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1. Chapter Four:
Emerging Issues in Transportation
Transportation is the backbone of supply chains. It ensures
that goods move efficiently from suppliers to
manufacturers, distributors, retailers, and finally, customers.
However, the transportation sector is constantly evolving
due to technological innovations, regulatory changes,
environmental concerns, and global disruptions.
Understanding emerging issues is crucial for supply chain
managers to design resilient, efficient, and competitive
networks.

2. cont…..
• Transportation issues have a direct impact on cost, service
level, and reliability of the supply chain. In 2025, key
emerging issues include:
 Rising fuel costs
 Labor shortages
 Regulatory pressures
 Sustainability demands
 Technological disruption
 Global supply chain volatility
• These factors require proactive planning and adoption of
modern strategies.

3. Major Emerging Issues in Transportation
A. Rising Transportation Costs
Fuel prices: Fluctuations in global oil prices increase freight
costs.
Labor costs: Driver shortages, higher wages, and labor
regulations affect road transport.
Maintenance and infrastructure: Aging infrastructure and
vehicle maintenance costs add to expenses.
• Impact: Companies must optimize routes, consolidate
shipments, and negotiate carrier contracts.

4. cont….
B. Technological Advancements
 Autonomous vehicles and drones: Reduce dependency on
human drivers but require regulatory approvals.
 IoT and real-time tracking: Sensors monitor location,
temperature, and condition of goods.
 Digital freight platforms: Connect shippers with carriers for
efficient load matching.
 AI and predictive analytics: Optimize routes, reduce delays,
and forecast transportation demand.
• Impact: Improves efficiency, reliability, and transparency in
the supply chain.

5. cont…
C. Environmental and Sustainability Concerns
Governments and customers increasingly demand green
logistics.
Transportation accounts for high carbon emissions.
Companies adopt electric trucks, biofuels, and carbon-
neutral shipping.
Regulations like emission standards affect route planning
and vehicle choices.
• Impact: Firms must balance cost efficiency with
environmental compliance.

6. Cont..
D. Urbanization and Last-Mile Challenges
• E-commerce growth increases demand for fast, flexible
delivery.
• Traffic congestion in urban areas delays deliveries.
• Micro-fulfillment canters, drones, and bike couriers are
emerging solutions.
• Impact: Last-mile logistics require innovation to meet
customer expectations for speed and reliability.

7. Cont…
E. Global Disruption
• Geopolitical tensions, pandemics, natural disasters disrupt
transportation networks.
• Port congestion, trade restrictions, and border delays affect
supply reliability.
• Risk management and alternative routing are critical
strategies.
• Impact: Companies must design resilient and flexible
transportation networks.

8. cont…
F. Regulatory and Compliance Pressures
• Governments impose safety, labor, and environmental
regulations.
• Compliance with international shipping laws regulations,
customs rules) is mandatory.
• Non-compliance can result in fines, shipment delays, and
reputational damage.

9. Cont…
G. Capacity and Labor Shortages
• Trucking and shipping industries face driver shortages and
reduced container availability.
• COVID-19 and other disruptions revealed vulnerabilities in
transport labor supply.
• Solutions include automation, driver training programs, and
multi-modal transport adoption.

10. Modern Solutions and Trends
A. Multi-Modal Transportation
• Combining road, rail, air, and sea to optimize cost, speed, and reliability.
B. Transportation Management Systems (TMS)
• Software platforms that help plan, execute, and monitor shipments.
• Supports route optimization, carrier selection, and freight auditing.
C. Green Transportation Initiatives
• Electric trucks, hydrogen fuel, and biofuels reduce emissions.
• Carbon offset programs are increasingly adopted by logistics firms.
D. Digitalization and Automation
• Real-time tracking and AI for predictive maintenance and route optimization.
• Warehouse-to-door automation improves efficiency in last-mile
delivery.

11. Cont……..
Implications for Supply Chain Managers
• Cost Management: Rising transport costs require better
budgeting and route planning.
• Customer Service: Urban delivery and e-commerce demand
faster, more reliable service.
• Risk Management: Global disruptions require contingency
planning and multi-sourcing strategies.
• Sustainability: Firms must align transport practices with
corporate sustainability goals.
• Technology Adoption: Investment in TMS, IoT, and
automation is critical to remain competitive.

