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FedEx embraces shifting trends to navigate transport and logistics future in Australia

FedEx Australasia’s regional vice president Peter Langley discusses AI, technology and the HVNL review as he previews what 2025 has in store for transport

By Peter Langley – regional vice president, FedEx Australasia

The transportation and logistics industry is undergoing rapid transformation, driven by a confluence of factors including technological advancements, shifting consumer expectations, evolving regulations and the lasting impact of global events. As we move into 2025, several key trends will reshape the landscape, demanding adaptability and innovation.

FedEx is embracing these shifts—to optimise our operations, reduce costs and help create more sustainable practices that will define the future of shipping and logistics.

E-commerce Growth and Last-Mile Delivery

Australia’s e-commerce market is projected to generate between $42.2 billion and $57.7 billion in revenue by 2025, continuing its growth with a Compound Annual Growth Rate (CAGR) of 7.3 per cent to 10.5 per cent between 2019 and 2024. This growth puts pressure on last-mile delivery, a crucial cost driver.

Balancing efficiency with cost-effectiveness requires innovative solutions. Transport and logistics providers are streamlining the entire process, from order placement to doorstep delivery.

For example, businesses face the challenge of efficiently managing customs and import processes. To tackle this, FedEx has integrated the customs clearance process into its new intelligent Import Tool.

This tool offers comprehensive visibility, real-time updates and smoother, more predictable operations, helping businesses streamline their supply chain processes and meet rising demand.

AI and Automation – a Smart Strategic Partner

Digital transformation is driving a seismic shift and has brought immense potential for the logistics industry. Artificial Intelligence (AI) is reshaping how goods are transported, monitored, and analysed.

AI-powered route optimisation and predictive analytics streamlines operations, forecasts demand and improve decision-making and delivery performance.

Internet of Things (IoT) provides real-time supply chain visibility, enhancing tracking and management. Visibility in supply chains plays a vital role in modern logistics operations. Real-time tracking, data analysis and predictive models powered by AI are enabling logistics companies to respond more quickly to customer demands while enhancing overall service quality.

For example, in selected markets, FedEx uses AI for route planning to improve efficiency, reduce fuel consumption, and shorten delivery times. AI will play an even greater role in shaping the future of transportation and logistics.

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Sustainability Takes Centre Stage

Sustainability is no longer optional, but a core business imperative. Driven in part by increasing consumers and business demand, businesses are working to reduce their environmental footprint.

For example, introducing electric vehicles (EVs) to fleets and exploring hydrogen and biofuel options, with the aim of reducing reliance on fossil fuels. FedEx, for example, has already made significant strides in New Zealand with the rollout of 10 EVs to its fleet, a move that helps reduce the environmental impact of our operations. In 2025, we expect to see this trend expand across the Asia-Pacific region as more companies seek alternatives to reduce carbon emissions.

In addition, route optimisation technologies, which use sophisticated algorithms for route planning to minimise mileage and fuel consumption, can also help to use resources more efficiently, and may help reduce carbon emissions in operations with fewer kilometres driven. This, combined with a shift towards recyclable or reusable packaging, helps to ensure faster, more sustainable deliveries, enhancing customers’ overall experience.

Regulatory Landscape and Compliance

As the logistics industry becomes increasingly complex, so too does the regulatory environment. Incremental reforms to the Heavy Vehicle National Law are being proposed with the aim of supporting greater safety and productivity outcomes. Transport and logistics companies will need to pay close attention to these changes and proposed reforms in order to ensure compliance with this central and important piece of legislation.

Carbon emissions regulations may become stricter as governments work to meet international climate targets, including Australia, which is a party to the Paris Agreement and the global push towards net-zero emissions. The transport and logistics sector can expect enhanced emission reporting requirements and further regulatory measures to help reduce emissions within the transportation sector.

Building Increased Resilience in the Supply Chain

Recent years have highlighted the importance of resilient supply chains. In 2025, businesses will increasingly focus on improving their ability to withstand disruptions—whether they are caused by political events, natural disasters or global crises (e.g. COVID-19 pandemic). Advanced technologies like AI, blockchain and robotics will help companies build more flexible supply chains that can quickly respond to changing conditions.

Resilience requires real-time data analysis and supply chain diversification. FedEx maintains this resilience by continuously monitoring global trends and leveraging its extensive network to anticipate customer needs and remain agile and responsive. By integrating new technologies and optimising operations, the company is paving the way for a more reliable and secure future.

Looking Ahead

As FedEx kick-starts 2025, innovation, sustainability and adaptability will be key drivers of success in logistics.

The company will continue to use data, AI and machine learning in bold, new ways to deliver outstanding experiences and make supply chains smarter for everyone.

FedEx is committed to being at the forefront of the changes, helping Australian businesses navigate the future with efficiency, sustainability and agility.

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