics industry is increasingly focussed on a digital first approach,and building better collaboration and co-operation between different modes of transport Companies of different profiles are also competing and new players are acquiring different parts of the value chain and reducing transport diversity/options this is building resilience in some supply chains and creating new aggregation points in others(e.g.60%of one supply chain is owned by one company)The ongoing talent shortage for drivers/pilots/warehousing staff will be meeting the talent war all sectors will be facing for digitally savvy talent Delivering on Purpose and growing sustainably will be increasingly important as key performance indicators.Attention to this aspect of performance will increase“By 2050,the outbound and inbound ports have become more like airports in the sophistication and speed with which they anticipate,prepare for,handle and dispatch containers.”Jan-Olaf Probst,Business Director Container Ships,DNVMultisourcing and diversificationFuture-proofing supply chains Changing regulationsIncreased consumer personalisationReduced customs clearance timesNew trade relationships and competition,US-China competitionCircular economyIntelligent transportation systems(ITS)Linear vs exponential evolution/adoption of AI Digitised supply chain management Trade-off between data extraction and customer privacyRobotics and automationOmnichannel and Everything as a Service(XaaS)DeliveryESG demands from consumers and key stakeholdersSource:DNV94 WEF95 DHL96 On the move:Rethinking transportation and logistics supply chains 44Supply chain risks in the transportation and logistics industryThe future risk landscape:SustainabilityLooking forwards every mode of transportation and logistics has targets they have set themselves and will need to reach their journey milestones(Figure 14).To reach their ambitious decarbonisation targets,transportation and logistics companies will require considerable resources,innovation and cooperation they will also need the support of insurers in understanding the risks and ensuring risk transfer solutions are available.One example is NextGEN,a joint project between Maritime and Port Authority of Singapore and IMO aiming to develop a collaborative global ecosystem of maritime transport decarbonisation initiatives.There are currently 263 projects involving 974 global partners97.The International Maritime Organisations (IMO)decarbonisation efforts have set a clear course to reducing emissions from the global shipping fleet,focus is shifting to ports and terminals where further action is needed.Early plans in Europe and on the U.S.West Coast suggest billions will have to be spent just to electrify some of the main maritime centres;seen from a global perspective,that signals a significant escalation of financial and business risks across the ports and terminals sector.The European Commission estimates the cost of building the alternative fuels infrastructure(from 2025-2050)at 9.9bn;2.5bn for hydrogen infrastructure and 7.4bn for offshore power supplies(OPS)98.Ports and terminals operators at the maritime complex in San Pedro Bay have been tasked with reducing to zero(by 2030)emissions from their cargo-handling equipment,in line with the 2017 Clean Air Action Plan(CAAP).To date,$2bn has been spent on cleaner trucks,cargo-handling equipment and initiatives such as OPS,but the ports estimate that the full bill for new technologies,infrastructure and incentive programmes for CAAP strategies could reach$14bn99.Figure 14:Examples of industry commitmentsSea:The IMO Strategy on the Reduction of Greenhouse Gas Emissions from Ships sets an ambitious goal to reduce GHG emissions from shipping to achieve net zero by 2050;reduce the carbon intensity of international shipping by at least 20%by 2030 and at least 70%by 2040;and work towards phasing out GHG emissions from ships entirely.Medium term measures of the strategy centre on an economics-based element as well as a technical element,including a universal fuel standard which redues the carbon intensity of the industry.U.S.rail:The Federal Railroad Administration is urging the railroads and rail equipment manufacturers to achieve net-zero greenhouse gas emissions by 2050,according to its new Climate Challenge initiative.Road:International Road Transport Unions Green Compact is a collective aggreement by the road transport sector to reachnet-zero carbon emissions by 2050.To do so,the industry needs to pursue several avenues which are already available but not sufficiently leveraged.A significant uptake ofalternatively fuelled vehicles requires a recharging and refuelling infrastructurethat is not yet in place.Air:In 2021 a resolution was passed by IATA member airlines committing them to achieving net-zero carbon emissions from their operations by 2050.This pledge brings air transport in line with the objectives of the Paris Agreement to limit global warming to well below 2C.Source:IMO100 101,IRU102,FRA103,IATA104On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 4546Supply chain risks in the transportation and logistics industrySupply chain risks in the transportation and logistics industryEvery industry is seeing an increased focus on environmental regulations and reporting frameworks,with specific requirements for the transportation and logistics industry that will continue to drive action (see Figure 15).Figure 15:Industry and multimodal sustainability frameworks and reporting initiativesSource:Various105Task Force on Climate-Related Financial Disclosures(TCFD)For climate-related disclosures,Transportation companies had an average disclosure level of 32%,followed by the Technology&Media industry at 15%.For their Risks and Opportunities,Transportation companies(54%up from 34%in 2019)fared better than Technology&Media(31%),with Food&Beverage companies leading the three industries(61%).The same pattern applies for TCFDs Climate-Related Metrics,Scope 1,2,3 GHG Emissions,and Climate-Related TargetsThe Science Based Targets Initiative(SBTi).SBTi seeks to incentivise as much climate finance as possible from the private sector by scaling up near-term climate finance to achieve net-zero by 2050,and provides companies with clearly-defined,science-based avenues for companies and financial institutions to verifiably reduce their overall GHG emissions in line with the Paris Agreement goals.5,075 companies have SBTi commitments,including 210 transportation and logistics companies,with 108 of those meeting their approved targets:Air Freight Transportation&Logistics:56 total companies and 30 companies with approved targets;Highways and Rail tracks:21/9;Railroads Transportation:41/23;Trucking Transportation:73/36;Ports and Services:7/3;Water Transportation:12/7Carbon Disclosure Project(CDP)CDP is working with transportation companies to catalyse action towards a sustainable and net-zero world,and ranks 18 of the largest publicly listed shipping companies,with three key areas-transition risks,transition opportunities,and climate governance and strategy -appraised with recommendations from the TCFD.In 2022,the CDP assessed that 41%of disclosing companies reported emissions for one or more Scope 3 categories,despite those emissions being 11.4 times higher than operational emissions.For upstream transportation&distribution,28%of companies had calculated their Scope 3 emissions-and less than 1%of disclosing companies have articulated SBTi-validated net-zero targetsSustainability Accounting Standards Board(SASB,now IFRS Foundation)SASB are supporting transportation and logistics companies through industry-based sustainability disclosures about risks and opportunities.SASBs Industry Briefs of the Transportation sector are broken down into Air Freight&Logistics,Marine Transportation,Rail Transportation,and Rail Transportation.Appendix III of each Industry Brief lays out the Sustainability Accounting Metrics for each subsectors Topic,Accounting Metric,Category,Unit of Measure,and Code.Looking forwards,the IFRS Foundations International Sustainability Standards Board(ISSB)is encouraging companies and investors to continue to use SASB Standards until they are replaced by IFRS Sustainability Disclosure BoardsUNCTAD Framework for Sustainable Freight Transport Framework(UNCTAD SFT Framework)The UNCTAD SFT Framework sets out six steps(diagnosis,visioning,targets,implementation,partnerships and programmes,monitoring and evaluation)to build and strengthen the knowledge,skills,and capacity of relevant freight transport stakeholders interested in advancing a sustainable freight transport agenda.As freight transport makes up between 8 and 11%of global GHG emissions,main tools of the Framework revolve around self-assessment questionnaires,an extensive key performance indicators(KPIs)list,and a catalogue containing over 300 Sustainable Freight Transport Measures(such as Californias Sustainable Freight Action Plan aiming to deploy over 100,000 zero emissions freight vehicles,powered by renewable energy by 2030)Global Logistics Emissions Council(GLEC)Since its inception in 2014,the principal aim of GLEC has been to develop a universal method for caclulating logistics emissions across,road,rail,sea,inland waterways,and transhipment centres.The GLEC framework is designed to work in conjunction with the GHG Protocol and the CDP-and with the new publication of ISO 14083 in March 2023 -GHG emissions tracking and reduction will result in clearly defined standards and procedures for precise measurement of distances,fossil fuel consumption by vehicle type,and the provision of guidelines for more robust and stringent calculations in an effort to reduce overall GHG emissions.Key partners in the transportation and logistics industry include DHL,Maersk,Hapag-Lloyd,and Kuehne NagelOn the move:Rethinking transportation and logistics supply chains 47Supply chain risks in the transportation and logistics industryThe future risk landscape:Business modelBusiness models are facing two key drivers for change,changes in industry partnerships/the impacts of new players,and the impacts of sustainability in the way they operate.Effective partnerships are the cornerstone of the transportation and logistics industry and over the last 25 years,for example the top 20 marine carriers have almost doubled their market share from 48%to 91%.Operational cooperation between container shipping companies comes in many forms ranging from slot-chartering and vessel-sharing agreements to multi-trade strategic alliances.In early 2023,three alliances were operational globally:2M(Mediterranean Shipping Co.,Maersk),Ocean Alliance(CMA CGM Group,COSCO Group,Evergreen Line),and THE Alliance(Hapag-Lloyd,ONE,Hyundai Merchant Marine,Yang Ming Marine Transport Co.).However,in late January 2023,MSC and Maersk announced they have mutually agreed to discontinue the 2M alliance,set to end in January 2025 and could trigger the start of an industry-wide re-shaping of existing operational agreements,especially on the major East-West trading routes.As well as shifting partnerships,many of the companies along the value chain are changing in composition.Some of the worlds largest retail companies are continuing efforts to secure their own supply chains by acquiring different journey stages and capabilities.
2024-10-22
46页
5星级
On the move:Rethinking transportation and logistics supply chainsPart 1:Executive summary 01Executiv.
