In all production, there will be transportation of goods or commodities from one location to another via rail, air, roads, and water. From an industry perspective, it is truly global, and a key component in every supply chain, after all no business can operate without the transport of their goods to consumers, or the commodities / components required for production. The Benchmark International highlight that as an industry it is not slowing down anytime soon, with it being forecast to grow to $18.69 billion by 2026 reaching $$6.55 trillion by 2027.
What does this mean for responsible business?
Due to its structure, there are added complexities for due diligence. The sector is a complex web of interconnected businesses based on highly organised logistical, and contractual arrangements across multiple continents and legal frameworks. Key challenges for due diligence include:
- Multiple tiers of subcontractors, often operating in regions with weak governance and labour protections, make it difficult to trace the full journey of goods. This opacity creates opportunities for exploitation and abuse to go undetected.
- Mobile workforce composition - The transport and logistics sector employ a highly mobile workforce. Drivers, warehouse workers, vessel workers and other personnel may move frequently, making it challenging to monitor working conditions and identify potential issues. Additionally, the nature of the industry can lead to irregular work patterns, making it difficult to enforce labour standards.
- Lack of internal commitment or leverage – Businesses focus due diligence on their own operations, or production, often excluding due diligence within indirect or ‘operational’ supply chains, as a result, the T&L sector is often overlooked within businesses social compliance programs.
With the introduction of regulatory frameworks, businesses will be asked to start looking at addressing due diligence within this sector. Our recommendations include taking a multifaceted approach:
- Companies must demonstrate a clear commitment to human rights and integrate them into their business strategy. If they are not already doing so, Human Rights and Sustainability teams will require tough internal conversations to bring the T&L sector into scope of their due diligence programs.
- Collaborating with workers, NGOs, and industry peers to address challenges collectively. The recent International Transport Federation (ITF) and New Look MoU highlights how key stakeholders in this sector and social dialogue can be engaged to improve working conditions.
- Disclosing human rights efforts and performance to build trust and accountability.
- Regularly reviewing and enhancing human rights practices to adapt to evolving challenges.
Finally, using technology to gather worker feedback is critical with a mobile workforce. Find out more about how our diginexApprise technology was built for hard-to-reach workers by booking a demo with our team. https://www.diginex.com/apprise
