Introduction: August 2022

Sustainable infrastructure investments in freight transport are growing—and new innovations and markets are paving the road to the future.

Freight transport is at the heart of global supply chains—from long-distance container shipping to last-mile local delivery—and a significant carbon emitter. In 2020, the transport sector accounted for 21 percent of global carbon dioxide emissions, 1 with trucks, rail, and ocean freight driving a sizable share.

Rapid decarbonization of the sector will require industry leaders to rethink long-term infrastructure investments, embracing both technology and sustainability. On these points, investor requirements are growing. Our estimates show that as much as $50 trillion of assets are managed by investors who prioritize environmental, social, and governance factors, and that $3 trillion to $5 trillion will be at stake across industries by 2030.

Stakeholders are quickly starting to see sustainability as a competitive advantage, rather than an executive priority. New innovations and markets are already shaping the future of commercial urban transport, with OEM technology, electrification, autonomy, sustainable fuels, and digitalization all being key components of how the industry needs to transform. And customers’ behavior is changing, with rising demand for green transportation to help satisfy their own carbon abatement commitments.

Now is the time to scale innovations—such as electric vehicles (EVs), fast-charging infrastructure, and hydrogen fuel cells—to enhance the sustainability and resiliency of our freight transportation system, reduce the sector’s outsize impact on the environment, and protect infrastructure from the effects of climate change.

This issue of Voices on Infrastructure features insights on these topics and more. McKinsey spoke with Robert Falck, founder and CEO of Swedish freight-technology company Einride, and Christoph Hempsch, head of sustainability for Deutsche Post DHL’s German Post and Parcel. The former interview covers how sustainability in freight will depend on the right business case and a combination of infrastructure, EVs, and customer demand; the latter explores how the last mile of delivery transport is evolving to meet the challenges posed by the COVID-19 pandemic, including the e-commerce surge and supply chain disruptions.

McKinsey senior adviser Dick Westney adds his perspective on how the Great Reallocation of energy and infrastructure investments is driving new strategies for managing uncertainties and risks. Other articles by McKinsey experts cover critical levers for road-freight decarbonization, such as reimagining the roads ecosystem and ramping up the hydrogen-refueling infrastructure.

Finally, rounding out this issue are recaps of recent McKinsey roundtables held in Hong Kong (on surviving the inflation and productivity crisis in the city’s construction industry), Tokyo (on navigating the new normal and decarbonization challenge in Japan’s infrastructure industry), and Sydney (on scaling EV infrastructure to meet net-zero targets).

Developing the solutions needed to tackle decarbonization in freight transport will require innovation and fundamental change—from the movement of goods to the establishment of our communities. Implementing these changes can make our transportation systems greener, more resilient, and more equitable. We hope you find this issue of Voices insightful, and we look forward to your thoughts.

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