2024-10-22
10页
5星级
Part 3:Insurance innovation opportunitiesOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 02ContentsIntroduction and key findings 03Supply chain insurance awareness and product innovation opportunities in the transportation and logistics industry 06Current state of the market for transportation and logistics 09Where do transportation and logistics companies indicate they would like support?11Existing solutions that keep transportation and logistics company supply chains on the move 14Data standards and industry engagement opportunities 35Conclusions 37References 41Key:Client quotes Insurance case studies Acceleration opportunity with industry partners General sector insightsIntroduction and key findings Introduction and key findingsOn the move:Rethinking transportation and logistics supply chains 04Introduction and key findingsOn the move:Rethinking transportation and logistics supply chainsIntroduction and key findings In March 2023,Lloyds and WTW published a joint report“Loose connections:rethinking semiconductor supply chains”,the second in a series of three reports exploring supply chain risk.The report examined the semiconductor sectors risk challenges and aimed to spark product innovation through outlining the opportunities to develop new supply chain solutions.Our final report in the series explores the transportation and logistics industry and its response to supply chain risks as the key mover of the worlds goods.As highlighted in section two of this report,the research shows that while there is a range of risk maturity,all transportation and logistics companies take risk very seriously given the impacts of disruption on their ability to keep goods on the move.There is also clear understanding of forward-looking trends and growing complexity as companies acquire different modes to gain greater control over delivery and in turn inherit their risk landscape and regulatory responsibilities.There were varying levels of understanding of supplier resilience,ranging from high level information only to progressive part sharing warehouses with competitors to pool resources.The third and final part of this report,Insurance innovation opportunities,aims to provide the insurance industry with a greater understanding of customer needs,protection gaps and potential insurance solutions for transportation and logistics supply chain risks.Over 120 transportation and logistics business have been surveyed and interviewed for their insights The insurance industry has an opportunity to deepen its long partnership with an industry proactively challenging its supply chain risks to enable global resilienceBuilding on the findings of our first two reports,we see significant scope for increased collaboration between the transportation and logistics industry and their insurers to consider product development.Importantly,many insurance solutions already exist that transportation and logistics companies are currently unaware of,highlighting a clear opportunity to better communicate the existing supply chain insurance proposition to customers.There are also several areas highlighted by transportation and logistics businesses that represent opportunities for insurers to innovate and grow alongside their clients.This part of the report focuses on exploring these innovation opportunities.On the move:Rethinking transportation and logistics supply chains 05Introduction and key findings Key findings include:The transportation and logistics industry deal with supply chain risks every day.There was a range of risk maturity seen across the companies we spoke with some very advanced in their journeys and others knowing they need to catch up.Interestingly the majority of conversations started with“Im not an expert on supply chain”and yet these same companies demonstrated deep understanding of their risks.Companies are increasingly realising that supply chains create a competitive advantage and shouldnt be seen as simply opportunities to reduce costs.There is also recognition they can always do more,and transportation and logistics businesses are interested in exploring where they can work with insurers both on products and risk management There is room for expert,data driven dialogue between the transportation and logistics industrys technical stakeholders and the insurance market to ensure more effective knowledge transfer that can support innovation and transportation and logistics companies desires to purchase solutions that better meet their needs.Importantly,solutions already exist for supply risks that transportation and logistics companies were not aware off,but also clear gaps where insurers could look to innovate Enhancing supply chain data is the biggest opportunity for progress and risk and insurance related innovation,with more information available than ever before to build a view on supply chains,model scenarios,and consider building new insurance solutions.This is where partnerships with third party providers responding to operational efficiencies and market tools and services,such as risk management and supply chain diagnostic tools,can support translation and transmission therefore accelerating the opportunities for insurers to innovate.Section 3 of this report series also outlines areas where new data is being surfaced and created by industry associations and regulators,where standards are being shaped,and examples of where governments are investing in transportation infrastructure to support national and global resilienceSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry Supply chain insurance awareness and product innovation opportunities in the transportation and logistics industryOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry07On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry The global logistics insurance market alone is predicted to hit$70.5bn by 2030,expanding at a compound annual growth rate of 2.8tween 2023 and 20301.To move forwards in supporting the transportation and logistics industry in transferring their risks,it is important to understand the current state of supply chain insurance for the industry and the challenges that have prevented further progress(see Box 1).Across our interviews with transportation and logistics companies there was a range of knowledge of the insurance covers available for industry supply chain specific risks with some companies very familiar with insurance solutions that would meet their needs and others describing perceived gaps where solutions already exist.This has been a common feature across the topic of supply chain it means different things to every company,and there is a need for all insurers and brokers to reopen conversations specifically on supply chain risks.All transportation and logistics companies agreed that insurance had an important role to play in helping the sector respond to and manage their risks.In the WTW Global Supply Chain Survey,92%of transportation and logistics companies said that insurance for supply chain risks was either mission critical or necessary,and 60%shared they felt supply chain risks were covered by specific supply chain insurance.However,this figure was only 17%for business interruption(BI)insurance with 57%sharing they felt they had no specific BI insurance but the risks were covered by other insurance.As well as building greater awareness of solutions there is a clear need for insurers and insureds to clarify what is and isnt covered for supply chain risks,losses and consequences.This is where business interruption reviews and specific supply chain risk assessments will be key cornerstones to establishing clarity.This is critical,as in the next 3-5 years,77%said a lack of insurance solutions was among the greatest challenges to addressing their risks and represents a clear signal to the insurance industry that they are a willing industry looking to explore new solutions to meet future challenges with risk transfer.What level of priority does your organisation give to insurance for supply chain risks?Mission critical;its must-have cover 49%Some cover is necessary 43%Cover is good to have,but not essential 5%Would not buy specific cover 3%Figure 1:WTW Global Supply Chain Survey 2023 transportation and logistics companiesOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry08Transportation and logistics insurance approach Covered by specific insurance No specific insurance.Risk covered by other insurance No specific insurance.Not sure if covered by other insurance No specific insurance.Risk not covered by other insurance Not applicableSupply chainCyberDirectors and officersEnvironmentalPublic liabilityReputationErrors and omissionsTerrorismBusiness interruption0 5%5S6Q6%39%1%3%1%2%2%1%190&0G%1F#%4d%6%4W!%What are the three greatest challenges to addressing your risks over the next 3 to 5 years?00p P%Lack of access to insurance and risk transfer solutions77%Lack of data,knowledge and understanding of these risksLack of internal risk management tools and insight77X%Lack of budget52%Lack of board buy-in36%Source:WTW Global Supply Chain Survey 2023,transportation and logistics companies2The transportation and logistics industry are very aware of their supply chain risks and deal with them on an ongoing operational basis.While risk maturity varied at the more strategic level,every company is working on multiple solutions to track,monitor,and surface additional data that will allow them to respond to delays and interruptions.There is a strong interest in working with insurers,with one company commenting:We dont want the$200m dollar limit,we want their knowledge and risk understanding.For many companies,the knowledge insurers hold on risk-based thinking is as valuable as the risk transfer solution.On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry10Supply chain insurance awareness and product innovation opportunities in the transportation and logistics industry09Current state of the market for transportation and logistics Box 1:Current state of the supply chain insurance for the transportation and logistics industrySeveral products exist in the global insurance market affording some cover for supply chain risks,including business interruption(BI),with suppliers extensions typically included by endorsement to provide contingent business interruption(CBI)cover,and extending to other policies such as political violence,marine cargo(including Stock Throughput),or cyber can also be purchased to address specific supply chain risks.Within the food and drink industry report it was suggested supply chain risks could be covered under an end-to-end policy given greater sharing of information,and in comparison,the transportation and logistics industry is even broader.Transportation and logistics supply chains revolve around key routes and large aggregations in the case of large containerships and ports,so insurers are mindful of accumulations and their risk appetites when considering supply chain cover for these key suppliers.In the marine industry alone the combined value of the global merchant fleet increased 26%to$1.2trn in 2021,while the average value of container shipments has also been rising with more high-value goods such as electronics and pharmaceuticals.It is not unusual to see one container valued at$50m or more for high-value pharmaceuticals3.The supply chain goes beyond Tier 2 and 3 suppliers which are not always fully known to those in the process but an area where insurers are exposed and where more focus is required to enable insurers to underwrite and provide the policy coverage required where exclusions(such as the exclusions in respect of delay)are limited and at a premium that remains affordable margins within the supply chain are limited.Looking forwards,the threat of global sanctions,ESG,inflationary costs,reputational risks and continued supply chain disruptions are all key considerations for insurers.As a result unspecified suppliers limits have been slowly reducing,and currently normal levels are typically around about 5m.Any supplier limit in excess of that would require a bespoke conversation between insurer and insured;however,many markets are prepared to provide limits,with this decision typically driven by robust business resilience arrangements.Insurers are keen to understand how the clients business actually works,what plans are in place to protect it,and how they can support(and ultimately reduce their exposure)with risk management,broker intervention,or insurance products.Some insurers are now looking to survey key suppliers in order to maintain a level of cover previously provided,with the demand for information around primary and secondary suppliers intensifying as a result of significant losses.When conducting BI reviews,increasing scrutiny is being placed on supply chain resilience with particular attention paid to extending indemnity periods.Where insurers want to see Construction Occupancy Protection Exposure(COPE)information and this results in