How Technology is Changing the Future of Logistics

By Natalie Sauber, Market Intelligence & Mobility Solutions Lead, Arcadis

Natalie Sauber, Market Intelligence & Mobility Solutions Lead, Arcadis

Re-shaping the logistics system

Changing consumer expectations, new market entrants fuelled by new technology, and new business models are revolutionising the logistics industry. In today’s world of one click / one day delivery, customers want a seamless, fast and free omni-channel shopping experience. This whatever-whenever-wherever approach means that goods must travel from multiple pickup locations such as distribution centres and warehouses, to various destinations, including private homes, office, stores or lockers. This change in the logistics landscape is connected to a variety of emerging technologies.

Artificial Intelligence and Machine Learning

With the volumes of data in supply chains and logistics growing every day, the need for more sophisticated processing solutions has become increasingly urgent. Being able to track items and people throughout the process can create tremendous value in the form of efficiency gains and cost reductions.

Internet of Things (IoT) track-and-trace allows for assets to be tracked throughout the entire supply chain. Analysis of this data lets companies identify patterns, predict consumer preferences and identify potential breakdowns in the supply chain. Combined with on-going evolution in areas of technology like artificial intelligence (AI), this has the potential to bring in disruption and innovation not only within logistics but across the entire business environment.

The Rise of Robotics

Some of the most eye-catching advances have been made on the software side, but also robotics has seen vast improvements and is now closely linked to emerging software. Robotics has long been considered a futuristic technology, but the supply chain is full of its many application, from autonomous forklifts that move inventory within the warehouses to tracking and locating the same goods across the entire supply chain. These are fuelled by deep learning algorithms, which allow the robots to perform autonomous tasks throughout the different processes in the warehouse. According to Amazon, robots can reduce warehouse operating expenses by roughly 20 percent, so the potential benefits are huge.

Harnessing the power of new technology to ultimately improve the customer or end-user experience will be one of the most important drivers for the future of the logistics sector

3D Printing– Print or Ship?

The idea of 3D printing isn’t new; in fact, the concept has been around for several decades. However, only recently has it become reality: from auto manufacturers printing spare parts, to fashion brands printing part of their clothing and shoes, all the way to the 3D printing of human organs. The possibilities are extensive, with exciting new breakthroughs and applications being announced virtually every day.

From First to Last Mile: Driverless Vehicles, Drones and Robots

As logistics goes digital, profound changes are coming to industry structure, operations and profits. New technological possibilities – particularly in the Connected and Autonomous Vehicles space- coupled with the digitalising of the retail market has led to the emergence of new delivery methods, including ground last mile robots and aerial drones.

One of the latest start-ups to join the last mile delivery race is a San Francisco start-up called Marble. The company has developed “intelligent courier robots” designed to reliably and securely transport goods that are accessible to everyone, including groceries, prescriptions and package delivery. This exemplifies a step-change in the deployment of ground bots, thanks to the application of AI to intelligent courier robots. Meanwhile, FedEx is partnering with the likes of Walmart and Pizza Hut to test last-mile delivery robots.

While each of these can transform parts of the logistic industry, jointly they can fundamentally reshape the entire sector.

Couriers, retailers and restaurants are experimenting with robots, drones and self-driving cars in a bid to use automation to drive down the high cost of delivering goods, groceries and even cups of coffee to the end customer.

During 2018, we saw numerous leading global retailers trialling unattended in-home delivery services. Edeka, Waitrose & Partners and Albert Heijn all joined Walmart, Amazon, Jet.com and ICA with trials in their respective markets.

If we take a holistic view, the future doesn’t look dissimilar to the current state; the journey of a parcel from its origin to its end point is broken down into first, middle and last mile. The only change here is automation at every step of the supply chain; driverless trucks ferry the parcel between major central hubs before it’s then shuffled to a local warehouse by a driverless vehicle and finally dropped off with the end customer via drones or ground robots.

Leading through Uncertainty

We’ve covered just a handful of the many new technologies currently impacting the logistics industry, and while all of the above mark significant steps forward, this approach is also far too simplistic.

The benefit of autonomous technology does not lie not in its ability to fit within the current distribution model, but rather to reshape it. Harnessing the power of new technology to ultimately improve the customer or end-user experience will be one of the most important drivers for the future of the logistics sector. Understanding how we can use these innovations to improve productivity, efficiency and experience will not only be integral to the evolution of the industry, but will define its very existence into the next decade and beyond.