What’s Ahead in the Logistics Arena?

Stephen DeAngelis

August 07, 2018

Supply chains have been around since humankind first began trading goods millennia ago. The global economy was built on the shoulders of trade and the legs of supply chains. Yet, the supply chain industry has been accused of being slow to adapt to changing circumstances. For example, the editorial staff at Material Handling & Logistics note, “When it comes to digital maturity, the supply chain and logistics industry are lagging.”[1] Kaushal Dave (@KDplan), vice president of cognitive solutions at Aera Technology, adds, “The modern global supply chain is defined by scale — billions of transactions and terabytes of data across multiple systems, with businesses generating more every moment. Traditional supply chain management (SCM) practices are quickly being outmatched by the ceaseless onslaught of information.”[2] Despite these protestations of sluggishness, a lot of exciting things are happening in the logistics arena.

Logistics in the Digital Age

“For an industry that is forever on the move,” writes Joe Lynch, founder and CEO of The Logistics of Logistics, “the world of logistics is in a perennial state of change, facing numerous challenges and vague demands. Staying ahead in this dynamic landscape can be quite a roller coaster.”[3] Technological advances are responsible for many of the changes to which Lynch refers. With some supply chains stretching halfway around the world, visibility has been an issue; but, that situation is changing. Technology consultant David H. Deans (@dhdeans) reports, “The online tracking of trailers, containers, rail wagons and cargo boxes is becoming increasingly common in all markets across the globe. New technology, such as the Internet of Things (IoT) and blockchain, will enable more secure automation of this activity.”[4] Keeping track of things is becoming more complex in the Digital Age. The rise of e-commerce and omnichannel sales strategies have dramatically altered the logistics landscape. As online shopping has increased, brick-and-mortar stores and malls have felt the impact. This tectonic shift has required logistics providers to concentrate more direct-to-customer operations and a focus on last-mile deliveries. Artificial intelligence (AI) is now helping logistics companies optimize their operations.

The rise of e-commerce has also resulted making warehouse construction one of the hottest areas of real estate and those new warehouses are being filled with robots. Don White, Vice President of enterprise solutions at Snapfulfil, explains, “Automation and robot technology in the warehouse has come a long way since the first automated guided vehicles (AGVs) began making warehouse rounds in the early 1950s, diligently following their wired pathways through aisles, aiding pick and putaway operations. The latest generation of warehouse robotics, autonomous mobile robots (AMRs) still perform the same functions as AGVs, moving material from location to location within distribution centers — but do it faster, smarter and more efficiently.”[5] Brian Barry, President of F. Curtis Barry & Company, observes, “Many people hear about warehouse robotics and think it’s too futuristic, yet there are ecommerce fulfillment applications being installed today.”[6] He adds, “Warehouse robotics may have another benefit when compared to sortation and other automated conveyance systems: Flexibility. We’ve seen early adopters insert robotics into an existing conventional warehouse without any changes to the physical layout such as racking.” The point is, logistics providers don’t deserve the laggard label when it comes to adapting to the Digital Age.

What’s Yet to Come?

As exciting as things are currently, there are still a lot of interesting concepts being developed in the logistics arena. Drones, autonomous vehicles, floating warehouse, airships, and hyperloops are but a few of the technologies now under development. Below is a brief description of these technologies.

Drones. Drones are being used in a number of sectors from archaeology to entertainment and they are poised to make an impact in the area of logistics. In some remote locations, they are already being used to delivery supplies. Dan O’Shea reports, “Amazon is seeking a patent on a beehive-like or cylindrical building that would serve as a vertical fulfillment center for delivery drones in urban areas. … The fulfillment tower concept also would include space at the ground level of the structures for truck delivery bays, as well as space for customers to pick up packages as part of a self-service program, according to the patent.”[7] Kushal Nahata (@kushalnahata), co-founder and CEO of FarEye, believes, “With automation and mobility being part of the support system to compete with and hopefully stay ahead of the competition, smart glasses and drones will help drive logistics performance to next level.”[8] On the other hand, Jesse Kaufman, CEO and founder of ShippingTree, sees a limited role for logistics drones. “Although it’s a trendy topic and lends itself to all sorts of discussions,” he writes, “drones are unlikely to become the dominant delivery method in the foreseeable future. Decades ago, people thought we’d have flying cars. That didn’t happen, and for many of the same reasons, your neighborhood probably won’t be crawling with delivery drones anytime soon. … Our existing infrastructure doesn’t support a drone-dominated delivery system.”[9]