additional requirements(i.e.fire detection,sprinkler systems)the company is not always able to meet demands due to landlord and/or CAPEX restrictions.Companies must work with their broker and insurer to agree other methods(warehouse location,layout,activities)that could reduce risk to ensure coverage.A partnership between insurers and brokers and their mutual clients can facilitate clear information sharing.This can provide a greater understanding of the clients business and needs and can help to ensure values are declared and replacement costs calculated,with added costs accounted for,like labour,property costs)and inflation to provide an insurance solution that the client needs at a competitive and sustainable premium.Additionally,the availability of new locations and/or replacement machinery/equipment lead in times must be considered.All parties need a common understanding of risk,exposure and coverage needs.Barriers and opportunities This research identifies several key barriers to solve that could help to address current protection gaps in transportation and logistics supply chains:There is a diverse range of supply chain risk maturity across the transport and logistics industry,with leaders taking a more strategic approach while others focus on operational aspects.However,all companies are working on digitalisation of their operations and have a strong desire to do more to manage their risks.Insurers are seen as key sources of information and transportation and logistics companies would like to work with them in turn they hold a wealth of insights that can support risk understanding Awareness of insurance solutions varied across the industry,with many companies describing supply chain gaps where products already exist.Having an insurance-based conversation on supply chain as part of our interviews allowed new areas of interest to surface and this represents a key opportunity Following on this theme,awareness of Alternative Risk Transfer(ART)solutions ranges across the industry transportation modes.They are still relatively new to the market and depend on several data factors which can be difficult to articulate or quantify.In addition,where ART solutions are structured,the cost may be prohibitive for customers with one airline highlighting a lack of perceived value for the expense.However,gaps were described where solutions are being structured and could be supported by various industry data gathering initiatives Similar to the semiconductor industry,the transportation and logistics companies we spoke with feel that an end-to-end supply chain solution doesnt exist or is seen as too difficult to procure although they also highlighted the value of other standard insurance coverage they purchase.At the same time,risk mature transportation and logistics companies mirrored semiconductor company commentary around a lack of understanding of the extensive supply chain risk management practices undertaken by businesses in the sector and felt that insurers have been slow to the needs of the sector and its robust management In many instances,insurance solutions are already available but not fully understood or valued by customers.Building on this,when asked to provide the type of coverage,gap fillers or extensions that transportation and logistics companies typically seek,insurers often ask for significant volumes of information to enable a full consideration of their risk appetite and availability of capacity.As seen across the other industries explored in this series,a factor behind this appears to stem from legacy concerns around historic supply chain losses.A thorough assessment of existing pre-conceptions is therefore important to enable progress around supply chain insurance To help ensure they are able to receive the cover they are seeking,companies should work with their insurers to understand their business and associated risks,and any risk mitigation activities undertaken such as business interruptions reviews,supply chain mapping beyond Tier 2,and risk consultancy.These activities and the subsequent discussions with insurers can be fully supported by their brokers.Indeed,there is already expectation from clients that their brokers and insurers need to work together more closely to support mutual clients needs and reduce doubt when claims occur.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry11Where do transportation and logistics companies indicate they would like support?The transportation and logistics companies we spoke with recognise supply chain visibility and understanding is an issue,but also want greater support from the insurance market to fill some of the gaps they see in the existing coverage and at a premium that is sustainable.One key comment centred around the fact that insurers often break risks down into lines of business and individual products,which can result in gaps in their coverage.This raises a question for insurers around the way they face off to clients increasingly complex businesses.Digital platforms could potentially offer an opportunity to assess a company in its totality and offer a holistic response.In the short term,there is clear interest from businesses in the sector in risk transfer products that can meet the challenges that stretch beyond the capacity of their own risk management,a strong desire to work with insurers on risk management,and brokers on being the link translator between them and insurers.There is an opportunity for the industry to develop new defined solutions and end-to-end supply chain insurance solutions specific to the transportation and logistics industry to give businesses more confidence in navigating the uncertain landscape.One of the more readily apparent opportunities could be an A to B Stock Throughput solution.While Stock Throughput policies do exist,the complexity of the supply chain denies the ability of a sole insurer to provide the A to B solution companies may require.There is deep expertise in the market that can be used to increase knowledge and support innovation,and there is clear interest from transportation and logistics businesses in solutions that meet their needs.On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industrySupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry1213Scale of innovation required for each riskLeastMostWording improvements,further specified coverSupply chain insuranceNew technologyOpportunity for insurers to produce specific wordings that cover supply chain risks.Examples mentioned included:Cyber:this was also an area raised by semiconductor companies,with an opportunity to develop specific supply chain cyber wording relating to interdependencies and to introduce common ransomware definitions,including menu of coverage options.Mature companies also highlighted the desire for a cyber coverage for their contractual liabilities Denial of access:opportunity to clarify wording around access denial restrictions to reflect supply chain considerations e.g.transport access to manage what happens in the event of denial of access,with examples of being able to remove PPE from a warehouse during COVID-19 Stock throughput:opportunity to create transport and logistics industry wording into stock throughput and property policies to reduce grey areas whilst goods are in transit and storageTransportation and logistics companies would like a mainstream,global supply chain product or A-Z journey policy.Currently there is no single solution,although stock throughput solutions could form the foundation point to review supply chain risks and expand coverage.Further specific areas where gaps were highlighted along the transportation chain included:Looking forwards,detailed understanding of changing risks profiles will be needed to understand a series of new technologies:autonomous vehicle risks,electric vehicle(EV)charging points as a potential handoff point between stakeholders,and intellectual property risks as more data and IP is created from digitalisation and automation.This will require a combination of risk management and insurance.Tier 2 and below suppliersMode changeBusiness interruption innovationAs with food and drink and semiconductor companies,transportation and logistics companies highlighted existing gaps around Tier 2 suppliers and below.There remains unknown risks for these suppliers,with need to be assessed and managed to provide comfort to insurers.Partnerships with technology providers could help to solve this challenge by bringing greater visibility to the supply chain.Specific to transportation and logistics companies,the potential gaps in coverage when cargo enters or exits different modes in the supply chain were highlighted as opportunity areas for insurance innovation.For example,when cargo is being loaded or unloaded from trucks or when trucks are entering or leaving facilities,and when cargo stops in transit from warehouse to warehouse.As digitalisation advances the ability to electronically ringfence where accident occurs/where goods are will grow.Greater visibility of risk across insurance policies through e-broking solutions could also reduce grey areas.As seen with food and drink companies,a number of transportation and logistics companies we spoke with mentioned decisions to not pursue business interruption cover,as the source of interruption was felt to be too remote for insurance cover and there was a high burden of time and information required.There is a desire from customers for insurers and brokers to work together to simplify questions and innovate product offerings,including non contingent BI cover.Trade disruption insurance for freight forwardersPublic private partnerships and pooling for route blockagesWithin the industry,freight forwarders we spoke with raised“there is no one trade disruption insurance policy specifically designed for freight forwarding risks/trade”.This is a gap insurers may want to explore alongside data partnerships through the Lloyds Lab and other market incubation centres.The blockage of the Suez Canal and the need for a clearly needed predetermined plan of action in the event of similar events in future was mentioned by many interviewed during the research.There are already a number of successful public-private partnerships,at both a country and regional level,seeking to improve societal resilience to climate shocks and offering innovative mechanisms to transfer more of the peak risks to the re/insurance and capital markets these could serve as a model for supply chain risks.Total cost of risk understanding to provide balance sheet protectionAs heard with semiconductor companies,mature transportation and logistics companies would welcome the opportunity to explore solutions with insurers and wider capital markets.Having the ability to smooth balance sheet drains would be highly valued,with concerns around business resilience mentioned if an event happened at a weak time of year.This is where insurers and brokers can work together to support total cost of risk analysis to help companies assess their appetite,ability to retain risk,and estimate the most efficient use of capital to manage supply chain shock events.The following risks faced by the business in the transportation and logistics industry are currently not fully addressed by the insurance industry,and could represent a development opportunity for the insurance industry:On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industrySupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry1415Existing solutions that keep transportation and logistics company supply chains on the moveLloyds has a unique position and opportunity to bring together communities,businesses,insurers and governments to find solutions to the systemic risks that threaten our shared future.A number of solutions already exist in the Lloyds market and broader insurance industry that help to meet transportation and logistics supply chain risks.Data-driven freight protection with LoadsureFreight booking is increasingly digitized,post-pandemic-more than 63%of global freight is now booked via digital workflows and yet Loadsure estimate that more than 60%of freight in transit is under or uninsured,owing to traditional insurance processes being unable to profitably serve supply chain SMEs.Loadsure identified a gap to leverage industry data and industry-leading tech to seamlessly integrate insurance into everyday supply chain processes,ensuring freight-and ultimately,balance sheet-protection.Loadsure is a UK-based InsurTech MGA and Lloyds coverholder that offers data-powered,AI priced risk management to the freight community.This is achieved by integrating Loadsure insurance intermediary workflows(through a white-label portal)or into any transportation platform,from Transportation Management Systems(TMS)and load boards to freight marketplaces and booking systems.Established in 2018 by a number of industry experts in the transportation and insurance market,Loadsure uses machine learning,historic and real-time customer data to accurately underwrite risk and deliver dynamic pricing.A premium can be generated based on a specific shipment on a specific day for a specific transit in under a minute,which levels the playing field in terms of access to quality cover for organisations of all sizes something SMEs were struggling to access.