12. Cont….
5. Real-World Example (2025 Scenario)
Amazon:
 Uses autonomous robots in warehouses and delivery drones for last-
mile.
 Real-time tracking and AI route optimization reduce delivery time and
costs.
 Sustainability: testing electric delivery vehicles and optimizing
logistics to reduce carbon footprint.
Walmart:
• Multi-modal transportation reduces costs and improves delivery
reliability.
• Investments in data analytics help forecast transportation demand and
avoid delays.

13. 4.1 Transport Technology Trends”
• Transport technology trends” refers to the new or rapidly
advancing technologies applied in freight, logistics, and
transportation — from factories/warehouses to final
delivery. These technologies aim to make transportation
faster, cheaper, safer, more reliable, and more sustainable.
Key Transport Technology Trends (2025)
• Here are some of the most important and impactful trends
today:

14. Cont…
1. Internet of Things (IoT) & Real Time Tracking /
‑
Monitoring
• IoT devices and sensors (on trucks, containers, packages,
warehouses) provide real-time data: location,
temperature/humidity (for perishables), handling, route,
status, etc
• This gives end-to-end visibility across the supply chain:
from origin to destination. Helps avoid losses, prevent
spoilage (for perishables), detect delays, theft, or damage
• Why it matters: With real-time visibility, companies can
respond faster, secure cargo, reduce risk, and improve
reliability.

15. Cont….
2. Automation, Robotics, and Smart Warehousing / Fulfilment
Centers
 Use of robots / automated guided vehicles (AGVs) / automated
storage and retrieval systems (ASRS) in warehouses and hubs — for
picking, packing, sorting, loading/unloading, storage.
 Autonomous or semi-autonomous handling reduces manual labor,
increases speed and accuracy, and supports 24/7 operations.
 In some cases, drones and automated systems are used for inventory
checks or movement inside large warehouses
• Why it matters: Automation speeds up throughput, reduces errors,
mitigates labor shortages, and improves scalability — especially
important with rising demand, e commerce growth, and tight delivery
‑
times.

16. CONT..
3. Artificial Intelligence (AI) & Machine Learning (ML) —
for Planning, Route Optimization, Predictive Maintenance,
Demand Forecasting
• Predictive analytics: forecasting demand, anticipating load
requirements, optimizing inventory and shipment volumes.
Helps avoid overstock or stock outs
• Maintenance: AI can forecast when trucks or equipment
need maintenance — reducing breakdowns or delays due to
mechanical issues.
• Why it matters: Makes supply chain smarter, more
adaptive, reduces waste (time, fuel, stock), improves
reliability and cost efficiency.

17. CONT….
4. Autonomous Vehicles, Drones, and Driverless Transport
Autonomous trucks (self driving freight trucks) are being
‑
tested and in some cases deployed for long haul transport.
‑
These systems reduce reliance on human drivers, reduce
labor and driver-shortage issues, and allow around-the-clock
operations (subject to regulation & safety).
• Why it matters: Potentially lowers costs, improves speed
and scalability, reduces dependency on human labor —
critical in regions facing driver shortage or high labor costs.

18. CONT….
5. Digital Platforms, Block chain & Transparency /
Traceability Technologies
• Use of digital freight platforms that connect shippers,
carriers, warehouses, and other stakeholders — streamlining
matching, booking, documentation, tracking.
• Block chain technology for immutable, secure, transparent
record keeping of shipments — helps in traceability
‑
(especially for sensitive goods: food, pharma), reduces
fraud, improves trust among supply chain parties.
• Why it matters: Enhances transparency, reduces paperwork
and disputes, improves accountability and trust — all of
which help in complex, global supply chains

19. CONT..
6. Sustainability-Driven Transport Technologies (e.g. Electric /
Green Vehicles, Smart Routing for Fuel Efficiency)
• Growing adoption of electric vehicles (EVs) or other low-
emission transport modes in logistics to reduce carbon
footprint.
• Combined with smart routing (via AI + IoT), companies aim
to reduce fuel consumption, emissions, and overall
environmental impact.
Why it matters: With increasing regulatory pressure and
consumer demand for “green logistics,” sustainable transport
technology is becoming a competitive as well as moral
necessity.

