- Transport digitalisation is shifting investment toward multimodal logistics automation and connected, AI-enabled infrastructure, with logistics automation projected to grow to roughly USD 150–260 billion by 2033–34.
- EU policy is accelerating deployment via major public funding, including about €83 billion from the Recovery & Resilience Facility for smart transport and over €7 billion in 2023 CEF grants.
- Highest value sits at the intersection of physical assets and software (digital twins, predictive maintenance, interoperable data platforms) that can add recurring revenues to capex-heavy infrastructure.
- Key constraints to scaling returns include skills shortages, fragmented regulation and standards, interoperability hurdles, and cyber/privacy risk.
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The transport sector’s ongoing digital transformation offers layered investment opportunities, but requires careful sector-by-sector calibration. Large-scale fintech-style returns are more likely in logistics and supply chain automation, where the current market trends show hardware still dominates but software and services are becoming increasingly critical.
According to multiple market reports, the global logistics automation market, including hardware, software, and services, is projected to grow from mid-2020s base values of USD 40-90 billion up to USD 148-260 billion by 2033-34 depending on scope and growth assumptions, with North America and Asia-Pacific leading in growth rate and market share. For example, in the U.S., the market was USD ≈ 7.9 billion in 2025 and expected to reach ≈ USD 25.7 billion by 2033 at ~16.2% CAGR.
Public policy in Europe is aligning with these private sector trends. The EU’s Recovery & Resilience Facility (RRF) has committed approximately €83 billion to smart and sustainable transport across member states, representing some 12.8% of its total envelope. The Connecting Europe Facility in 2023 selected 134 projects receiving over €7 billion in grants, with ~80% of funding going to rail, inland waterways, and TEN-T cross-border connectivity, including digital/ITS systems and alternative fuels infrastructure. Also, EU’s “Digitalising Transport” policies are investing in common mobility data platforms, edge/cloud infrastructure, 5G corridors, and AI regulation frameworks for high risk systems in mobility.
Strategic investment hotspots include digital twins for infrastructure monitoring and operations; AI/ML for predictive maintenance, crew scheduling, fuel or energy optimisation; mobility-as-a-service and multimodal transport platforms; IoT sensors and connected infrastructure; and the hardware/software combination in robotics, AGVs, smart terminals, and ITS. These are especially profitable where recurring revenue models (e.g., SaaS, data monetisation) overlay traditional capex heavy assets.
Risks and open questions remain: the digital skills shortage persists, with many regions unable to support data-fluency and systems thinking needed for deployment [initial article]. Regulatory fragmentation and lack of standards across regions/sub-sectors complicate scale. Interoperability among platforms, proprietary vs open systems, and cybersecurity/privacy are under addressed. Environmental impacts need regulatory alignment. Finally, total cost, timelines, and internal change/culture are often underestimated—especially for large infrastructure owners transitioning gradually.
For private investors and infrastructure funds, the implication is to seek exposure in projects where public policy provides matching grants or guaranteed revenue support (e.g. green bonds, sustainable transport tenders); to partner with technology firms that can deliver both hardware and software; to build or invest in platforms that scale across geographies or modes; and to build internal capability (skills, regulatory & standards know-how). Portfolio risk should encompass regulatory, technology obsolescence, and social acceptance dimensions.
Supporting Notes
- Global logistics automation market projected to reach USD 148.76 billion by 2033 with CAGR ≈ 16.8%, base value ~USD 44.0 billion in 2025.
- Other estimates find USD 217.26 billion by 2033, growing from USD 65.25 billion in 2023 with CAGR about 12.8%.
- U.S. logistics automation market valued USD 7.93 billion in 2025, forecasted to reach USD 25.67 billion by 2033 with ~16.2% CAGR.
- EU Recovery & Resilience Facility members are committing ~€83 billion for smart & sustainable transport, ~12.8% of RRF funding, with Germany, Spain, and Italy accounting for the largest country allocations.
- In the 2023 Connecting Europe Facility call, over €7 billion will support 134 projects across rail, inland waterways, roads, and smart traffic systems under the EU Sustainable and Smart Mobility Strategy.
- EU policy of “Digitalising Transport” highlights investment in 5G corridors, common mobility data space, AI regulation (including high risk systems), cloud/edge infrastructure with contributions from CEF/RRF, staff training, and oversight of interoperability.
- EIT Urban Mobility pledges to mobilise EUR 75 million for sustainable mobility infrastructure by 2027, support 700+ start-ups/scale-ups, and deliver 164 innovations.
- Large public grants in EU (e.g. TEN-T, ITS, Solidarity Lanes, etc.) favour projects that combine infrastructure modernisation with digitalisation/non-steel assets.