- Cost and pricing pressures continue to erode already thin margins
- Poor infrastructure and excessive bureaucracy are the biggest barriers – especially in Europe
- Industry focuses on improving cost and profit structures
Despite a projected modest increase in revenue and employment this year, margins in the transportation, travel, and logistics sector are under significant pressure. Industry leaders anticipate a decline in profitability of around 3%. According to the latest industry study by management consultancy Horváth, 94% of executives cite aging infrastructure and capacity bottlenecks – particularly in roads, bridges, and rail systems – as the primary obstacles to growth.
While companies see growth potential primarily outside of Germany, half of them plan to increase revenue within existing markets rather than expand into new ones. The focus is on enhancing service portfolios through digital solutions. “Many companies are currently pursuing a stabilization strategy,” says Christian Schnöbel, Partner at Horváth. “They aim to secure their market position without taking on additional risk through expansion. This is directly linked to the high volatility in the economic and geopolitical environment. Uncertainty is toxic for investment.”
Efficiency Takes Center Stage
Compared to last year, strategic priorities among CxOs have shifted significantly. Improving cost and profit structures now ranks as the top priority – up from third place in 2024. Cybersecurity remains in second place, driven by increasing connectivity, geopolitical tensions, and rising IT security demands. Digital transformation has slightly declined in importance but continues to be a key lever for addressing demographic challenges and boosting process efficiency.
In contrast, ecological sustainability has lost considerable relevance. Only 65% of surveyed companies plan to achieve climate neutrality before 2045. While 70% formally commit to climate goals, concrete implementation plans are often lacking. “Sustainability, digitalization, and cybersecurity remain important topics – but they must be directly tied to economic stability,” says Schnöbel. “For many companies, profitability is currently the central driver of strategic decision-making.”
Infrastructure and Regulation Stifle Development
Whether road, rail, port, or airport – 95% of executives identify inadequate infrastructure, both in quantity and quality, as the biggest barrier to future industry development. Regulatory burdens are also mounting: 82% of CxOs say bureaucracy and political uncertainty are hindering sustainable performance improvements.
The politically driven shift toward rail transport is viewed skeptically. Two-thirds of respondents doubt that this transition can succeed under current conditions. “Investments in rail infrastructure are a good start, but they fall far short of what’s needed to future-proof the system,” says Schnöbel. “Policymakers must address these challenges both financially and structurally. Otherwise, large portions of the allocated investment will fail to deliver impact.”
US Tariffs Take a Toll, Geopolitical Tensions Remain a Key Concern
Compared to other sectors, transportation and logistics companies report more frequent negative impacts from US tariffs – though these effects are mostly moderate. Freight forwarders, in particular, feel the consequences indirectly, such as through reduced shipment volumes.
AI Potential Largely Untapped
Although many companies have begun implementing AI applications, the overall maturity level in the sector remains low. In data-driven decision-making especially, the potential is still largely unrealized. Only 20% of companies have fully integrated AI tools in customer service. Nevertheless, executives expect double-digit productivity gains over the next three years – particularly in middle management.
“Expectations for AI are high, but the path from pilot phase to operational integration is longer than anticipated,” says Schnöbel. “Companies that scale now can secure critical efficiency advantages and build resilience in the face of demographic shifts.”
About the Study
The Horváth study “Industry Insights – Transportation, Travel & Logistics” is based on in-depth interviews with 53 senior executives from 14 countries, primarily in the DACH region. The survey is part of Horváth’s international CxO Priorities Study, which gathered insights from over 1,000 top executives across industries worldwide.