“We used decades of industry data to build the foundations of our model.Now as data continues to flood in we leverage it to inform our rating model,running real-time adjustment to optimise accuracy and make freight insurance sustainably profitable for the first time.High-resolution data is the key to accurately pricing any risk.”Johnny McCord CEO and Founder,LoadsureRisk mitigation is at the core of Loadsure-as long as there is risk,insurance is an essential balance sheet protector.Loadsures data-driven approach enables much more;bringing“holistic freight protection”to the supply chain.Clients have access to valuable dashboards that give insights on where they are struggling and areas to improve enabling them to make informed business decisions that reduce the risk of losses occurring in the first place.Loadsure is developing its technology at rapid pace and will soon offer loss run reports,where brokers will be able to review account performance 60 days in advance of a renewal,enter exposure data,generate custom quotes tied to account-specific performance,and bind coverage in seconds.Loadsure will also provide customers with direct portal access,so certificates,policy documents and claims are available.BrokersFreightThames:On demand cargo insurance that supports per-shipment quotes and is targeted at meeting the product gaps of owners,distributors of goods,freight brokers,NVOCCs1,freight boards,manufacturers,logistics providers,freight forwarders,and shippersOrinoco:Shippers interest insurance with limits of up to$2m streamlines time-consuming policies and is targeted at meeting the product gaps of freight forwarders,NVOCCs,logistics companies,shippers and freight boards Danube:enables insurers to generate instant ocean cargo insurance quotes for their small to mid-size enterprise customers,including:manufacturers,retailers,distributors and wholesalersHuron:is an add-on product for ocean cargo and stock throughput insurance that offers coverages of up to$10m per locations and for goods in transit and is targeted at meeting the product gap needs of small to mid-size enterprise customers,including:manufacturers,retailers,distributors and wholesalers1 Non-Vessel Operating Common CarrierOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry16Risk insights as a bridge across insured and insurer from ClearConnect SolutionsTransportation company leaders are faced with a myriad of challenges,not the least of which is managing all aspects of insurance and regulatory compliance.Scott Grandys,Co-founder and President at ClearConnect Solutions had a long history in the transportation,freight,and final mile industries and witnessed first-hand an inevitable lack of transparency in the transportation insurance space“when underwriters in the U.S.have been tasked with assessing risk,the process is often lengthy,muddled,and overtly manual in a digital world”.Through its proprietary technology,ClearTrac,Grandys aims to give stakeholders in the transportation and insurance industries a real-time view into the risk associated with drivers and fleets out on the road.For fleet owners this includes risk and compliance monitoring by integrating data across:monitoring services,telematics,and regulatory data surrounding safety management systems,inspections,crash and fitness performance.These data points can be used to manage initial and ongoing risk mitigation strategies.After taking part in cohort 8 in the Lloyds Lab,ClearConnect Solutions is continuing to build out services to allow the transportation insurance market to recalibrate the risk scoring process giving all stakeholders the ability to monitor risk with quality data in real-time against the underwriting requirements throughout the term of coverage.In April 2023,ClearConnect Solutions announced a partnership with TruckSpy to combine its risk management and compliance technologies with TruckSpys driver dash cam.Together,their solutions will make a real impact on the safety of your fleet.Federal Motor Carrier Safety Administration estimate the average cost of a commercial truck accident(with one person who is injured)to be$148,2794.By capturing positive and negative driving events through the dash cam and sending audible safety alerts to drivers in real-time,there are immediate risk mitigation actions and fleet owners and safety managers are able to leverage the insights into their safety programs.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry17Simplifying insurance quotation with eCargo,TravelersTravelers eTrade Cargo Insurance has been designed to meet the needs of UK domiciled groups who trade or ship goods internationally and domestically by streamlining the quotation process.eCargo is an evolution of Travelers traditional cargo placements designed to start conversations with a reduced online question set,cutting back on labour-intensive paperwork,as documentation is issued at the point of quote and immediately upon receipt of hold covered instructions.eTrade Cargo policies can also be bespoke if needed,with clients able to tailor their cover to suit their particular needs including facultative,annual and stock throughput risks and is targeted at meeting the product gaps of:importers,exporters,manufacturers,retailers,wholesalers,suppliers,sporting associations/teams,media and entertainment industries.Stephen Smyth,managing senior underwriter at Travelers Europe estimated that“62%of requests can be quoted directly,saving time and allowing bespoke conversations with clients where more information is needed to evaluate and bind a risk”.This might also include conversations offering risk mitigation advice where in one case an insured was advised in ways to package and label their complex machinery to prevent the risk of forklifts being used in places that likely would have resulted in it tipping over.Cover is designed for businesses who import,export,retail or wholesale goods to protect their goods from loss or damage to a consignment during transit while being carried by land,sea or air.Coverage includes:Up to 5m with a minimum level of cover of 1m per any one conveyance,providing clients with peace of mind Cover for“All Risks”perils,such as fire,theft,sinking,washing overboard and road traffic accident The following covers can also be selected if required:Exhibition and Demonstration Risks Engineers Tools,Stock,Equipment and Salesman Samples Ability to add stock throughput coverageOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry18Building on deep industry expertise,Beazley CargoThe global logistics market has been affected in various ways in recent years,from disruption to supply chains to the challenge of meeting the growing consumer demands of online shopping and home delivery.Through their marine insurance Beazley have been responding to understand and meet the numerous challenges faced by the industry.This includes insurance,advice,risk management,underwriting and claims expertise that the maritime industry needs as it adapts to the rapidly changing geopolitical landscape.Examples across transportation and logistics includes:Ports and Terminals Liability:Protection for companies involved in the carriage,handling or storage of cargo against legal liabilities arising out of the conduct of their business,shore-side operations for the handling and storage of cargo up to$50m.Cover will normally include:liabilities for loss or damage to cargo;vessel and equipment liability;removal of wreck and pollution;errors and omissions;fines and penalties;third party liability;loss or damage to owned equipment;real property;legal and defence costs;and business interruption Transport&Logistics Operator insurance:protects companies involved in the movement of cargo against legal liabilities arising out of the conduct of their business.Cover will normally include:loss or damage to cargo;errors and omissions,third party liabilities;fines,penalties and duty;general average and salvage guarantees and contributions;on-forwarding costs;consequential losses;pollution;legal costs and defence expenses;up to$20m Cargo insurance:general cargoes and specie from both London and Singapore,offering protection for goods while in transit(by land,sea or air)and in store during the ordinary course of transit or long-term storage.Coverage and losses are subject to the terms and conditions of the actual policy up to$75m,for a wide range of general cargoes with emphasis on oil,general commodities and general machineryAlongside this Beazley also works with dedicated in-house marine engineers to advise and respond to events as they unfold:“On hearing that a clients vessel was listing we immediately deployed our in-house marine engineers to assist.With the support and technical guidance of our engineer the vessel was stabilised(she had been listing heavily from a grounding and was close to being a total loss)and the cargo on board was saved from further damage.Towage was organised whichallowed the vessel to successfully reach her destination.With the benefit of having our engineer on the ground for more than 16 days,Beazleys claims managers were able to directly understand the clients needs,resulting in prompt payments of funds.”Tim Garrett Head of Cargo&Specie Looking forwards,moving to new technologies will undoubtedly bring significant opportunities but will also present new risks.During the fuel transition phase and in the exposure the industry is increasingly facing to cyber attack,the need for risk management and mitigation will become increasingly important.Whilst the current economic and geopolitical uncertainties create pressures that need constant vigilance and adaptability.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry19Responding to gaps with Chaucer CyberLink Marine ConsortiumCyber is one of the most complex and critical risks threatening national security and businesses today.Tackling this ever-evolving threat requires continued action and collaboration.In 2018,Chaucer collaborated with the Lloyds market to clarify and better cover the gap from silent cyber.In 2019,Chaucer launched the CyberLink Marine Consortium provides marine businesses with coverage for up to$60m for their cyber risks,including physical damage costs to their vessels caused by a cyber-attack.The impact of cyber events on transportation and logistics companies can have knock-on consequences along the supply chain:“A ransomware event impacted a third party partner responsible for conveyance of goods.The lack of basic business function led to a significant period of darkness in terms of the current state and whereabouts of cargo”Alex Stubbs,Deputy Class Underwriter,ChaucerAlongside the policy,post-binder risk services include a cyber security risk assessment with a third-party services company to highlight risk understanding,support resources prioritisation and investment,and provide a view on peer benchmarking.Following a security compromise or cyber-attack,CyberLink also responds with:Risk management services,to understand gaps in the cyber defences and how best to prepare the Insured against the current cyber threats Physical Damage cover,to repair vessels and assets on board following a cyber-attack Data breach and Incident Response,providing sector specific cyber specialists,to investigate and control the cyber-attack Business interruption,with coverage extending to key service providers,CyberLink provides indemnity when a cyber event halts the business or a business dependent party First and Third Party Legal and Professional Services,to navigate relevant legal or regulatory frameworks,including expenses to notify any affected or potentially affected third parties Social Engineering,coverage to protect the Insured when employees are targeted,leading to unlawful access to systems and transfer of money Cyber Extortion cover,quick response and coverage when a ransomware event drives business to a haltFurther coverages include;system failure,reputation management,media liabilities,PCI DSS and digital asset restoration.