20. Why These Trends Matter —
• The world’s supply chains are more global, complex, and
interconnected than ever: cross-border shipping, perishable
goods, fast demand changes. These tech trends help manage
that complexity.
• Labor shortages, rising labor costs, and driver scarcity make
automation and autonomous transport attractive — tech can
mitigate human-resource risks.
• Increased customer expectations for speed, reliability,
transparency — real-time tracking and smart logistics help
meet those demands.
• Heightened environmental and regulatory pressure pushes
companies toward greener, more efficient transportation
methods.

21. 4.2 Environmental Issues in Transportation
• Transportation is a critical part of supply chains but is also
one of the largest contributors to environmental impact.
• As supply chains expand globally, the environmental
footprint of transportation —
• including air, sea, rail, and road — has become a major
concern.
• Addressing these issues is essential for sustainable supply
chains and regulatory compliance.

22. cont….
1. Overview
• Environmental issues in transportation are caused by:
• Greenhouse gas (GHG) emissions (CO , NOx, particulate matter)
₂
• Air pollution
• Noise pollution
• Energy consumption (primarily fossil fuels)
• Waste generation (packaging, tires, lubricants)
 Transportation contributes roughly 25–30% of global CO₂
emissions, with road freight being the largest source.
Environmental issues affect not only the planet but also
company reputation, regulatory compliance, and long-term
costs.

23. .
Key Environmental Issues
A. Carbon Emissions and Climate Change
• Freight transportation relies heavily on diesel and fossil
fuels, producing CO and other greenhouse gases.
₂
• Aviation and shipping are particularly energy-intensive,
contributing significantly to global warming.
• Climate change can also disrupt supply chains, causing
flooding, storms, and port closures.
Impact: Increased regulatory pressure, carbon taxes, and
stakeholder demand for greener operations.

24. Cont…
B. Air Pollution
• Trucks, ships, and planes emit NOx, SOx, and particulate
matter, affecting human health.
• Urban areas face severe air quality issues due to high traffic
density.
• Impact: Cities may impose low-emission zones or fines,
affecting route planning and operational costs.

25. cont….
C. Noise Pollution
• Heavy traffic, airports, and ports generate significant noise.
• Continuous exposure affects human health and local
communities.
• Regulations limit operational hours, especially for night
deliveries.

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D. Energy Consumption
• Transportation is energy-intensive, and fuel costs are
volatile.
• Fossil fuel dependence contributes to both environmental
degradation and economic vulnerability.
• Impact: Companies are incentivized to adopt fuel-efficient
technologies or alternative energy sources.

27. cont….
E. Waste and Resource Use
• Transportation generates waste from packaging,
maintenance (tires, oils, lubricants), and end-of-life
vehicles.
• Efficient logistics and packaging can reduce waste.
F. Land Use and Habitat Disruption
• Roads, ports, and airports alter natural habitats.
• Increased freight traffic may lead to deforestation or
wetland loss.
• Balancing infrastructure development with environmental
conservation is critical.

28. Drivers of Environmental Pressure
• Regulations and Policies
– Government policies like emission standards, carbon
taxes, and low-emission zones.
– International regulations, e.g., IMO (International
Maritime Organization) for shipping emissions.
• Consumer Pressure
– Customers increasingly demand eco-friendly products
and services.
– “Green logistics” is a competitive differentiator.
• Corporate Sustainability Goals
– Companies adopt net-zero targets, carbon footprint
reduction, and sustainable supply chain strategies.

29. Cont…
• Technological Advancements
– Renewable energy, electric vehicles, alternative fuels, and
smart routing help reduce environmental impact.

30. Strategies to Reduce Environmental Impact
A. Mode Optimization
• Shift freight from road to rail or sea, which are more
energy-efficient per ton-kilometer.
B. Alternative Fuels
• Electric trucks, hybrid vehicles, hydrogen fuel cells, and
biofuels.
C. Green Logistics
• Route optimization using AI/IoT to reduce fuel
consumption.
• Consolidation of shipments to reduce empty miles.
• Eco-driving practices and fleet efficiency improvements.

31. cont…
D. Sustainable Packaging
• Use recyclable, reusable, or biodegradable packaging
materials.
• Reduce over packaging to minimize waste.
E. Carbon Offsetting
• Companies purchase carbon credits to offset unavoidable
emissions.
F. Compliance with Regulations
• Meeting emission standards (EU Euro standards, IMO
sulfur cap).
• Participating in low-carbon transport initiatives.