Transportation: Port and

Shipping
EY Solutions & Sector Trends
October 2023

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 EY serves the leading Transportation & Logistics companies through its global footprint

8,000+ professionals across the EY transportation business by region

firm focused on transportation serving

over 1,500 global clients

Key segments served
Americas EMEIA APAC
• Trucking including Truckload (TL) and Less-
than-Truckload (LTL)
~36% ~48% ~16%
• 3PL / 4PL service providers
• Parcel shipping including eCommerce
• Global freight forwarding (air and ocean)
• Value added warehousing and distribution
• Ocean freight carriers We are where you are
• Marine port infrastructure and operations
• Airlines including passenger and cargo
• Heavy and light rail

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 EY teams have extensive experience serving all types of Transportation & Shipping requirement

Logistics Ground Ocean & Terminals Aviation

• Heavy rail
• Ground freight (TL, LTL) • Marine ports and
• Highways • Air cargo / freight
• Warehouse terminals
• Mass transit forwarding
• Forwarding and brokerage • Ocean freight
• Toll roads • Airports and terminals
services • Services and MRO
• Rental cars • Aircraft leasing
• Parcel and post
• Vehicle fleets • Airlines
• Last mile
• Rideshare & delivery
• Fleet Decarbonization
services

Public Sector Transportation Infrastructure / Private Equity Embedded Transportation

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 EY teams have a deep understanding of critical issues in the sector

Transformative issues impacting transportation clients

Rising freight rates Constrained capacity Surge in energy prices

New truck orders remain low despite
Unprecedented increase in shipping Energy prices have risen significantly, by
strong demand and capacity constraints.
freight rates – up 7x on average compared 10x in some geographies, compared with
Similarly, warehouse capacity is
with pre-pandemic levels due to strong 2020 due to increased global
crunched as a result of historic growth
consumer demand consumption and supply constraints
rates

Acute labor shortages Sustainable transportation

Skilled and Future-Ready Labor Shortage, During COP26, various global logistics
and is workforce participation is down companies pledged to use zero emission
~6% since the pandemic began transport by 2035-40

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 Logistics :The sector will continue to witness strong growth despite near-term challenges
Port & Shipping
Industry Size High demand for transportation & Adoption of advanced technologies to
logistics to continue play a key role
• Adoption of digital technologies (such as
Indian Logistic Market (In $ Bn) • The global transportation & logistics sector RFID, drones, blockchain etc.), autonomous
is expected grow by ~10% in 2022 as the and electric vehicles to accelerate
strong demand for the sector continues. sustainability, efficiency in operations and
– ~8% mitigate labor costs.
AGR 320 • The rise in e-commerce is expected to
C remain elevated relative to pre-pandemic • Digital freight forwarding start-ups -
215 levels, supporting growth in warehousing shippers are leaning on the evolving digital
and postal services. forwarding start-ups

FY20 FY25F
Supply chain bottlenecks Trucking capacity constraints
~8% likely to persist
4.6 Bn ~14%
Tonnes of freight Logistics costs as CAGR expected • The global supply chain crunch is expected • As OEMs face order backlog and
transported annually a % of GDP till FY25
to continue longer than originally thought manufacturing constraints due to chip
due to the increased demand and port shortages, truck orders are expected to
remain low despite strong demand.
44th 4-5% ~67% congestion.
• Demand-side pressures that had caused • Trucking freight rates are further expected to
Un-organized market increase, fueled by labor and capacity
Rank in the global Logistics Wastage due to freight delays should ease this year, with
share of road logistics
Performance Index (PLI) inefficiencies as % more supply capacity coming on stream. constraints.
GDP

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 Regulations & Policies are governing market transition in future for Warehousing and Logistics
Industry Port & Shipping
India intends to raise its ranking in the Logistics Performance Index to 25 and cut down the logistics cost from 13% to 8% of GDP, leading to a reduction of
approximately 40%, within the next five years

Vision@ 2047 and its relevance in the logistics sector

General Policy Reforms affecting the Warehousing &
Logistics Industry
A unified tax system, removed inter-state
GST
barriers enabling smooth flow of goods from
one state to the other
Gati Shakti
Road Logistics infrastructure
• Build 32,000 km of expressway & highways
4 1 • Invest US$6t (INR 480-490 lakh cr.) for urban infrastructure
development

Dedicated It is a high speed and high capacity railway Rail infrastructure development
Freight • Invest ~US$1.7t (INR 135-145 lakh cr.) over 25 years
Corridor corridor that is exclusively meant for the
transportation of freight • Target 40 -45% railway share in freight transport by 2030
(DFC)
Maritime infrastructure
Infrastructure status granted to the logistics • Increase port capacity by four times to 10,000 MTPA
Infrastructure
Status sector which enabled the sector to raise
capital at lower rates Air infrastructure development
• Develop 20 new airports on aerotropolis approach