Autonomous vehicles. Even if drones prove to have limited utility, Bill Meahl, chief commercial officer at DHL, believes autonomous vehicles will play an increasingly important logistics role. “We may still be a long way away from a future where trucks and ships will be controlled by artificial intelligence (AI) alone,” he writes. “But even so, preparing for a future that is more reliant upon autonomous vehicles should remain a priority for corporations that employ vast fleets across multiple geographic regions. Failure to plan for this eventual inevitability would be a mistake for players in the logistics industry.”[10] Nate Vickery adds, “Many people outside this industry don’t know that autonomous vehicles in logistics have already taken on a significant part of the logistics work process. Although there are still no autonomous trucks that transport thousands of tons of goods on the open road, autonomous forklifts, and robot arms are a common piece of technology in modern warehouses.”[11] Although Vickery is correct that autonomous trucks are not yet a ubiquitous sight on highways, they are being tested. Reuters reports, “Truck maker Volvo AB and package delivery company FedEx … have begun public U.S. highway testing of ‘platooning’ technology, which allows digitally-connected semi trucks to save fuel by driving closely together in convoy. Using a state permit, Volvo and FedEx have been conducting tests on a section of North Carolina highway 540, the Triangle Expressway, since April, running three trucks towing two trailers each. That’s a configuration FedEx and rival United Parcel Service run in a number of U.S. states — the difference here is, the test involves one driver, not three.”[12]

Floating airship warehouses. H. Claire Brown (@hclaire_brown) notes, “Bloomberg reports that Walmart has applied for a patent for ‘gas-filled aircrafts and methods of dispersing unmanned aircraft systems in delivering products.’ In plain English: a drone-launching warehouse in the sky made up of a gas chamber, a propulsion system, and a bunch of built-in parking and launching spots for individual drones. It’s basically a giant blimp. But the company is more than a full year behind Amazon, which patented its own drone-housing zeppelin in April of 2016. And there’s some indication that Amazon’s even further along than you’d think: Last week, the Puget Sound Business Journal reported the company has received a patent for the spookily titled ‘delivery shroud,’ a veil that descends from a drone once it’s hovering over your doorstep. The shroud unfurls, accordion-style, to bounce a package through its inner walls for the several feet of its journey. This is the future!”[13] In addition to Walmart’s and Amazon’s floating warehouses, Avery Thompson (@PhysicallyAvery) reports, “Brazilian company Airship do Brasil hopes its airship designs will help bring people and supplies to isolated communities in the rainforest.”[14]

Hyperloop transportation. Nick Lavars (@NickLavars) reports, “Richard Branson’s Virgin Hyperloop One has just introduced a new service called Cargospeed that, if it gets up and running, is promised to deliver cargo with airline-like speeds at trucking-like costs.”[15] The hyperloop concept in which Branson invested originated with Elon Musk. Journalists at Fleet News report, “Ten routes around the world are conducting feasibility studies for a hyperloop, including London to Edinburgh and Glasgow to Liverpool in the UK, as well as cities in the US, India, Mexico and Canada.”[16]

Summary

These are exciting and challenging times for the logistics industry. Lynch concludes, “For a logistics player, this is a do-or-die moment. The ones to adapt and move forward will be distinct. Someone who does not adapt will soon be extinct.”

Footnotes
[1] Staff, “Roadblocks Preventing Digital Transformation in the Supply Chain,” Material Handling & Logistics, 2 may 2018.
[2] Kaushal Dave, “3 steps to getting started with supply chain AI,” Venture Beat, 25 March 2018.
[3] Joe Lynch, “Uberization of Logistics Has Arrived,” The Logistics of Logistics, 30 April 2018.
[4] David H. Deans, “How IoT and blockchain is set to transform the global cargo industry,” Telecoms, 29 May 2018.
[5] Don White, “Warehouse Robotics: What’s Emerging and Where’s It Headed?Supply & Demand Chain Executive, 11 December 2017.
[6] Brian Barry, “Making A Case for Warehouse Robotics,” Multi-Channel Merchant, 27 March 2018.
[7] Dan O’Shea, “Amazon files patent for drone delivery ‘beehive’ fulfillment center,” Retail Dive, 25 June 2017.
[8] Kushal Nahata, “Trends That Will Revolutionize Logistics in 2018,” Material Handling & Logistics, 26 December 2017.
[9] Jesse Kaufman, “Will Drones Really Work in the Supply Chain?Innovation Enterprise, 18 July 2017.
[10] Bill Meahl, “An Autonomous Future: What’s the Way Forward for Logistics?” IndustryWeek, 17 November 2017.
[11] Nate Vickery, “Autonomous Vehicles in Logistics: What are the Impacts?” Cerasis, 24 may 2017.
[12] Reuters, “Volvo, FedEx test autonomous truck ‘platooning’ on public U.S. road,” Autoblog, 27 June 2018.
[13] H. Claire Brown, “Both Amazon and Walmart want giant, floating drone warehouses. But they have very different visions for the sky,” The New Food Economy, 22 August 2017.
[14] Avery Thompson, “New Airship Will Try to Tackle the Amazon,” Popular Mechanics, 11 July 2017.
[15] Nick Lavars, “Cargospeed: How 1000 km/h Hyperloop technology could supercharge freight delivery,” New Atlas, 29 April 2018.
[16] Staff, “Elon Musk’s Hyperloop concept nears reality thanks to Virgin investment,” Fleet News, 27 June 2018.