The Future Of The Logistics Industry
For the transport industry change is nothing new. While today we’re looking ahead to a future of driverless vehicles powered by electricity, back in the early 1900s we saw the transformation from horse and cart to motorised vehicles. It’s no surprise then that to be successful in this industry you need to embrace change, adapt and innovate, but what does the future of shipping and logistics look like?
Digitalisation is the process of leveraging digitisation (the process of converting information into a digital format making it easier to preserve, access, and share) to improve business processes.
Naturally embracing digitalisation can have a tremendous impact on an organisation but as we’ve seen in recent times, for companies that are slow to adapt it can spell disaster. You only need to look at world famous brands like Blockbuster to see what happens to companies who are too slow to change. It’s therefore critical that companies embrace innovation and continue to evolve so that customers benefit from the latest technology developments.
It’s no different in the shipping and logistics industry which is heading into a new era of transparency through digitisation. So much so that digitalisation is a vital part of the future strategies of shipping lines, logistics companies and freight forwarders who can use digitisation to improve processes and redesign services, products and business models.
Digitalisation will change the way that customers interact with businesses, and this can already be seen in the way consumers shop online (sometimes with same day delivery) and the way we can order transport via a smartphone app. But how is digitalisation already impacting the logistics industry and how will this change the logistics industry in the future?
There are a number of automation based solutions that are already solving some of the everyday challenges within logistics. While some of these solutions are still in their early stages, we can expect innovation in automation to radically transform the way we work in the coming years. Here are just three examples:
- Challenge: The introduction of 20,000+ TEU mega-ships has led to the significant disruption of landside operations and inconsistent workflows at ports.
- Solution: Container cranes at Maasvlakte 2 in the port of Rotterdam are now un-staffed and almost entirely automated.
The operation at Maasvlakte 2 shows that automation in this scenario works, and inevitably this technology will be implemented at ports all over the world in the future.
- Challenge: Latest estimates suggest a 50,000 driver shortage in the UK, which will potentially increase post-Brexit as some East European Drivers leave the UK labour market.
- Solution: Autonomous vehicles are expected to be common within the next 10 to 15 years.
- Challenge: There are 100,000 EU workers currently working in the UK warehousing industry. This source of labour will be potentially restricted after Brexit, and on top of this, an additional 8 million square foot of warehousing space was taken up by fulfilment centres in the UK in 2018.
- Solution: Amazon has its own Robotics Division (Amazon Robotics) and has more than 100,000 robots operating in its fulfilment centres around the world.
Developments in Automation
Blockchain could completely transform the logistics industry by replacing some of the slow, paper-based, manual processes that have been operational in the logistics industry for years, and the industry is already working on ways to improve operations with this technology.
Maersk and IBM, for example, are working on cross-border, cross-party transactions that use blockchain technology to improve efficiencies, and the ports of Rotterdam and Antwerp are working on blockchain projects to streamline customer interactions.
According to The LoadStar, August 2018 saw the first ocean container use of a blockchain-based bill of lading that was released successfully in the port of Koper, Slovenia. This shows that in the not to distant future, new technologies such as blockchain could make the process of international shipments much quicker and more efficient.
City Logistics is the process of optimising logistics and transportation activities in urban areas using advanced information systems considering traffic environment, congestion, local air quality, energy savings, emission zones and safety within the framework of the market economy.
In April 2019, London will see the implementation of Ultra Low Emission Zones (ULEZ) (£100 charge per truck per day accessing this zone). Other UK cities will also follow suit in 2020. ULEZ congestion charges will no doubt increase the cost of urban deliveries.
Urban Rail Terminals of the Future
Network Rail plans to develop a series of mixed-use, multi-storey developments in London that focus on the creation of urban logistics terminals using high-speed trains for freight services. Many of the UK’s major stations have under-utilised legacy assets that could be used for city centre hubs.
Dedicated train services are capable of transporting high volumes of goods (250 roll cages per train) reliably and quickly to city centres. Network Rail has already started to move small volume consignments utilising adaptable carriages on existing off-peak passenger services and zero-emission vehicles, or cycle couriers can be used to achieve final deliveries.
This video case study shows fresh fish being moved from Cornwall to London using passenger rail services. Not only does this help local businesses transport their product efficiently into major UK cities, but it also reduced the environmental impact when compared to other transport alternatives.
No-one knows for sure what the future will bring. The “Back to the Future” films predicted that there would be flying cars by 2015 – that has so far failed to transpire (although they would be convenient in today’s congested traffic network!).
What is certain is that unprecedented change and developments are now commonplace in our industry and that embracing new technologies and innovation is essential. With warehouses embracing robotics, the trialling of drones for deliveries and the testing of autonomous vehicles, there’s no doubt that technology will continue to have a positive impact on our industry.
At John Good, we’ve been adapting to change since 1833, and we are committed to doing so for many more years to come.