National Development Programs Multi-modal and logistics hub

3 2 • Reduce logistics costs by augmenting cargo speed by two to three
times
Aimed at accelerating economic development • Build more than 70 multi-modal logistics parks
Sagarmala
Program in the country by harnessing the potential of
India’s coastline and river network. Digitalisation of logistics Integrated digital
Technology Integration National systems ,Unified Logistics Interface Platform
Logistics
National Highways constitute ~5% of Road network, Will enable tax officers to undertake live Policy
E-way bill Regulatory framework Transform logistics ecosystem
Infrastructure making it imperative to strengthen (EWB) vigilance in respect of E-Way Bill compliances by 2022 to meet global regulatory standards
Pipeline connectivity with ports and key locations. system businesses, stop revenue leakage and will facilitate
movement of large goods vehicles.

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 C-Suite Imperatives: Navigating Transportation and Shipping in the Future
Port & Shipping

► Mergers, Acquisitions, and Partnerships

► Increase focus on sustainability & ESG including
► Focus on e-commerce growth ( vertical emissions, energy consumption, and waste
integration) reduction, carbon footprint etc
► Factors impacting in adopting alternative
fuels in logistics ► Cost reduction (Direct / Indirect) ► Digital tools for emission visibility
► Fleet decarbonization ► Revenue diversification & fund requirements ► Sustainable Packaging and Materials
► Demand-capacity imbalance ► Supply Chain Agility ► Social Responsibility
► Shift towards green operations ► Talent Management/ Workforce Shortages ► Governance and Compliance

► Impact of Digital Personal Data

► Automate Processes and Analytics Protection Bill, 2023 (DPPB) in
Strategic transportation sector
► Blockchain Integration Planning
Alternative ► Third party risk management
► Demand Forecasting Fuel Sustainability
► Warehouse Automation Strategy & ESG ► Cybersecurity
► AI and IoT based solutions to improve Digitization & Regulatory ► Regulations & its reporting
supply chain visibility Technology Framework
► Geo-political challenges
 We provide solutions to transportation clients across their value chain

Business Model,
Manufacturing, Technology & Finance, Tax &
Strategy & Customer, Culture, Talent Enterprise
Supply Chain & Digital Global Business
Transactions Product, Service & Workforce Protection
Global Trade Transformation Services
& Innovation

NextWave Supply Chain Agile Business

Manufacturing NextWave Auto Audit of the Future Digital Strategy &
Reinvention (inc Smart Future of Work Transformation (Finance
Customer Experience (external) Transformation
Strategy & Innovation Factory) Transformation)

NextWave Mobility Risk (Internal Audit &

Cost Optimization Workforce & org Tax and Finance
Digital Twin Controls Intelligent Automation
Strategy & Innovation (Direct & Indirect) planning Operation support
Transformation)

Product & Service Logistics Control tower Tax Technology and

Reshaping Results Workforce Engagement Fraud & Forensics Cybersecurity
Innovation (Inbound/ Outbound) Transformation

EY Asterisk : End-End
Rapid Profit HR Technology ERP System Planning Global Business
Advance Data Analytics Digital Supply Chain Enterprise Resiliency
Transformation Transformation and Implementation Services
Planning Solution

Commercial e2log - Digital

Mergers & Acquisitions Integrated Logistics HR Mobility Trust by Design Legal managed services
Transformation
Management System

Route/Mode
Alternative Fuel Strategy Optimization Sustainability & ESG

Sector Enabling Platforms (Innovation Center, Alliances, Managed Services, D&I, sustainability)

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 Our Clients in Transportation Sector

Logistics Ocean & Terminals

Ground Aviation

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 Unlocking Opportunities: EY's Comprehensive Value Chain Expertise for the Transportation Sector
Fields of Play

Strategy & Tax & Finance Customer, Growth & Technology & Audit, Risk &
SCM & Operations
Transactions Sustainability Cybersecurity Governance
Clients*

*Not Exhaustive
 Select Credentials (1/3)
Port & Shipping
Sustainability - Alternate Fuel Strategy &
Supply Chain & Operational Excellence
Fleet Decarbonization

Developing a city/cluster roadmap for Optimized the fleet routes E-commerce Logistics Visibility Solution
Apex body of CV manufacturers