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry20Meeting ship owner,ports and terminals needs with WTW CyNavCyNav is a cyber solution specifically designed by WTW cyber and marine experts to provide a tailored cyber cover for shipowners and ports and terminals.It addresses the growing need for an explicit marine cyber solution.This means,insureds do not need to resort to pre-existing cyber products,which may be too generic for their specific requirements.Shipowners are increasingly reliant on technology for all aspects of a vessels operation and their shore-side activities and ports and terminals are increasingly dependent on technology across all aspects of their operations.This dependency can leave ports and terminals exposed to financial loss should that technology become unavailable,whether due to malfunctions,human error or cyber-attacks.As inter-connectivity of that technology increases,cyber security has become a concern.The data protection and cyber security regulatory landscapes affecting shipowners are developing at pace.The shipping industry is therefore under greater obligation to comply with regulations or suffer potential financial consequences.As the financial impact of cyber incidents continues to increase,and the silent cyber cover in traditional marine cover is being reduced,CyNavs clear and affirmative cyber solution is designed to plug any cyber gaps left behind.CyNav for ship owners provides cover for:Loss of income due to business interruption (including any interruption to third-party IT service providers)Crisis management expenses(including IT forensics,legal and PR fees)Hull and machinery damage Loss of hire due to hull and machinery damage Loss of hire due to vessel detainment CyNav for Ports and Terminals provides cover for:Business interruption loss Business interruption loss due to IT supply chain vulnerabilities Property damage Crisis management expenses Property damage liability Wrongful delivery of cargo Regulatory actions(where insurable)There is also interest from customers in Alternative Risk Transfer(ART)solutions,including parametric products,which offer an opportunity to design bespoke solutions for businesses supply chain risks,subject to a relevant,reliable and impartial index.In the food and drink industry report we covered Parsyl who have been innovating in cold chain cargo policies to offer insurance alongside accessible and shareable insights across all modes of transit and storage improves accountability with customers and partners.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry21Innovation cold storage with Parsyl Parsyl is the only combined cargo insurance and supply chain monitoring solution on the market,leveraging granular supply chain data to deliver more comprehensive insurance coverage.In April 2023,Parsyl launched the Essential Consortium led by Parsyl Syndicate 17966,the first mission-driven syndicate created in Lloyds 330-year history.Essential is the first cargo consortium focused specifically on essential goods,including the foods we eat and the medicines we need.Essential also serves as supporting capacity for the Global Health Risk Facility(GHRF),an alliance of insurance and technology partners providing cost effective insurance coverage and risk mitigation solutions for vaccines and global health commodities across the globe.Parsyls insurance solutions include ColdCover,GHRF,Syndicate 1796 and Essential.Coverages are designed to meet gaps across a range of cargo and supply chain coverages,including stock throughput,transit,stock,excess stock,freight liability shippers interest,cargo legal liability and warehouse legal liability.Parsyl insures goods in foods,pharmaceuticals and life sciences industries as well as logistics participants within the perishable supply chain.The Essential Consortium is supported by Lloyds syndicates including SCOR 2015,RenaissanceRe Syndicate 1458,and other leading smart trackers7.Parsyl graduated from the inaugural Lloyds Lab in 2018.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry22Designing for the gap in delays and interruptions with Otonomi Otonomi is a specialised platform for parametric cargo insurance designed to address the limitations and exclusions found in traditional cargo policies.Traditional policies fail to provide coverage for the business interruptions and economic losses caused by delays in the supply chain.These delays can be unpredictable and arise from factors like adverse weather conditions,air traffic congestion,equipment malfunctions,and labour shortages.The potential economic losses resulting from such delays can include loss of use,decreased sales,reduced value,expenses for alternative routes,penalties,fees,and other consequential damages.Otonomis innovative approach aims to bridge these gaps and provide comprehensive coverage for these specific risks.Every year,an average of 61%of cargo flights suffer shipment delays.Otonomis Cargo Delay Insurance compensates shippers of any critical cargo,for delays and loss of use for any delay greater than 12 hours with limits of up to$100,000 per conveyance.Each time theres a shipment or a cargo delay,our blockchain infrastructure detects the delay of shipment,communicates with a smart contract which automatically adjudicates in 45 minutes instead of 45 days and processes the digital payments directly to the customer in minutes,Yann Barbarroux,CEO of Otonomi Policies are provided as an embedded insurance offering which can be administered per shipment,with API-based infrastructure to both bind and trigger pay-out policies.Each policyholder has a digital wallet which is used to resolve and pay-out claims quickly.Claim payments can be used to cover increased costs of delays,loss of use,diminished value,property damage deductible,applied to underinsured property,and cover any contractual/penalty obligations.Initially,coverage for is available for air shipments with planned expansions into Ocean and Ground transport in the near future.In March 2023,Otonomi announced the partnership with Greenlight Innovation Syndicate 3456 to act as a platform provider for a Parametric Cargo Insurance Program.The programme is aimed at bridging the$10bn gap left by global supply chain delays across sectors.“At Otonomi,we are firming up our footprints in unchartered territories when it comes to providing a complete overhaul of the autonomous provision of insurance,in addressing the problems of an industry screaming for innovation.It is an amazing opportunity for the logistics customers as they are leveraging aggressive tech and predictive analytics to recoup vital capital and protect their liability risks.”Yann Barbarroux,CEO,OtonomiOn the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industrySupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry2324Acceleration opportunitiesAs well as insurance industry acceleration opportunities,there are technology companies innovating with the sector in business resilience that could serve as partnership opportunities to fill data gaps.Many transportation and logistics companies mitigate supply chain risk as far as reasonably practicable,but there will be elements of risk they cannot totally control,e.g.will a supplier of a supplier suffer a property damage loss the aggregate effect of which is a carrier disruption?Many transportation and logistics companies will lease premises and vehicles with increasing costs from the lease providers and landlords being passed onto the transportation and logistics companies.Most businesses do their best to reduce this Tier 2 and deeper risk as far as possible by identifying and qualifying secondary suppliers.In the transport sector,contingencies could include measures such as placing alternative carriers on call off contracts,(either formally or by way of reciprocal agreement),introducing additional buffer stocks e.g.fuel or simply identifying alternative routing options.Building confidence with a transparent supply chain pictureAccess to reliable,quality data underpins underwriters ability to quote for a risk and has long been a barrier for both clients and insurers.But that is changing and action is concentrating in key areas.The WTW Supply Chain Survey(2023)found that 81%of transportation and logistics companies have either identified all the data they require and have robust processes in place to gather it or are establishing those processes now 11%higher than semiconductor companies.57%of those surveyed are developing detailed understanding of their supplier networks and 48%are improving relationships with suppliers and customers to do that.When asked about where they were investing focus in their supply chain management,30%said they were focusing on their facilities infrastructure,loss control and security(30%),freight costs(23%),and insurance risk transfer(17%).We have created an in-house product to track shipments for our customers while in transit.We also work with outside consultants/technology companies on supply chain and compliance advice.Global end-to-end transportation companyWeve built an internal tool showing every truck loading and unloading in our network.Regional trucking companyThe only visibility in Tier 2 is from the press.But we also try build relationships from direct communication at conferences or at company updates.Mode specialist,Global transportation companyFigure 2:Measures with greatest impact on managing supply chain risks00 Pveloping detailed understanding of our supplier networksConsolidating our supplier baseImproving data quality and data sharingDiversifying our supplier base572veloping a detailed understanding of our supply chainIncreased offshoringUsing supply chain mapping softwareIncreased onshoringImproving relationships with suppliers and customersOutsourcing previously in-house activitiesBringing previously outsourced activities in-house49&H%H#48 %Source:WTW Global Supply Chain Survey 2023,transportation and logistics companiesOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry25As digitisation advances,transportation and logistics companies have responded to supply chain events by investing in tools and technology methods,most notably enterprise resource planning(ERP),electronic data interchange(EDI),and application programming interface(API)systems to improve operational efficiency and enhance customer relationships across the entire value chain.These new sources of data could be used by insurers to consider product innovation whether thats designing new products,tailoring existing offerings,or rethinking areas where capacity has been scaled back due to lack of information.As data proliferation continues and these service providers take advantage of integration through APIs,core elements of addressing supply chain risk are coming together to increase tracking and visibility,support documentation and analytics,and enable inventory tracking across the supply chain.Priority areas where acceleration opportunities have been identified,include:Supply chain management systems(SCM):SCMs manage the flow of goods,data,disruptions events,and finance from beginning to end.Included in this are warehouse management systems(WMS)that offer visibility of a businesss entire inventory from distribution to end consumer.As third parties continue to support transportation and logistics companies in identifying and mapping their supply chains,insurers and brokers can gain greater visibility into industries and their global interconnections Transportation management systems(TMS):TMS platforms assist in the planning and execution of the physical movement of goods.As companies continue to build data in transportation and logistics planning,insights can be harvested on loss history and route resiliency,as well as identifying vulnerability characteristics and prompting risk-based decision making.ClearConnect Solutions is an example of a company working between TMS and insureds to bring risk clarity to insurers Real-time transportation visibility platforms(RTTVP):RTTVPs provide visibility of orders and shipments of commercial customers and consumers once they have left the warehouse.As insurers and brokers continue to invest in integrated systems and service offerings,partnering with RTTVPs could be used to track live aggregations and alert-based actions as events unfoldFrom an insurer perspective,supporting or incentivising organisations to take such actions could ultimately result in greater mitigation of risk and exposure,and there is an opportunity to partner with transportation and logistics companies to map supply chains through their journeys.Third party companies like Oracle,SAP,Blue Yonders Luminate Logistics,CH Robinsons Navisphere,project44,and Shippeo are examples where insurers and brokers could use technology,risk engineering expertise and insurance to help clients identify,assess,mitigate,and transfer supply chain risks.On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industrySupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry2627Transportation Management System (TMS)Freight management Route optimisation Delay trackingEnterprise Resource Planning(ERP)Order processing Resource optimisation Financial accountingWarehouse Management System (WMS)Picking,storage and shipping inventory Efficiency management and risk visibilitySupply Chain Management Systems(SCM)Tracking and Visibility(RTTVP)Inventory trackingSupply Chain Management(SCM)System Blue Yonders Luminate Logistics Oracle SCM SAP SCMTransportation Management System(TMS)Blue Yonders Luminate Logistics CH Robinson Navisphere e2open TMS(see semiconductors report)SAP TMSReal-Time Transportation Visibility