Last mile Will logistics make its way into the networked future?

For logistics, “digital transformation” – the topic of this year’s marketing trade fair dmexco – means one thing above all else: an opportunity to be able to keep up with the enormous increase in shipments in the future. Which technologies and concepts ease the burden in this area?

The Vision Van by Mercedes-Benz Vans. (Photo: Alex Kraus/Bloomberg via Getty Images)

For logistics, “digital transformation” – the topic of this year’s marketing trade fair dmexco – means one thing above all else: an opportunity to be able to keep up with the enormous increase in shipments in the future. Which technologies and concepts will ease the burden in this area?

Logistics is one of those industries that many people only become aware of when something goes wrong. The enormous number of logistical services performed on a daily basis by service providers is illustrated by the latest figures from the Federal Association for Parcel and Express Logistics (BIEK): more than 10 million shipments were transported each day in Germany in 2016.

More and more shipments to be handled

E-commerce is developing rapidly. According to the BIEK study, 13% more B2C shipments were sent in 2016 than in 2015, whereas the previous year showed only a 10% growth. As the volume of parcels increases, so do the challenges – not least due to the strained traffic situation in major German cities and the increasing shortage of skilled workers in logistics. The pivotal question is therefore: how will the growing volume of shipments be delivered in the future – and by whom?

Current solutions and concepts are already pointing the direction in which logistics could develop in the future by making use of digitisation. Suppliers like Hermes offer end customers flexibility and transparency with mobile services such as parcel label production and shipment tracking via apps. Services such as same-day delivery and delivery of fresh food and groceries are also becoming more prevalent. But many of these services also mean greater complexity and therefore higher costs for the industry.

Change the way logistics is organised and managed

In order to survive, logistics companies have to change the way they organise and manage their services, writes the Fraunhofer Institute for Material Flow and Logistics (IML) in its 2016 ZF Future Study.

Instead of treating same-day deliveries as courier trips, these could be bundled in a fixed time window – such as between 6 and 8 pm – and delivered during collection trips in this time. And to make better use of quick trips, service providers could offer express delivery to local retailers. This concept is currently working very well for Uber in the USA: florists, bakers and boutiques can call the next free Uber car to take along a small shipment. And the German start-up Packator provides free space in logistics vehicles.

The supermarket becomes a distribution station

This example illustrates that logistics could also take place via local retailers. Delivery of convenience products and food, for example, is already being decentralised by players such as REWE. The supermarket becomes the distribution station where the customer’s order is put together. Thus, deliveries only have to be transported over short distances and with small vehicles. Or the customer can pick up the goods they have ordered – already packed and ready to go (Click and Collect).

Experts such as Jürgen Glaser, authorised representative of Süderelbe AG, say that one of the major innovation tasks of the industry is to find ways of making use of decentralised warehouses that are closer to the end customer – such as the so-called dark stores, which are small stores of supermarket size where orders are put together to be delivered or picked up. To this end, Amazon is currently experimenting with having trucks already loaded with the goods that are likely to be ordered locally (anticipatory logistics).

3D-printing is changing supply chains

The Fraunhofer IML also sees potential in the rapid development of 3D-printing. For example, German vehicle manufacturers are already using this technology in prototype production and mass production. If spare parts and other goods can increasingly be printed on site, this would change the entire supply chain – only a minimum of materials would have to be stored in regional printing centres, from where the finished parts would then be delivered to the end customers over short distances.

Delivery robots or drones – what does delivery look like in the future?

But how will deliveries be done in the future? By drones, delivery robots or autonomous vehicles? With electric cars or cargo bikes? Experts say that there will be no single answer – a variety of solutions will be possible depending on local conditions. The first pilot projects are hinting at the opportunities, but also revealing the limits of various technologies.

Take the drone as an example. As tempting as the vision might be for mini-helicopters to deliver pizza and other goods within minutes, their range is limited and there are safety concerns. And then there are also inconvenient details to thrash out: Where should the goods be dropped? How can it be done in such a way that no unauthorised person gets their hands on them? How would city dwellers react to the whirring of hundreds of drones that might become a nuisance to them? The Fraunhofer IML sees drones primarily as a niche means of transport for special goods, difficult routes and exceptional situations, such as open-air festivals.

Interaction between technologies

Mercedes introduced the concept study Vision Van in 2016 – an electric truck that carries two drones on its roof for short delivery flights over the last few meters and within sight of the driver. This illustrates how various technological approaches can interact with each other – and how technology can interact with humans.

Autonomous vehicles could also help solve the growing shortage of skilled drivers. For example, autonomous vehicles could be accompanied by couriers who do not have a truck driver’s licence.

Hermes is currently testing another innovation in the area of autonomous driving over the last mile with the delivery robot of the Latvian start-up Starship Technologies. These robots are currently being used in London for picking up returns and parcels. The collection takes place in a 30-minute time window of the customer’s choosing. The Fraunhofer IML sees potential for this method mainly in smaller and medium-sized cities, where the robot has more room for manoeuvre and tech-savvy city escapees appreciate this clean, quiet means of delivery.

All these concepts are proof that digital transformation is contributing to more decentralised logistics with increasing networking.

 

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