Leading US Logistics Provider

Advanced manufacturing and
alternate fuel vehicles

mobility industry
• Conducted primary survey to develop a wholistic • Developed a blockchain solution to improve the
• Reduced Distribution Costs
point of view on future adoption of fuel type visibility for ecommerce orders
• Optimized Team Assignment:
• Detailed analysis of alt. fuel infrastructure & • Elimination of burdensome and manual
• Simulations of different optimization
feasibility reconciliation across the network on order tracking
scenarios
• Analysis of impact on cost, performance & • Value chain optimization leading to significant cost
• Simulations of different optimization
emissions reduction across value chain stakeholders
scenarios
• Scenario workshops for 2030 outlook • Increased transparency to the end consumer

Logistics decarbonization strategy and Global consumer goods company 4PL migration Port Optimization
alternate powertrain transition

Leading European Port

Leading FMCG player

• Created a logistics transformational roadmap for

Canada & US to achieve a carbon zero target by • Implemented AI, machine learning and analytics
• Supported the client to construct a 4PL outsourced
2025 based solutions to optimize port operations
model
• Roadmap included scenario across a timeline • Estimated annual economic benefits: EUR 18m
• Over 10% annual savings through logistics
covering: annually growing to 31m by 2030
consolidation
✓ Alternative fuels, • Improved container and barge planning to minimize
• Developed a strategic road map with a prioritized
✓ Emerging technologies, delays
view of benefit areas
✓ Supplier relationships, • Increased accuracy of predicting vessel departures
✓ Logistics optimization

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 Select Credentials (2/3)
Port & Shipping
Next-gen Digital CX Growth Strategy

Customer Interaction Assessment and Growth strategy and retail logistics Logistics strategy

Leading port and bulk logistics

Canadian Railway Company

Enhancement

Shipping company
• EY strategy team to investigate potential barriers

conglomerate
• Built a proof of concept, leveraging SAP Hybris, and inhibitors
• Developed strategy in terms of asset ramp up,
for the client’s Customer Interactions • Provided recommendations of a target logistics
location feasibility based on market dynamics,
• Provided functional/technical SAP Hybris model
manpower intensity and preliminary advice on best
Commerce expertise to lead the business • Modelled global trade and identified relevant
IT practices
requirements definition markets and freight flows, identifying transit
• Detailed business plan for the down selected
• Documented the Solution Architecture and potential
opportunities with man power & infra ramp up plan
supported the assessment and release planning • Provided detailed organizational design and
implementation roadmap

Real Time Logistics Tracking

Global Consumer Goods Company

Global Growth Strategy Development

Freight transportation provider

Spin-off execution support
Global Shipping and Logistics
Service Provider

• Identified growth opportunities, defined a new • EY acted as an advisor for Company A and
• Solution that provided real time visibility of in- operating model, and developed a go-to-market Company B across the spin-off execution program,
transit shipments and predictive arrival time strategy including overall SMO, transaction, and NewCo
• Significant reduction in delivery status enquiries • Outlined a strategic roadmap to achieve 11.5% stand-up workstreams
• Reduced effort and time in customer service and growth rate (vs. 4%) and become a ~$11B business • Successfully executed spin-off in 2H2021, in line
logistics answering status queries and chasing LSPs by 2024 (vs. ~$6b in 2019) with client public announcements and project
for updates • Identified high-potential pilot/partner/acquisition timelines
• Improved customer service candidates and facilitated warm introductions with 6 • Supported client on multiple fronts/topics during
of them separation

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 Select Credentials (3/3)
Port & Shipping
Smart Warehousing Technology & Digital Solutions

Warehouse expansion footprint Cloud Architecture Implementation Logistics and Inventory Control Tower
Indian Logistics parks operator

Global Consumer Products

Indian Logistics Company
• Identification of key markets for sectors (Logistics,
FMCG, Auto) and performing market sizing,
competitive, and pricing assessment with a focus on
GST impact on warehousing
• Created business plan for target based on market
inputs and analyses, arrived at revenue & and
profitability projections to assess investment
rationale
• Transformed legacy applications with a single
uniform cloud platform • Improved logistics and inventory visibility with
• Successful program management delivered for near real time updates (hourly updates)
implementation of Oracle Cloud for over 18 • Able to resolve shipment, stock and fleet status
companies of the client group proactively
• Support for a “One Company” view of information • Contributed to double digit reduction in inventory
- consistent data and consolidated reporting savings $ millions per annum
capability for over 35 business entities

Designed and implemented automated Fleet strategy Digitization & IT Enablement Digital platform design & implementation

Marketplace of trucks Co in India

warehousing and distribution centre (Logistics Process)
Global CV Manufacturer
Large Retailer

