Transport & storage firms are ditching green policies in favour of AI

A Government survey has revealed transportation & storage sector companies are abandoning their carbon reduction plans in order to finance AI projects. ‘Is this a sign of changing political and social priorities?’ asks the home delivery expert Parcelhero.

A survey from the Government’s Office for National Statistics (ONS) has revealed that green is no longer the new black when it comes to trending concerns for transportation & storage companies. The sector is scaling back its environmental initiatives in favour of an increasing focus on artificial intelligence (AI), says the home delivery expert Parcelhero.

The ONS Business Insights and Conditions Survey (Wave 129) asked UK companies about their attitudes towards green initiatives and AI programmes, as well as a wide range of other business concerns. The responses from many transportation & logistics sector companies (the category which includes logistics, parcels, haulage and warehousing firms) may raise some eyebrows, says Parcelhero.

Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘In March, UK businesses were asked to rank their major concerns. For the transport & storage sector, green initiatives – which were once a significant focus – saw a marked drop in importance. Instead, AI initiatives are taking centre stage as companies plan for the future.

Less keen on green?

‘When asked about the impact climate change may have on their business, only 3.9% of transport & storage firms now say they are “very concerned”, while a huge 50.9% state they are “not concerned”. When asked the same question back in September 2022, a significant 21.7% of transport & storage companies acknowledged they were “very concerned” about the impact of climate change on their business and just 23.3% said they were “not concerned”.

‘This fall in concern about environmental issues is being reflected in actual policies. The latest figures show that only 2.3% of transport & storage firms now have a climate change policy – fewer than manufacturers (6.1%) and retailers (3.3%). This figure has slumped from June 2022 when 7.8% of transport & storage companies reported they had such a policy.

‘Similarly, companies across all business sectors were asked if they have a net zero or greenhouse gas emissions target. Only 2.3% of transport & storage firms report they still have a target. As recently as March 2024, 8% of transport companies claimed to have a net zero or greenhouse gas emissions target, so that’s a marked year-on-year decline.

‘Of course, transport & storage companies aren’t operating in a vacuum. The switch of focus away from environmental issues could be a reflection of Trump 2.0-era priorities. The US has seen a backlash against climate targets and an increased focus on tech spending and it’s a change that seems to be echoed globally. Here in the UK, even former Labour PM Tony Blair has seemingly cooled on climate targets. In his foreword to the Tony Blair Institute for Global Change’s new net zero report, Blair writes, “…any strategy based on either ‘phasing out’ fossil fuels in the short term or limiting consumption is a strategy doomed to fail.”

‘Blair also suggests net zero is losing public support. As the debate continues, it will be interesting to see how consumers respond to any perceived softening in the logistics industry’s green goals and whether a negative response might renew the focus on carbon reduction plans.

The AI revolution

‘At the other end of the spectrum, AI initiatives are booming and transport & storage businesses are scrabbling to catch up with other sectors.

‘Back in October 2023, when companies were asked about barriers to adopting AI, a whopping 43.1% of transport & storage companies said they had not attempted to use artificial intelligence technologies in the last three months. In the latest survey, only 28.6% of sector companies now say they have not attempted to use AI. Evidently, not only is interest in the tech growing rapidly but transport & storage firms are actually now more interested in AI projects than their manufacturing and retail partners. 31.9% of manufacturers say they haven’t attempted to introduce AI in the last three months and 29.2% of retailers.

Similarly, only one year ago, March 2024’s ONS Business Insights report revealed 91.3% of transportation & storage firms were not currently using AI at all in their business. The latest survey reveals an uptick of nearly 10% in transport & storage companies using AI, with the number of firms reporting they don’t currently use it falling to 82.1%.

‘Of course, all industries have their fads. Investment in tech and supply chains soared before the dot.com bubble burst in 1995, which sent new tech spending tumbling. Similarly, green initiatives blossomed in the early noughties until the 2008 financial crisis, when many firms shelved their plans while they focused on survival. Crucially, the state of the global economy and race to adopt AI shouldn’t mean the end of green investment. Many green initiatives, such as recycling and switching to renewable energy, can also significantly reduce costs for all industry sectors, including transport & storage. It shouldn’t be an either/or situation.

‘AI technology and carbon reduction initiatives can work together to improve customer experience and cut pollution. As one example, you can discover more about how significantly greener home delivery options are compared to shopping by car by reading Parcelhero’s Study “Which is Greenest? Home Deliveries or Traditional Shopping?”: https://www.parcelhero.com/research/greenest-study