Platform(RTTVP)Blue Yonders Luminate Logistics e2open(see semiconductors report)FourKites(see food and drink report)project44 ShippeoWarehouse Management System(WMS)Blue Yonders Luminate Logistics Oracle Warehouse Management SAP WMSNote:Examples in italics can be found in our previous industry reports,and are also examples relevant to transportation and logistics.Source:Adapted from Euristiq8On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry28 Oracle Supply Chain ManagementSCMTMSWMSRTTVPAs well as semiconductor companies,Oracle are also working with transportation and logistics companies to respond to their supply chain challenges.Oracle Supply Chain Management(SCM),Transportation Management,and Warehouse Management System(WMS)are modular systems that span overall supply chain planning,warehouse resource management,transportation planning,through to the end delivery.Most importantly these systems can be integrated with transportation and logistics customers and partners to create a shared view that allows:Transportation management and optimisation:route planning across multiple modes of transportation to find the most efficient options,including predicting transit times with machine learning capabilities Logistics Network Modelling:allowing what-if scenario modelling to optimise the transportation network and determine the best option considering the time and cost impact of the proposed changes and execute them New sustainability collaborations with groups such as Global Logistics Emissions Council(GLEC)to create a uniform template of calculating emissions across the multimodal transport supply chain9 Cross-border compliance:surfacing accurate data and mitigating financial risk related to custom fines,penalties,and storage fees Many retailers are creating a network of smaller delivery depotsincluding their own brick-and-mortar storesto shorten the distance between inventory and customers homes.Being able to integrate warehouse management systems into supply chain management systems supports a more complete view of riskA collection of industry partnerships and acceleration opportunities:On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry29 Blue Yonders Luminate LogisticsSCMTMSWMSRTTVPBlue Yonder is supporting transportation and logistics companies through a predictive supply chain and execution platform that can integrate:Supply chain modelling:through integrating the below capabilities,Luminate Control Tower surfaces value chain insights from the entire digital ecosystem to predict and resolve potential supply chain disruptions.Luminate Control Tower was used during pandemic lockdowns to divert critical materials for Blue Yonders customers and tracking over 200 containers across 40 vessels with$500m worth of products during the Suez Canal blockage10 Warehouse management and robotics integration:operational and real-time visibility of supply,inventory,distribution,and customer order fulfilment Transportation and logistics network planning:managing both inbound and outbound freight,and by integrating supplier and carrier collaboration for capacity,pricing,and last-mile providers,as well as resource optimisation,movement planning and inventory tracking.With the passing of the United States-Mexico-Canada Agreement(USMCA)linking the Mexican,American,and Canadian markets,Blue Yonder partners with project44 and Forager Groups(now Arrive Logistics11)SCOUT platform to help companies gain greater visibility into their shipments when traveling from domestic to international jurisdictions with the aim to serve as a potential framework for future cross-border shipping integrations in the rest of the world12 Blue Yonder accelerated its collaborations during COVID-19,with a particular emphasis on harmonising freight,net-zero carbon sustainability,automation,and on-time delivery(OTD)for freight forwarding operations.Recent cross-industry partnerships include:DHL Supply Chains“plug and play”robotics platform powered by Microsoft and Blue Yonder in June 2020 to give customers greater flexibility in selecting and integrating different robot vendors into a single solution.The first implementation at a DHL warehouse in Madrid has already reduced robotics integration times into existing platforms by 60%,with DHL seeing further improvements of up to 90 Onboarding of nineteen TMS and ERP systems onto Navisphere,including Blue Yonder,for increased Full Truckload(FTL)and Less than Truckload(LTL)integration14 Joining the Scheduling Standards Consortium(SSC)in May 2023,an industry-led collaboration focused on the development and promotion of an open API standard for scheduling in the logistics and transportation industry15On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry30 SAPSCMTMSWMSRTTVPSAP are supporting transportation and logistics companies to manage their supply chains and communicate with their end customers.SAPs cargo,transportation,and logistics solutions are powered by SAP S/4HANA Cloud,SAPs primary ERP system that,amongst other offerings,incorporates the companys Extended Warehouse Management,available-to-promise(ATP)functionality for selection of alternatives and efficient stock management16,and a Global Track and Trace solution for predictive modelling of milestones and alerts for delays and impacts to customer shipments into one platform.Wider capabilities include:Supply Chain Management(SCM):combines digital services for supply chain planning and logistics,manufacturing,product lifecycle management,and enterprise asset management Cogniac Visual Operations Intelligence:uses artificial intelligence(AI)to visually detect and identify supply chain-based information.Current use cases include reading packaging labelling and detecting wheel defects on trains17 SAP Integrated Business Planning(SAP IBP)for Supply Chain:integrates key aspects of the planning process,combining sales and operations,forecasting and demand,response and supply,demand-driven replenishment,and inventory planning18 SAP Business Network Supply Chain Collaboration:allows transportation and logistics companies to collaborate with trading partners on a single,networked platform via inventory visibility and automation.This allows tracking of goods in-transit and supports quality control inspections to achieve on-time customer deliveries19 SAP Sustainability Footprint Management:calculates the climate impact at the product,corporate,and value chain level to meet carbon accounting needs for Scope 1,2,and 3 emissions20On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry31 CH Robinsons NavisphereSCMTMSWMSRTTVPCH Robinson is an end-to-end transportation company that has been investing in their own transportation management system(TMS)alongside moving goods to support their customers to increase supply chain visibility through an online platform.Introduced in 2012,Navisphere allows customers to access a network of 200,000 shippers and carriers covering:inbound,outbound,customer pickup,full truckload(FTL),less than truckload(LTL),barge,parcel,and flatbed across air,sea,land,and rail transport domains.CH Robinson operate their own in-house innovation team and technology incubator,CH Robinson Labs,which partners with Microsoft Azure and Azure IoT Central to integrate monitoring factors such as temperature shock,tilt,humidity,light,and pressure in shipments to provide customers a more complete and detailed level of intelligence of goods in transit21.Capabilities include:Emissions IQ through Navisphere Insight:a benchmarking tool which supports their users to measure and reduce carbon output by mode,location,and retailer Procure IQ:utilises an individual companys shipping data to determine the most optimal manner of purchasing transportation Market Rate IQ:helps deconstruct shipping rates against neutral market data provided by DAT,a freight and analytics company whose spot rate benchmark is based on$110bn in shipment data across 68,000 shipping lanes22Looking forwards,CH Robinson are expanding their services and platform to integrate future transportation developments by partnering with autonomous driving technology company Waymo23 To demonstrate the practical applicability of transporting long-haul customer freight,Waymo Via recently conducted and completed a series of pilot programs for Constellation Brands,an American producer and marketer of beer,wine,and spirits.To date,Navisphere and Waymo Vias partnership has helped Constellation deliver more than 1 million pounds of freight with a 100%on-time delivery rate and zero damage to loads24.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry32 project44SCMTMSWMSRTTVPproject44 is a platform to improve supply chain visibility,reporting and analytics for shippers,carriers,and 3PL(third party logistics)providers enabling companies to track shipments across the global supply chain.Integrating 1,000 APIs across ocean,air,rail,LTL(Less Than Truckload),volume LTL,truckload,and parcel through a network of over 220,000 carriers spanning 170 countries,project44 provides real-time,multimodal visibility into current shipment location,as well as insights for accurate ETAs(Estimated Time of Arrival)and carrier performance,which can then be used to provide end customers and internal stakeholders more transparency into parts and goods25.Current developments have been focused in two key areas:expanding their partner ecosystem with new agreements with companies such as SAP,Blue Yonder,Oracle,Manhattan Associates,and IBM,and engaging in a series of strategic acquisitions of key businesses crucial to increasing its visibility of international value chains.These include:Deepening its already extensive partnership with Oracle to extend mapping coverage to air shipments as part of Oracle Transportation Management(OTM)Cloud26.Before the implementation of this integration,mutual customers of Oracle and project44 would have had to use two separate platforms,OTM and project44s Visibility Operations Center.This modality integration will allow users to initialise shipments for tracking via an API that connects Oracles TMS to project44 this information will provide ETAs,location updates,and shipment status on a single platform without the need for platform redundancies Acquiring Ocean Insights,a solutions provider for ocean freight intelligence.As companies and 3PLs have been keen to map in-transit movements and delays of their goods,project44s Ocean Terminal Visibility is designed to retrieve data on goods and shipments while stationary at ports via container discharges,locations in terminal,status holds,customs clearance,and availability for pickups,providing visibility into at least 62 terminals and 26 ports,covering 95%of US containerized freight27 The ability to track over 350,000 containers and 5,000 vessels daily due to significant investments from the investment arm of A.P.Moller Maersk,the parent of container shipping company Maersk Line28,as well as an extended partnership with CEVA logistics for track and trace functionality.Coupling Automatic Identification System(AIS)vessel tracking with project44s ocean and port visibility solutions,CEVAs customers will be able to closely monitor shipment location,receive shipping notifications,and be informed of carrier transfers and dwell times29 To consolidate processes and mitigate cargo risk,project44 has partnered with Reliance Partners to insure freight via a streamlined API integration into a users dispatch workflow,saving time and eliminating redundant paperwork and costly manual processes30.