Europe’s Top Turn Transportation Into Strategic Advantage

The past 12 months have marked ongoing geopolitical unrest and supply chain uncertainty, as countries globally have come to terms with various new international trade tariffs. While unpredictability is the new normal, the 2025 results of Descartes European TM Benchmark Survey confirm that organisations throughout the logistics sector are no longer focused exclusively on cost cutting. Indeed, there has been a strong shift towards leveraging transportation to improve customer service and gain competitive advantage, seeing it being used as a competitive weapon.

Alongside this, investment in transport management systems (TMS) grows, as does the use of Artificial Intelligence (AI), while companies are also making progress on the digitisation journeys. The investment in automation and optimisation is paying off, with companies that have already achieved full automation demonstrating significantly better financial performance than the rest. Furthermore, these industry leading companies are building on their automated business models and using their connected TMS to embed sustainability within day-to-day operations, further extend real-time communication across the extended supply chain and explore more innovative areas of AI with various AI agents helping to detect and solve issues before they disrupt the business.

Elmer Spruijt, VP Transportation Management at Descartes explains. Customer service and technology investment drive transportation change It is also notable that European shippers have achieved greater digital maturity than European Logistics Services Providers (LSPs).

While LSPs are strongly committed to providing excellent transportation services, shippers currently outperform LSPs in levels of automation, with 71% of shippers either fully or mostly optimized, compared with 52% of LSPs, and also demonstrate a greater commitment to and investment in technology (24% of shippers will increase investment in transportation management by more than 5% over the next two years, compared with 16% of LSPs) to further accelerate change. In terms of future technology investments, 84% of shippers and 76% of LSPs will increase transportation management IT spend over the next two years.

45% of shippers cite business growth (40%) as the biggest driver for expanding the use of TMS; for LSPs (43%) the priority is improved customer service. Strategic Imperative

Following the trend seen in recent years, 2025 marked a strong shift towards management recognising the strategic importance of transportation to the business, with an additional 17% of companies treating transportation as mission critical. Just under half (49%) of companies view transportation as a service differentiator - up 11% from 38% in 2024 while 31% see it as a competitive weapon, up from 22% in 2024. The shift towards strategic advantage is strong throughout the sector.

Shippers (47%) increasingly recognise the role of transportation as a customer services differentiator, while 36% also regard transportation as a competitive weapon. Strong Financial Health It is interesting to note that the strategic emphasis on transportation highlighted above is even stronger within companies with industry leading financial health: 91% of the companies that have Industry Leading Financial Position confirm transportation is viewed as a Competitive Weapon (57%) or Customer Service Differentiator (34%).

Overall, shippers are more optimistic than LSPs, with growth in excess of 5% expected by 78% of shippers and 67% of LSPs.  Furthermore, industry leading companies are extremely positive about the next two years, with 36% forecasting growth in excess of 15% over the next two years and 52% expecting growth between 5% and 15%. Commitment to Technology Investment The correlation between financial positioning and technology investment reinforces the trend seen over recent years, with businesses continuing to signal strong investment intentions in transportation management IT over the next two years.

While the predicted change in spend remains consistent for European businesses year on year, with 76% expecting to increase investment, industry leading companies demonstrate an even stronger commitment to technology, with 84% planning to increase investment over the next two years. Shippers (84%) also confirm a stronger commitment to increasing spend on TMS than LSPs (69%). The close link between technology investment and business growth is further reinforced, with the push for business growth (40%) the joint top driver for companies expanding their use of TMS, up 11% from 2024, alongside improved customer service (40%), up 2% on last year.

Again, the shift to a strategic role of transportation is clear, with an associated drop in cost reduction pressure - the previous top driver for TMS investment - down by 6% to 33%.   Conclusion Transportation can no longer be viewed - and perceived - simply as a basic back-office function.

It is shaping growth, resilience and customer experience across the logistics sector. The survey findings show a clear divide between organisations that continue to prioritise cost control and those investing in technology and TMS to drive performance. The latter are achieving stronger financial results and building more agile, transparent and sustainable operations.

As disruption continues and geo-political uncertainty remains prevalent, the ability to operationalise technology, extend visibility and embed intelligence into daily decision-making will define competitive positioning for many organisations.

Companies that act decisively with their technology investments - both shippers and LSPs - will be better placed to manage risk, meet customer expectations and sustain growth during uncertain conditions.

Transport & Logistics Magazine - Driving The Industry Forward