‘New CSRD legislation provides an excellent opportunity to start a conversation with customers’
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Transition is high on the agenda for business owners. Only by continuously adapting their business to a rapidly changing world can they stay relevant. But business leaders have a lot on their plates: the energy transition, a wave of digitisation and a new approach to transport and logistics. We discussed this last topic with Bart Banning, Transport and Logistics sector expert at ABN AMRO, who explained how important it is to have a long-term vision and be well informed.
Bart, the logistics sector is the lifeblood of society. What developments have you noticed in recent years?
That’s right. Businesses in the transport and logistics sector literally set and keep everything in motion. When COVID broke out in 2020, we suddenly found ourselves in an unprecedented situation. Ships could no longer travel, and ports such as Antwerp, Zeebrugge and Rotterdam did not have containers coming in all the time. Everything literally ground to a halt. And if the logistics sector comes to a standstill, so does the entire supply chain. It’s only at a moment like this that you see how crucial transport and logistics are.
Did the sector suffer badly from this?
Understandably, the impact in this sector was immediately huge and very clearly visible. Yet the sector showed enormous resilience. For the first two months everything literally stood still. Things quickly started up again afterwards, though, and the standstill was of course followed by a very definite catch-up period. World trade has actually grown enormously, and the logistics sector has been able to cope with this well. There is considerable renewed appreciation for the sector, which has shown that it can handle this. However, I believe that the challenge lies in the near future.
What do you think these challenges are?
In the past, transport and logistics meant physically moving a product from one location to another. Nowadays there is so much more to it than that. Digitisation has had a big impact on the management of logistics processes. It offers new opportunities for companies to optimise processes and make other strategic decisions on the basis of data. The energy transition means that businesses need to look for solutions to reduce CO2 emissions from vehicles powered by fossil fuels, because in the medium term a switch will have to be made to zero-emission systems and electric means of transport. So that’s a really big change. Given that only 79 fully electrically powered trucks were sold in Belgium in the first half of 2023 out of a total of 4,800 trucks*, you have to conclude that there’s still a long way to go.
How do you start on such a big task?
Success or failure depends on a strategic vision, actually. On a carefully considered plan. And that’s not always straightforward. Most entrepreneurs in the transport sector are operational thinkers: How can I serve my customers as quickly and as flexibly as possible? But a switch is needed to medium-term thinking: the next three to five years will be crucial. What are we going to focus on? What can my customers expect from me? How will I contribute to sustainability as part of a complete logistics chain? How do I involve my customers in this?
A radical change in ways of thinking?
Absolutely. In the transport sector people often talk about small profit margins. Everything has to be faster and cheaper. That stands in the way of a great deal of potential. Real change only comes when you reap the benefits of investments and cooperation in the supply chain. To make the chain more sustainable, efforts must be made to achieve the greatest added value. And that requires an investment of time, money and innovative thinking, of course.
What can businesses look to ABN AMRO for?
Our job, actually, is to ask the right questions from a viewpoint that is critical but constructive. That way, you can map everything out and identify problems. In other words, we’ll help companies in the thinking process behind the plan, but we’re not going to work it all out for them. That’s up to the business owners themselves. If you’re a logistics company, of course, it’s always important to segment properly according to customers’ profiles and wishes, so that you can make strategic decisions and work as efficiently as possible. The energy transition is an example of this. It requires a strategic approach to your fleet management. On what scale are you going to electrify your fleet, and when? And how are you going to organise the energy supply? There are logistics companies that are installing their own charging hubs, including the appointment of an energy manager. But it all depends on the company’s needs. The advice would never be identical. Our goal is to help a company become future-proof – in the very broad sense of the term.
You talk about the expertise we have from the sector. How do we get this?
We have a lot of sector expertise within ABN AMRO. We publish reports on the issues that concern our customers, discuss those issues with them, appear on stage at events, and advise our internal colleagues on shaping our own policy. As a financial institution, we have a big responsibility to make the transition a success. By working together with companies and understanding their business, we can really make a difference.
The podcast also referred to smaller companies. They are going to find it harder to afford these large investments. What would your advice be to them?
I would say to them especially: don’t let the train pass you by! Now is the moment to climb aboard and determine your strategy to future-proof your business. If you don’t focus on this, it won’t be long before you go under. Aside from your own motivation to become more sustainable, the regulations are also increasing. Take the upcoming Corporate Sustainability Reporting Directive (CSRD). This is an international regulation that has come out of the Green Deal and reports on the way in which companies deal with environmental, social and governance (ESG) issues. With reference to the environmental theme, it requires shippers and logistics companies in the chain to report on their CO2 emissions. More specifically, this reporting is divided into Scope 1, 2 and 3 emissions. It’s important for logistics companies to realise that a customer’s Scope 3 emissions are caused by the emissions of their suppliers, including logistics activities. Logistics companies will therefore be approached by their customers to provide a statement of CO2 emissions and to join them in thinking about how the reduction path will be mapped out in the years ahead. This is a concrete example of how logistics companies also need to adapt their strategy to this issue in order to respond to the changing needs of their customers.
It’s a huge challenge...
You could look at it like that. Or you could even see it as a threat. But it will also be a brilliant tool for logistics companies (large and small) to take the initiative and seek cooperation with customers. It actually offers a framework for developing and implementing sustainable improvement processes together with customers.
But of course I realise that business leaders have a lot on their plates and can’t do everything themselves. That’s why I would also advise them: seek knowledge from the experts. Whether it’s your accountant, your sector association or your bank, ask for help from those who know the most about it. In Flanders, for example, there is FEBETRA (the Federation of Belgian Hauliers and Logistics Employees). They have a lot of knowledge and expertise. Special attention is paid in this context to smaller companies. They too must embrace the transitions, but often lack the capacity. And it’s precisely these smaller companies that we will continue to greatly need in order to future-proof the sector. They often form the ‘flexible shell’ of the world’s medium-sized and large transport players, so we really have to give them as much assistance as we can.
Are you optimistic about the future of transport and logistics?
I am pretty optimistic. The logistics sector plays an important role in society and for companies in other sectors. We’re seeing at the moment that companies increasingly want to become more sustainable – based on intrinsic motivation, and not just to comply with the regulations. That’s an important development! It’s also reflected in the labour market: the young generation prefers to work for businesses that are seriously committed to this. But again, the starting-point is vision and strategy. I am pretty optimistic. The logistics sector plays an important role in society and for companies in other sectors. We’re seeing at the moment that companies increasingly want to become more sustainable – based on intrinsic motivation, and not just to comply with the regulations. That’s an important development! It’s also reflected in the labour market: the young generation prefers to work for businesses that are seriously committed to this. But again, the starting-point is vision and strategy.
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Mobility and Transport
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Sustainable business
Corporate Social Responsibility
ESG
Sustainability
