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January 25, 2018

Why collaborative logistics has a key role to play in the emergence of the physical internet

Imagine if you could move physical cargo across continents as effectively and smoothly as a computer moves data.  This is the groundbreaking concept of the physical internet and a philosophy that logisticians and academics hope to integrate into real-world freight supply chains by 2050.

And many believe that innovative freight exchange platforms, schooled in maximising payload efficiency and reducing empty miles, can play a role in making this embryonic vision of the future a distinct and game-changing reality.

Take Professor Zach Zacharia, an Associate Professor of Supply Chain Management at Lehigh University, part of team developing a Handbook on the Physical Internet, for instance.

Professor Zacharia - freight exchange platforms physical internet

Professor Zacharia says, “I believe that collaborative logistics platforms demonstrate and validate the need for the physical internet, and in many ways they are fore-runners to it. But that is not to say, that freight exchanges will die out. On the contrary, as technology advances, the most innovative freight exchange platforms could, I believe, help to mould the interconnected and collaborative freight landscapes of tomorrow. If they succeed, this will ultimately lead to more efficient, effective and sustainable freight supply chains.”

Change won’t happen quickly…

But Zacharia, who is working in partnership with Professors’ Benoit Montreuil and Eric Ballot, the early pioneers of the physical internet, to write a book on the subject, is keen to stress that the seismic change, which some predict the physical internet will bring, will not happen overnight.

But when the physical internet finally begins to affect real change, how exactly will it, and the leading-edge collaborative logistics platforms it supports, positively impact on the freight industry?

Says Zacharia, “By 2050, the physical internet will change the way we think about the movement of freight. In 30 years’ time, data-centric freight exchanges and intelligent multi-modal cross-docking hubs, will allow hauliers not just to move cargo effortlessly by road, rail, by sea or by air, but to seamlessly change carrier, or even transport mode in real-time. How? Well, if the freight exchange, calculates a delay midway through the journey, or simply discovers a quicker or cheaper way of getting goods to market along the way, it will automatically re-route the consignment... This high-level of visibility will be possible with the core foundations of the physical internet in place.”

Modular Containerisation: the next quantum-leap

Spool backwards to today, however, and Zacharia says that the catalyst for change must begin with the standardisation of physical load carrying infrastructure.

Zacharia explains, “In order for this paradigm shift to take effect, and before interoperable logistics hubs, with intermodal visibility, can even begin to hold sway, the forty by eight-foot shipping container needs to be re-imagined. It is simply not malleable enough for the multi-dimensional supply chain landscapes of tomorrow.”

How modular containerisation will revolutionise the movement of goods…

So how exactly will this standard template change to meet the requirements of the Information Age?

Zacharia, says, “…Take the path of a file being sent by the internet, for instance. Whenever we send a large data file, it is first broken down into small packets of information, which are routed through the fastest network stream available. The file is then recombined into one document before being read by your device. The next step in the journey to implement the physical internet, therefore, is to apply the same thinking to containers.

Continues Zacharia, “An extensive corpus of research has been conducted, and concept studies are currently underway. The latest findings show that the containers of tomorrow are likely to be intelligent RFID-chipped containers, which can be broken down into eight separate, different-sized standard modules that can fit together like Lego blocks into one single 40-foot container.

So can he paint a picture of the future?

Says Zacahria, “With the data-driven freight exchange platforms of the future able to harmonise intermodal freight movements, a shipment of goods could be broken down into eight separate units. Each module could then be prioritised depending on the customer’s budget and delivery time requirements.

Zacharia continues, “And at the final destination - like a Lego brick – the smart container is re-assembled, and its empty capacity status flagged in real-time on the collaborative logistics platform so that it can be utilised promptly. Freight exchange platforms too could also provide “the collaborative data bridge” that enables different manufacturers to share a modular container, therefore increasing capacity utilisation and significantly reducing transportation costs.”

Multi-party stakeholder collaboration needed…

However, if the physical internet is to revolutionise freight supply chains, Professor Zacharia, thinks that “it will require a myriad of stakeholders including local and national governments”.

Some three-thousand miles away in the United Kingdom, it is a view shared by Philippa Oldham of the Institution of Mechanical Engineers (IMechE).

Philippa Oldham - collaborative logistics

Oldham, who as head of transport and manufacturing, recently authored the groundbreaking paper, ‘UK Freight: In for the long haul?’ explains, “In Britain, the study, which was based upon a series of workshops, involving influential stakeholders from road, rail, sea and air, highlights the need for a joined-up intermodal strategy. If the UK wants to remain a major force in world trade circles, then it must invest in a robust and resilient data-led transport systems. In the next 30 years or so, it is perfectly logical that the collaborative logistics platforms linked to the physical internet could potentially be a central cog in balancing the cross modal transport systems of tomorrow. But this can only be achieved with the backing and financial support of the UK government and industry.”

Oldham, who spent six years as a senior product manager for defence technology company, QinetiQ, before joining the IMechE, adds, “Developing smart standardised intermodal containers, and other key cross-modal friendly infrastructure such as intelligent cross-docking hubs can play a part in the world-class logistics set-ups of the future. But there are many more barriers to entry that government needs to lower before we reach this point.”

So what are they?

Oldham explains, “While the National Infrastructure Commission is making positive strides in addressing intermodal imbalances, but in the future it, together with industry, needs to do more to address poor route selection. For example, seventy-six percent of freight is moved by road while only nine percent finds it way on to Britain’s rail network (by mass).

Continues Oldham, “There is also the issue of wasted road journeys to bear in mind too. And this is further exacerbated by the fact that 91 per cent of goods entering Britain by sea are funneled through either Felixstowe or Southampton ports in the south of the country. However, it would make far greater sense to route more cargo through Liverpool Port, as 65 per cent of the UK population live within 150 miles of it.

“If this lack of balance was corrected, it would help to eliminate around 150 million wasted miles annually. In the future, data-centric freight exchange platforms will help logistics operators to transact utilising a real-time picture of intermodal freight movement, but it needs a long-term government cross-party freight strategy to truly unlock the door to innovation in the first instance.”

 

End Notes and Sources

UK Freight: In for the long haul

By Philippa Oldham

June, 2016

IMechE

ETP-ALICE

The Alliance for Logistics Innovation through Collaboration in Europe (ALICE)

http://www.etp-logistics.eu