Worldwide

#smartlogistics

Time for a Reboot

Tags: Connectivity, Efficiency
Freight transport by land, sea and air is rapidly increasing worldwide. The logistics system as we know it is threatening to collapse. But experts are optimistic that better integration could be the answer to improving efficiency significantly.
Martin Westerhoff, August 07, 2018
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Martin Westerhoff studied technology journalism and writes since then about vehicles and technologies. He has a weakness for motorsports and racing car.
The roar of a Boeing 747 Cargo Freighter briefly shattered the surreal silence that had reigned over the ports of Los Angeles and Long Beach for days. The pilots were headed for Japan. Below them, tens of thousands of sea containers were stacking up on the ground. And the plane’s cargo? Ton upon ton of frozen French fries. It may sound downright unbelievable, but in December 2014 it became a very costly reality for one U.S. fast food chain. At the time, the two West Coast ports were notoriously overburdened. The dockers went on strike, leaving restaurant managers to deal with the chaos caused by a serious shortage of the one thing a hamburger is simply not complete without.

Improving logistical efficiency through better connectivity

Improving logistical efficiency through better connectivity

This anecdote shows what a tightly woven web global trade really is, and the far-reaching consequences of an interruption, let alone a break, in the logistics chain. According to forecasts by the EU Commission, road, rail and maritime freight traffic is set to increase by 25 percent between 2010 and 2030. In light of this, logistics specialists are calling for urgent action. “The logistics system and freight traffic as a whole can only work efficiently if it’s sufficiently well connected,” says Majid Sarvi, Professor of Transport Engineering at Melbourne University.
Boosting communication between the means of transportation, the goods and the infrastructure is among the core tasks of a new discipline dubbed “smart logistics”. Smart logistics aims to help meet the challenges posed by a growing number of unknowns and an increasingly complex transportation chain. The transportation chain is made up of the collection chain (the “first mile”), the transit chain and the delivery chain (the “last mile”). The Department of Industrial Engineering and Innovation Sciences at Eindhoven University of Technology has defined the intricacy of this challenge in no uncertain terms. According to the Dutch researchers, smart logistics implies synchronizing four domains: a logistics system only works efficiently if scheduling, ICT, personnel and legislation are well aligned.

Under the spotlight: the last mile

Under the spotlight: the last mile

A host of current logistics developments and innovations are focused on the last mile along with upstream transfer from the transit chain – so not just on shipping but also on depots and warehouses. The reasons are twofold. First, the rapidly accelerating pace of the mail-order business, and second, the ongoing trend toward global urbanization. The net result is spiraling demand for deliveries to city-dwellers. According to United Nations (UN) estimates, 55 percent of the world’s 7.62 billion inhabitants are urbanites today; by 2050 that proportion will have risen to 68 percent.
Professor George Q. Huang, Chair of Industrial and Manufacturing Systems Engineering at Hong Kong University, outlines the situation in the vast economic area that takes in China, Hong Kong and Taiwan: “E-commerce in Greater China has exploded in the last few years, which means that delivery logistics are increasingly becoming a bottleneck.”
Indeed, more and more warehouses on various scales are springing up across mainland China to accommodate online orders. “However, they’re still using old-school logistics systems that don’t stand up to present and future requirements,” says Huang. For example, the time from receiving an incoming order to handing over the package to a logistics company is too long. Space utilization in these logistics parks also leaves much to be desired.
A networked traffic system is essential for more efficient logistics.
— Professor of Transport Engineering, Melbourne University

Process synchronization and improved coordination

Process synchronization and improved coordination

“But one of the most critical factors is a lack of synchronization between the three stages – goods manufacturer to logistics park, order compilation at the park, and customer delivery,” laments Huang. The Institute he heads up is currently working on cloud-based solutions for a project dubbed “iPark: Core Technologies of Intelligent Ecommerce Logistics Parks".
Professor Majid Sarvi is equally convinced that the logistics sector cannot solve the last mile issue alone. Rather, it’s about looking at traffic as a whole. “Transportation is a multimodal system made up of all means of transport, plus the infrastructure,” says Sarvi. Efficiency will only improve if we can network the entire system so as to coordinate and optimize it. “The same applies to autonomous cars: they only deliver advantages if they’re linked with a central data platform that monitors the whole transport business – including traffic lights and pedestrians,” he explains.

Testing tomorrow’s traffic today

Testing tomorrow’s traffic today

Melbourne University is running trials in an inner city area of six square kilometers to examine how this kind of smart transportation system might work. Sensors record the flow of motor vehicles, cyclists, pedestrians and public transportation in real time. This connected system is called AIMES (Australian Integrated Multimodal EcoSystem).
“A productive transport system is essential not just for urban quality of life but also for an economy to compete globally,” Sarvi reiterates. He sums it up perfectly, and that’s why smart logistics solutions are such a high priority for tomorrow’s society.

Streets in dire straits

According to an OECD survey, international freight transportation grew by 96.12 percent between 2001 and 2015. Across the 47 countries in the sample, haulage capacity rose from just 7 trillion ton-kilometers (tkm) to over 14 trillion. A ton-kilometer is a unit of measurement obtained by multiplying the volume transported by the distance traveled to deliver it.

In a nutshell: The global economy has developed into a tightly woven web and it is the very reason why freight transport is rapidly increasing. But a logistics system only works efficiently if scheduling, ICT, personnel and legislation are well aligned – and this is exactly what “smart logistics” aims for. A host of current developments are focused on the last mile, or the delivery of goods. Experts agree that nothing except increased connectivity can better synchronize traffic and transport systems.