• Designed a digital interface towards customers and

• Implementation of automated processes with focus dealers • Design strategy
on order picking (more than 70% automation level) • Increased productivity by 20% • Onboarding non tech savvy truck drivers & truck
• Increased transparency in warehouse processes as • Change management execution to transform the owners on the platform
well as simplification of warehouse operations client system • Digital wireframes & clickable prototype
• Error free operations & zero Inventory stock • Developed platform that integrates and harnesses • Visual designs for all screens
difference (0.000049%) data, extracting intelligence to improves business • UX Flow document for all apps
process

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 Comprehensive suite of tools and dashboards across the logistics ecosystem
Port & Shipping
• An Intelligent Control Tower that provides visibility across geographies enabled by digital
Logistics Control Tower technologies such as Blockchain, IoT with different stakeholders collaborate in real time for
providing superior transparency and visibility

• ILMS is a Digital Integrated Logistics Management System with Integrated platform gateway for
e2Log – ILMS System all logistics transactions across Source to Payment value chain; Access to Market place ;
Provides intelligence to enable Client achieve cost/time optimization & employee productivity

• AI Enabled Cutting-edge digital platform for end-to-end SC planning with applications that are
EY Asterix integrated but can also be used as plug and play. Deployed at 26 companies across 6 countries

AM&M transactions • Provides interactive analysis of M&A deals in the AM&M industry market including
dashboard Transportation & Logistics

• It’s a ESG rating tool that rates the organization on its ESG alignment depending on ESG driven
EY ESG Compass practices in social, environmental & other governance parameters

• Monitors Scope 3 emissions and the fleet decarbonization potential along with roadmap for logistics
Carbon Footprint Analyzer
decarbonization across multiple modes of transport

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Appendix 1
Global Logistics & Transportation case studies
 We provide Rapid solutions to Logistics clients across their value chain with the “Now, Next &
Beyond” challenges (1/3)
Port & Shipping
Areas Key Interventions Typical Benefits
Digital & Customer

– Increased NPS and CSAT

CX Enhancement – CRM based pipeline review and management
– Enhanced customer retention
– Customer Journey Mapping to identify key moments of truth and improvement opportunities
– Enhanced X-sell and up-sell
– Data driven digital marketing tools
revenue
– Coaching and training for sales staff to drive front office transformation – Enhanced marketing ROI
CRM Enablement

– Market assessment to identify growth opportunities and conduct economic and technical
feasibility assessments
GTM/RTM
Growth & Cost Transformation

– Define marketing content, channels and customer services required to meet selected
customers’ goals and needs – Improved margins
– Higher revenues and profits
– Design specific sales and marketing strategies and tactics to capture the available – Reduction in costs
Revenue Growth/
opportunities at the selected customers and optimize the current GTM model and marketing – Risk mitigation and increased
Transformation
mix resilience
– Greater agility
– Embedding enterprise risk assessment and monitoring into business planning – Enhanced scalability
– Road map to efficiently manage working capital and swiftly release cash
Cost Optimization – Align debt obligations to business cash flows and organise incremental liquidity to fund
growth
– Independent business review to deliver strategic insights

16 Illustrative
 We provide Rapid solutions to Logistics clients across their value chain with the “Now, Next &
Beyond” challenges (2/3)
Port & Shipping
Areas Key Interventions Typical Benefits
– Provides visibility across geographies enabled by digital technologies such as Blockchain &
Logistics Control IoT – Reduced inventory costs
Digital SCM

Tower – Network last level visibility by different stakeholders collaborate in real time
– Lowered logistics costs
– AI-based alerts for actioning
– Real-time visibility, Predicted ETAs
Logistics Analytic – Informed decision making
– Real Time visibility of KPIs with impact
Tools: e2Log, EY – Transparency and visibility
– Timely alerts to stakeholders on disruptions
Asterix
– Predictive and scenario modelling for future

– Demand sensing and forecasting, Demand planning

Industry 4.0 – Freight benchmarking on key trade lanes – Improved service levels
– Capability for Ocean, Air, LCL, Multi-modal, Ro-Ro and Break Bulk – Reduced inventory& logistics
costs
Smart Operations

– E-commerce like experience for

– Design specific sales and marketing strategies and tactics to capture the available
B2B customers
Smart Warehouse opportunities at the selected customers and optimize the current GTM model and marketing – Enhanced collaboration across
mix internal and external stakeholders
– AI-based alerts for actioning
– Embedding enterprise risk assessment and monitoring into business planning – Informed decision making
3PL Strategy, – Road map to efficiently manage working capital and swiftly release cash – Increased efficiency and accuracy
Selection & – Align debt obligations to business cash flows and organise incremental liquidity to fund – OTIF improvement
Performance growth – Enhanced productivity
– Independent business review to deliver strategic insights