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry33 ShippeoSCMTMSWMSRTTVPShippeo is a real-time multimodal shipment visibility platform with tailored solutions for shippers,carriers,and logistics providers.With a footprint in 75 countries,Shippeos network connects over 140,000 carriers via carrier onboarding,compliance,and scorecards through the use of carrier,supplier,or delivery site performance records.Shippeo provides insights into transportation operations through online dashboards and reporting,to enhance key performance indicators(KPIs)on transport volumes,on-time deliveries,and dwell time31.Shippeos platform is divided into three key views:Shipper visibility:instant tracking and shipment visibility are enhanced with enhanced GPS tracking and 100%localised data servers for data transfers,storage,and compliance for regulatory frameworks such as General Data Protection Regulation(GDPR)32 Ocean visibility:provides customers with ocean transport data on more than 3,000 ports worldwide.With the addition of New Lane Insights to the companys Port Insights,ocean freight visibilitys network is fed by multiple tracing inputs such as real-time tracking,lead times,and transhipment duration through geofencing technology and live AIS satellite data33 Carbon visibility:a consolidated carbon emissions platform that provides a consistent framework for comparing performance across carriers,utilising carbon emission calculations based on the GLEC framework34.With a new platform integration with carbon emissions estimating company Searoutes,CO2 emissions for upstream and downstream transport and distribution activities can be determined by origin,destination,or carrier,and calculated using tracking data,container type,weight,truck type,engine type,and vessel IMO number35Shippeo is also investing in smart tracking through a collaboration with e2open,using their supply chain planning and execution capabilities.This includes a new offering that aims to enable users to virtually look inside trucks or containers to see what specific goods are being moved and what if any corrective measures are needed to increase operational efficiency and avoid delays36.On the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry34Across all three industries explored in this series there was recognition that resiliency is impossible unless buyers,suppliers and other parties along a value chain are willing to share data and collaborate.This will require trust and new ways of sharing data securely.As Reuters noted in a recent report,“With the benefits of increasing collaboration through data sharing and visibility into deeper tiers becoming more obvious,addressing mistrust becomes a key objective and will require concerted and directed efforts organisations will need to move closer to their suppliers and build relationships and trust,but they can also use smart approaches to data sharing to make progress”37.Potential opportunities to accelerate this further include:To support these opportunities,brokers and risk advisory partners,in partnerships with technology solutions providers some of which have been highlighted throughout this report can explore how to fill data gaps and connect organisational resilience proactivity to risk transfer solutions.The transportation and logistics companies we spoke with as part of this research would welcome such discussions with their insurance and broker partners.Notably we see that the transport and logistics industry would welcome discussions around risk management expertise to offer more insight on their individual risks.Transportation and logistics company data collation has been mentioned above,but this could be enhanced through the creation of industry supply chain risk standards and subsequent data sharing with insurers.This could be provided by the insured as a pre-requisite to conversations about cover availability and cost(i.e.to demonstrate whether they are a well-managed enough risk for insurers to want to engage with).In time,these developments could feed into digital twins,mapping out supply chains and risk resilience plans to provide a greater view of risk and enable more sophisticated modelling Establishing unique supplier identifiers for every company to generate a granular view of networks,supplier tiers,routings etc.Unique identifiers can also support insurers in understanding aggregations.Progress in this area is already underway with some technology companies offering dedicated data processing platforms this could be complemented in the semiconductor industry by transportation and logistics providers whose data could augment the view of connections between nodes to map greater levels of supplier tiers Availability of real time data on events affecting the supply chain is growing within the transportation and logistics industry,but wider adoption of this capability would enable proactive and faster reactive responses and reduce impacts of loss.Insurers could play a role in incentivising greater uptake of this data through partnerships with the accelerators listed in this section010203On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chainsSupply chain insurance awareness and product innovation opportunities in the transportation and logistics industrySupply chain insurance awareness and product innovation opportunities in the transportation and logistics industry3536Supply chain data sourcesStandardisation Transition technologiesPolicy and finance engagement Regulation The Global Supply Chain Pressure Index(GSCPI)38 uses metrics like transportation costs,Purchasing Managers Index(PMI)surveys,and manufacturing firms across seven interconnected economies to predict potential supply chain disruptions.It uses data from the Baltic Dry Index,Harpex index,U.S.Bureau of Labor Statistics,and PMI surveys to assess potential disruptions in the global supply chain The World Banks Logistics Performance Index is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance39 resourcetrade.earth has been developed by Chatham House to enable users to explore the fast-evolving dynamics of international trade in natural resources,the sustainability implications of such trade,and the related interdependencies that emerge between importing and exporting countries and regions40 Scheduling Standards Consortium(SSC):A collaboration amongst the transportation&logistics industrys key freight,B2B,and cloud-based companies to establish freight appointment scheduling standards that provide visibility into the supply chain.Key goals will be to provide a number of standard releases in 2023,introduce a System Interaction Model,application programming interface(API)design and create a common freight transportation languageTransportation mode data Import and export delays:With TradeLens discontinued in 2023,new innovation opportunities are opening for service providers.CargoX is an example of an organisation to watch where momentum is gathering Container shipping indicators,based on ship tracking data from Marine Traffic41,MDS Transmodal42 Aviation logistics,based on tracking data from Cargo iQ43,which is supported by IATA(International Air Transport Association)9 ocean carrier members of the Digital Container Shipping Association(DCSA)44 recently committed to achieving 100%electronic Bills of Lading(eBL)adoption by 2030Transportation and logistics companies and standards bodies are engaged in industry initiatives designed to 1)standardise data across multimodal methods of transportation and 2)standardise data to support quantification and reduction of GHG emissions.From a supply chain perspective,ISO 22301 is a key risk management standard and establishes a code for implementing Business Continuity Management Systems(BCMS)to protect against,reduce the likelihood of the occurrence of,prepare for,respond to and recover from disruptions when they arise.Multimodal dataISO 23354 aims to improve data interchange efficiencies amongst the multiple intermodal networks that make up the various facets of transportation modes45.Three key committees responsible for driving standards and actions across transportation and logistics include:ISO/TC 22:Road vehicles,ISO/TC 104:Freight containers,and ISO/TC 204:Intelligent transport systems.Sustainable supply chain dataISO 14083 is a new standard focusing on quantification and reporting of GHG emissions to support the sectors carbon reduction efforts by providing the first universal method for logistics emissions accounting46.The standard embeds the principles of the Global Logistics Emissions Council(see report section 2)into a formalised ISO compliant methodology47.PAS 2060 provides guidance on how to quantify and reduce GHG emissions in specified business areas such as products,services,and infrastructure.As the only internationally recognised certification for organisational carbon neutrality,PAS 2060 provides a verifiable method to support ESG and net-zero goals and requires the total amount of residual carbon emissions to be offset by certified carbon credits48.See section 2 for a deep dive on sustainability initiatives.IEAs ETP Clean Energy Technology Guide49 contains information for over 500 individual technology designs and components across the whole energy system,of which 70 relate to transportation.For each of these technologies,it includes information on the level of maturity and a compilation of development and deployment plans The International Maritime Organisation(IMO)has launched CARES to accelerate green technology demonstration and deployment in the maritime industry,promoting a blue economy growth.The program links international initiatives,research and development centers,and green financing with financial institutions and transportation companies50 Towards Zero Carbon Aviation(TOZCA)is a project led by Professor Andreas Schfer at the Air Transportation Systems Lab,University College London and supported by WTW that is examining how the sector can realistically move towards a net zero climate impact global aviation system.The project will develop a comprehensive tool suite to simulate the most cost-effective transition toward a net zero-carbon aviation system by 2050 and a later 2070 date,as well as the costs and emissions trajectories associated with such transitions,looking at changes in technology,fuels,operations,competition,and consumer behaviour that can lead to drastic CO2 emission reductions51 The World Bank is the largest global provider of development financing for transport,focusing on climate-smart systems.With 172 active projects and$34.1bn in commitments52,the banks Global Facility to Decarbonise Transport(GFDT)aims to accelerate innovation and investment in climate-smart mobility solutions.In February 2023,the bank announced a$50m project to repair Ukraines transport network,supporting humanitarian relief and increasing import and export corridor capacity53 The EUs TEN-T policy focuses on developing efficient,multimodal,and high-quality transport infrastructure across the EU.25.8bn will be allocated for projects aiming to remove bottlenecks,ensure sustainable transport systems,and optimise interconnection and interoperability54 The Freight Energy Forum55 is a new UK initiative to bring government and industry together to support the sector across all modes including rail,road,air,maritime and warehousing reach net zero by 2050.The forum will discuss potential solutions that the sector could take to start reducing emissions now and,for the longer term,will look to create a plan or roadmap to roll out future clean energy infrastructure for the industry The Inflation Reduction Act and Airport Infrastructure Resilience Act of 2023 aim to legislate$300m annually between 2024 and 202856.Separately,the US Department of Transportation has allocated$703m to fund 41 projects to enhance port facilities,including enhancing supply chain reliability,efficiency,reduced emissions,and workforce opportunities UNCTAD and Barbados will host the first Global Supply Chain Forum in March 2024 to address supply chain challenges,food security,and trade facilitation.The forum will focus on climate change adaptation and mitigation strategies,sustainable transport networks,international trade financing mechanisms,and stress-testing exercises using the Federal Reserve Bank of New Yorks Global Supply Chain Pressure Index57 using data from the transportation and manufacturing sectors58 EU Supply Chain Law:the draft Act requires EU companies to audit suppliers along the entire global supply chain,including all direct and indirect business relationships with the aim to ensure compliance with applicable human rights standards and environmental protection.The directive could affect around 12,800 companies EU Data Act 2023:The European Parliament has adopted its position on the Data Act,the first EU industrial data rulebook,setting harmonised rules on accessing,sharing and using data generated by connected products.The Data Act is specifically relevant for operators transporting people and goods,considering the amount of data generated by road transport vehicles59 In February 2021,Executive Order 14017,“Americas Supply Chains,”60 directed a whole-of-government approach to assessing vulnerabilities and strengthening the resilience of critical supply chains61 through two interagency supply chain task forces(the Supply Chain Disruptions Task Force and the Supply Chain Trade Task Force).The US Department of Transportations recent Freight Logistics Optimisation Works(FLOW)initiative will serve as an independent data steward for participants to exchange supply and demand information to be aggregated,anonymised,and returned for a holistic view of freight62 Cyber:The European Union Agency for Cybersecurity(ENISA)is the Unions agency dedicated to achieving a high common level of cybersecurity across Europe.The revised Directive on measures for a high common level of cybersecurity across the EU(NIS2)63 and the additional notification provisions for security incidents aim to support a better mapping and understanding of relevant incidents.Transportation is one of the key sectors this directive aims to support data provision for.Data standards and industry engagement opportunitiesTransportation and logistics companies are already undertaking steps with third parties,and the insurance industry can join those efforts to further incentivise changes and support the development of new risk sharing solutions.Conclusions ConclusionsOn the