17 Illustrative
 We provide Rapid solutions to Logistics clients across their value chain with the “Now, Next &
Beyond” challenges (3/3)
Port & Shipping
Areas Key Interventions Typical Benefits

– Monitoring Scope 3 emissions and the fleet decarbonization potential

Sustainability

ESG Solutions – Reduced emissions

– Roadmap for logistics decarbonization across multiple modes of transport
– Enhanced brand image
– Mapping ESG risks and opportunities
– Higher employee morale and
– Map & record ESG performance data across the value chain
productivity
EY ESG Compass – Dashboards for ESG indicators/goals, and external benchmarks/stakeholder voice – Increased ESG Rating
– Self assessment workflow – ESG internal controls

Enterprise Risk – Organizational Vision and Redesign

Management – Cybersecurity Policy Definition & Implementation Handholding
– Enterprise Readiness with business risk assessment
– Future Readiness
– Use advanced analytics for attrition reduction – Enhanced employee performance
Resilience

Talent Upskilling – End-to-end learning technology platform to create an ideal learning cycle and close critical – Better employee experience and
competency gaps development
– Identify, measure and manage the right competencies, increasing the accuracy of selection, – Improved workforce productivity
development and succession planning decisions – Reduction in operating costs
Organizational
– Role evaluation, grading and wage optimization to improve agility
Vision Redesign
– Visualization of communication, information, and decision flow through an organization,
thereby determining the social dynamics of the organization

18 Illustrative
 In Focus: Logistics Control Tower
How does control tower improve the traditional mode of operations? What is the typical impact?

Intelligent Cost
Control Tower
Network of 40% Min
Max
Networks 30%

Reactive visibility
15%
Exception 8%
10% 10%
12%
10%

Silo’ed Visibility Handling 5% 5%

Freight Leakages Inventory Asset Utilization TLC

Service Levels
 Visibility across geographies enabled by digital technologies such as Blockchain, IoT
75%
 Different stakeholders collaborate in real time for superior visibility Min
60% Max
 Decisions are based on near-real time information
 Cognitive planning and positioning of assets for peak seasons 30%
 Intelligent Asset Maintenance and Tracking
10% 10%12% 12%
6%
2% 4%
 Converts raw data into meaningful insights for pro-active decision making
Sales skew Lost Sales TAT(Ext) Service Level Sales
 Enhanced actionable data analytics for carriers, vendors, suppliers
 Self corrective and Prescriptive ability saves time and improves turn around time

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 In Focus: EY Asterisk

Cutting-edge digital platform for end-to-end SC planning With applications SC Consulting and
AI-enabled that are integrated but can also be used as plug and play domain expertise

AI/ML and operations

research

5-layered
Built on robust and modern tech stack
tech stack Software development

6
ETL and automation
160+
Deployed at
25+ Leading
organizations
countries
Business development
Team members
with techno-
functional skills
across
Managed services
Typical outcomes

Maintenance and support

Visibility Resilience and agility
95% 25% 15%
Scenario planning Governance
UI/UX
Improved service Reduced inventory Lowered Predictive sensing
levels costs delivery costs

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 In Focus: e2log

ILMS is a Digital Integrated Logistics Management System with the following objectives
What is ILMS  Integrated platform gateway for all logistics transactions across Source to Payment value chain
 Access to Market place thereby access to wider base of logistics service providers & price discovery
 Ability to provide intelligence to enable Client to achieve cost and time optimization and employee productivity

 Price Discovery through Market place (Public & Private) to enable Client to identify cost & time efficient logistics
Price Discovery
services across different buying channels (Rate contract/Spot Buying/Preferred collaboration)

One Platform  Digitization led process empowering Client’s logistics function across all modes - Road /Rail/Sea/Air
for all Modes  Pre approved/Qualified vendors in the Market Place, ensures Client standards of service delivery is adhered
 Consolidation potential of consignment due to single platform for logistics procurement
ILMS Single version  Commercial and regulatory documentation is available in single platform
of Truth
Advantages  Track & Trace functionality provides regular updates on consignment location
Supports  Supports Analytics such as suitability of rate contract in the frequent used routes, inputs for logistics planning
Intelligence  Management dashboard for logistics on key metrics
 Single version of truth on logistics vendor performance
Enabling Strong
Governance  Transparent system enabling Client governance standards

ILMS = Input + Intelligence + Platform

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