move:Rethinking transportation and logistics supply chains 38ConclusionsOn the move:Rethinking transportation and logistics supply chainsConclusions-The role for the global insurance industry The supply chain disruption experienced during the COVID-19 pandemic,and more recently following the outbreak of conflict in Ukraine,has highlighted both the importance of the transportation and logistics industry and the fragility of global food security and supply chains.Across all three industries we have explored through this series there is clear value to be gained from having deeper,specific conversations on supply chain risks and resilience the industry must play a proactive role in helping customers understand both their exposure and their coverage to ensure the right solutions are put in place.This research outlines tangible steps that insurance and reinsurance organisations can take to support transportation and logistics companies and their needs;but it is only as effective as its application.The real work is in converting those insights into action.An opportunity for the(re)insurance industry to respondInnovative solutions:The(re)insurance industry can help to build long-term resilience by deploying its capital to remove risks from customers balance sheets and reduce their exposure to supply chain risks.The increasing turbulence of the risk landscape and the demand for more bespoke coverages raises expectations of the insurance industry to innovate in the way that it provides services and improve its communication around how existing products can respond to supply chain risks.In some cases those interviewed for this research described perceived product gaps where solutions already existed;however,a series of protection gaps have been identified which insurers could look to address.In some cases further modelling,data partnerships and in-depth conversations with the transportations and logistics industry may be required.Opportunities for insuranceRaise awareness of existing productsConsider new products in the gaps highlighted by transportation and logistics companiesIdentify and share modelling needs Collaborative action:Insurers,brokers and risk management service providers have a unique opportunity to support conversations between insurers and insureds.As an industry built on the principle of bringing teams together to discuss and share risk,opening the dialogue on supply chains and forming new partnerships will allow insurance to respond to a fast-moving landscape.Transportation and logistics companies are acting now,and brave and agile insurers can harness this opportunity.This also extends to exploring public private partnerships as governments around the world look to secure national supply chain resilience and critical transportation and logistics infrastructure.Opportunities for insuranceWork closely with customers to obtain detailed exposure data and develop capabilities to better quantify supply chain riskSupport governments supply chain resilience efforts through public private partnerships and knowledge sharing On the move:Rethinking transportation and logistics supply chainsOn the move:Rethinking transportation and logistics supply chains 3940ConclusionsConclusionsActions that Lloyds will takeLloyds will continue to support innovation around transportation and logistics supply chain protection gaps through convening platforms such as Lloyds Futureset and the Lloyds Lab.Through this research,we hope to help businesses and the insurance industry understand how specific risks across transportation and logistics supply chains can be managed,where existing support from the insurance industry is currently available,and where new specialist coverage could be introduced.Lloyds is committed to supporting innovation across the market and has set up a number of facilities to ensure that the market has the space needed to innovate or commit capacity to new ventures,including:Lloyds Lab:an award-winning space dedicated to accelerating and fostering new products and solutions fit for the needs of our customers around the world Lloyds Product Launchpad:providing 150m of capacity,the Lloyds Product Launchpad is committed to providing a safe space for underwriters to experiment with new ideas in a controlled way,which balances the need for appropriate oversight with the risk of not innovating fast enough Innovation class of business GWP targets:allowing syndicates to commit an additional 2%of their Gross Written Premium(GWP)from their business as-usual plan to a dedicated innovation class of business Supply chain cover does exist today,but it can often be complex to underwrite and costly to buy.Additionally,these products will need significant development to support supply chain resilience against future systemic risks.Having affordable and accessible product and service solutions will be key to instilling confidence in businesses when facing the future.As an industry we need to develop a wider range of solutions that can fulfil this growing need,but to do this we will need the data to understand the complex supply chain networks that exist and the risks to which they are exposed.I see this as a great opportunity for our industry to work with all stakeholders,businesses,and governments around the world,to develop a greater level of certainty on supply chain resilience amid a world filled with challenges.John Ludlow,Former Airmic CEO,Lloyds Futureset supply chain masterclass,March 20212Explore new data sources and partnerships:The improved visibility of supply chain related exposures from new data sources will be a key factor in helping insurance play a meaningful role.The transportation and logistics industry recognises that providing insurers with better data and having a more bespoke conversation with insurance partners will be critical to ensuring that their capacity and coverage requirements can be met.This report provides a number of case studies to highlight the type of partnerships which could be brought to bear.In addition,there are further opportunities for the industry to respond to changing customer needs,such as providing business interruption reviews as part of a risk advisory proposition,or geopolitical wargaming scenarios to stress test potential blockages in supply chains.Opportunities for insuranceConsider how the acceleration case studies outlined in this report could help grow supply chain knowledge,harness customers existing digitalisation efforts,and complement modellingConsider investing in capabilities to link supply chain exposure to business interruption modellingContinued development of proactive risk management solutions Provide expert advice:The insurance industry has an opportunity to actively help customers reduce their supply chain risk.Insurers have a unique opportunity to partner with an industry in that is already exploring its supply chain risks by supporting their risk management planning,mapping and modelling efforts.Entering into dialogue with businesses operating across the transportation and logistics industry can help both insurers and customers better understand the challenges around obtaining specialist insurance cover,and whether cover could be restructured,segmented or consolidated to make it more effective and sustainable.Opportunities for insuranceEngage with the transportation and logistics industry on risk understandingConsider new products to address the gaps highlighted by transportation and logistics companiesOn the move:Rethinking transportation and logistics supply chains 42ReferencesOn the move:Rethinking transportation and logistics supply chainsReferences1.https:/ 2.https:/ 6.https:/ 7.https:/www.instech.co/insight/marine-insurance-successfully-navigating-innovation-waters 8.https:/ 14.https:/ 16.https:/ 17.https:/sap.io/cogniac-announces-visual-operations-intelligence-platform-for-cloud-based-solutions-from-sap/18.https:/ 19.https:/ 20.https:/ 21.https:/ 26.https:/ 27.https:/ 28.https:/ 29.https:/ 30.https:/ 31.https:/ On the move:Rethinking transportation and logistics supply chains 43References32.https:/ 33.https:/ 34.https:/ 35.https:/ 36.https:/ 39.https:/lpi.worldbank.org/sites/default/files/2023-04/LPI_2023_report.pdf 40.https:/resourcetrade.earth/41.https:/ 46.https:/www.iso.org/obp/ui/#iso:std:iso:14083:ed-1:v1:en 47.https:/bifa.org/2023/12/20/decarbonising-the-logistics-supply-chain-whats-on-the-mind-of-industry-leaders-part-1/48.https:/ 50.https:/www.imo.org/en/MediaCentre/PressBriefings/pages/GMN-decarbonization-2021.aspx 51.https:/ 52.https:/www.worldbank.org/en/topic/transport/overview#2 53.https:/www.worldbank.org/en/news/press-release/2023/02/10/world-bank-approves-50-million-grant-to-help-repair-transport-infrastructure-in-ukraine 54.https:/www.europarl.europa.eu/factsheets/en/sheet/136/financing-the-trans-european-networks#:text=The proposed CEF total budget,3 billion for digital networks.55.https:/www.gov.uk/government/news/new-industry-and-government-forum-launched-to-boost-freight-decarbonisation-and-innovation56.https:/www.congress.gov/bill/118th-congress/senate-bill/1055 57.https:/unctad.org/meeting/global-supply-chain-forum-2024 58.https:/resilientmaritimelogistics.unctad.org/guidebook/31-ultimate-stress-test 59.https:/www.iru.org/news-resources/newsroom/iru-welcomes-european-parliament-vote-pioneer-data-act 60.https:/www.maritime.dot.gov/newsroom/biden-harris-administration-announces-more-703-million-improve-port-infrastructure61.https:/www.gao.gov/assets/gao-23-105534.pdf 62.https:/www.transportation.gov/briefing-room/usdot-supply-chain-companies-launch-new-data-exchange-strengthen-supply-chains 63.https:/eur-lex.europa.eu/eli/dir/2022/2555 On the move:Rethinking transportation and logistics supply chainsTwitter LloydsofLondon LinkedIn Facebook Lloyds 2024 All rights reservedLloyds is a registered trademark of the Society of Lloyds.This document has been produced by Lloyds for general information purposes only.While care has been taken in gathering the data and preparing this document,Lloyds does not make any representations or warranties as to its accuracy or completeness and expressly excludes to the maximum extent permitted by law all those that might otherwise be implied.Lloyds accepts no responsibility or liability for any loss or damage of any nature occasioned to any person as a result of acting or refraining from acting as a result of,or in reliance on,any statement,fact,figure or expression of opinion or belief contained in this document.This document does not constitute advice of any kind.This report offers a general overview of its subject matter.It does not necessarily address every aspect of its subject or every product available in the market and we disclaimer all liability to the fullest extent permitted by law.It is not intended to be,and should not be,used to replace specific advice relating to individual situations and we do not offer,and this should not be seen as,legal,accounting or tax advice.If you intend to take any action or make any decision on the basis of the content of this publication you should first seek specific advice from an appropriate professional.Some of the information in this publication may be compiled from third party sources we consider to be reliable,however we do not guarantee and are not responsible for the accuracy of such.The views expressed are not necessarily those of WTW.
2024-10-22
33页
5星级
Sumati SharmaIris TaguetTim BourneTRANSFORMING AIRLINE TRAVELExploring Air France-KLMs journey to ON.
2024-10-21
12页
5星级
MOBILITY BEYOND THE PANDEMIC 2 Contents Foreword _ 3 Executive Summary _ 4 Public transport evolutio.
2024-10-17
23页
5星级
EXECUTIVE SUMMARYIn support of Hong Kongs smart city agenda,the government revised and introduced re.
2024-10-16
92页
5星级
Closing the climate finance gap|ENRich 2022|1 2022 KPMG Assurance and Consulting Services LLP,an Ind.
2024-10-16
32页
5星级
罗兰贝格：预见2026：中国行业趋势报告（90页）.pdf
智源研究院：2026十大AI技术趋势报告（34页）.pdf
中国互联网协会：智能体应用发展报告（2025）（124页）.pdf
三个皮匠报告：2025银发经济生态：中国与全球实践白皮书（150页）.pdf
三个皮匠报告：2025中国商业航天市场洞察报告-中国商业航天新格局全景洞察（25页）.pdf
国声智库：全球AI创造力发展报告2025（77页）.pdf
中国电子技术标准化研究院：2025知识图谱与大模型融合实践案例集（354页）.pdf
三个皮匠报告：2025中国情绪消费市场洞察报告（24页）.pdf
中国银行：2026中国高净值人群财富管理白皮书（66页）.pdf
亿欧智库：2025全球人工智能技术应用洞察报告（43页）.pdf
0731-84720580
商务合作：really158d
友链申请 (QQ)：1737380874
最新报告
中英对照
全文搜索
报告精选
PDF上传翻译
多格式文档互转
入驻&报告售卖
会员权益
机构报告
券商研报
财报库
专题合集
英文报告
数据图表
会议报告
其他资源
研报
新质生产力
DeepSeek
低空经济
大模型
AI Agent
AI Infra
具身智能
自动驾驶
宠物
银发经济
人形机器人
企业出海
算力
微短剧
薪酬
白皮书
创新药
行业分析
个股研究
年报财报
IPO招股书
会议纪要
宏观策略
政策法规
其他
人工智能
信息科技
互联网
消费经济
汽车交通
电商零售
传媒娱乐
医疗健康
投资金融
能源环境
地产建筑
传统产业
英文报告
其它
行业聚焦
芯片产业
热点概念
全球咨询智库
人工智能
500强
新质生产力
会议峰会
新能源汽车
企业年报
互联网
公司研究
行业综观
消费教育
科技通信
医药健康
人力资源
投资金融
汽车产业
物流地产
电子商务
传统产业
传媒营销
其它
十五五规划系列报告合集（共48套打包）
2026低空经济/低空产业报告合集（共47套打包）
AI、科技与通信
广告、传媒与营销
消费、零售与支付
HR、文化与旅游
金融、保险与投资
能源、环境与工业
医疗制药与大健康
物流、地产与建筑
其他行业
AI ▪ 科技 ▪ 通信
数字化
金融财经
智能制造
电商传媒
地产建筑
医疗医学
能源化工
其他行业
收藏
下载
2026-02-02
AI查数
行业数据
政策法规
商业模式
产业链
竞争格局
市场规模
产业概述
其它
2026年
AI读财报
年报
一季报
半年报
三季报
IPO招股书
社会责任报告
A股
IPO申报
港股
美股&全球
新三板
微信扫码登录
手机快捷登录
账号登录
