New technology and power sources could revolutionise logistics
In retail, much is made of the demand for flexible and even same-day delivery. However, this sector isn’t alone, with the need to find cost-effective solutions and new efficiencies evident throughout the logistics and supply chain industry.
Changes to transport as we know it – such as vehicle electrification and the rise of automation – mean that many firms will need to adapt swiftly to survive. Nevertheless, this also presents an opportunity to reinvent and future-proof supply chain management, with knock-on effects for spending and sustainability.
Read on to find out what today’s businesses are asking supply chain providers for in terms of transport, and how the intelligent supply chain can better answer those needs.
The need for flexible solutions
Increasingly, logistics customers are asking their logistics partners for flexibility. They have to satisfy requirements for niche offerings, meaning that supply chain providers must do the same. Greater agility is needed to deliver responsive order fulfillment and inventory management.
The automotive sector, for example, is one where reduced production volumes will come to co-exist with a demand for highly customised products. Drivers can already choose from colour options, accents and so on. The ability to purchase online and the development of autonomous cars may drive such customisation still further. In 2017, for example, Ford patented an autonomous car design with the option of rotating seats and a table that rises from the floor.
The ability to customise transport and logistics for individual businesses’ needs is essential. Dynamic container solutions are one example that allows firms to transport small or less-than-full-load shipments.
Taking advantage of new technologies
Wireless connectivity, AI and automation will have far-reaching applications for supply chain efficiency. Unipart Logistics are already looking at using data from smart vans to optimise inventories, vehicle size and field engineer fulfilment.
Amazon’s interest in drones has been widely reported, but this is far from the only firm looking into their potential – both for air and ground delivery. There are clear potential applications in retail, but also for the healthcare and automotive industries. Pharmaceutical companies, as well as aid organisations such as UNICEF, have noted drones as a useful tool to reach remote locations and avoid road traffic delays.
In Spain, car manufacturer SEAT has trialled the use of drones to connect a factory with a logistics centre 2km away. Deliveries by truck take 90 minutes, but a drone can deliver steering wheels and airbags to the assembly line in just 15 minutes. The drones have rechargeable batteries, use renewable energy and produce lower CO2 emissions.
In the US, the Federal Aviation Authority has granted permission to tests of drones outside the operator’s line of sight (currently outside FAA regulations). This represents an important step in the expansion of drone services, and potentially a sign of things to come.
The green agenda
The drive for sustainability is beginning to show clearly as a factor in consumer decision-making. [LINK to ‘Why we need to remove single use plastic from supply chains – not yet published] Its influence on the future of transport is not just limited to domestic vehicles. For the supply chain, here are some of the areas to watch:
Electric and zero carbon vehicles
In the UK, the Advanced Propulsion Centre will award a combined total of £25.4 million to British projects aimed at developing zero-carbon automotive systems. Winning projects include development of hydrogen fuel cells for large vehicles, as well as an electric bus drivetrain that reduces energy consumption. The government’s 2019 legislation committing to net zero carbon in 2050 indicates a clear commitment to new transport methods.
Hyperbat is a joint venture between Unipart Manufacturing Group and Williams Advanced Engineering. This joint venture is the UK’s largest independent electric car battery manufacturer, and creates a secure future supply chain as the UK automotive industry makes the switch to electric power. In addition, there is potential to provide similar solutions for the aviation and marine transport sectors in the future.
According to research consultancy Frost and Sullivan, the market for full electric trucks and light, medium and heavy-duty hybrids is expected to reach annual sales of 2.25 million units by 2025. It’s thought that as many as 60% of these will be sold in China, which has high levels of subsidy for electric vehicles.
There is strong interest in natural gas and hydrogen power alongside electric options. Hyundai is just one manufacturer looking at both hydrogen fuel cells and Air Liquide in its new concept ‘tractor-trailer’. Tesla is also taking reservations for its own electric truck, the Semi, expected to begin production in 2020.
Transport bans for city centres
This year, Bristol became the first UK city to tackle its high levels of air pollution by banning private diesel cars between 7am and 3pm. Commercial vehicles will have to pay to enter the exclusion zone, which will fine drivers of any vehicle except taxis and emergency assistance. London already has a low emission zone affecting most of Greater London, 24 hours a day. Although the Bristol scheme doesn’t yet have government approval, it paves the way for similar programmes to come into operation elsewhere.
Consolidation centres are regarded by many as a crucial concept in modern logistics. If anti-traffic measures such as Bristol’s diesel ban become the norm, they will play an even more important role.
Based in strategic locations outside major cities, consolidation centres solve the problem of lack of on-site storage space. They also allow logistics firms to prevent build-up of traffic: an estimate from WRAP, the Waste & Resource Action Programme, suggests that consolidation could reduce traffic to and from building sites by 70% during a project’s busiest stages.
An additional efficiency is the chance to better coordinate deliveries, such as optimising vehicle and container loads and scheduling. Unipart’s Coventry logistics centre records and monitors live tracking for our temperature-monitored trailers for NHS Supply Chain, supporting the NHS in its responsibilities under the EU Medical Device Regulation (MDR).
What will the future of transport look like?
There are certainly changes afoot for the logistics industry. On the one hand, the future of transport will mean investment in a modern fleet of connected, more energy-efficient vehicles. On the other, a greener, more cost-effective supply chain doesn’t just mean looking at transportation, but in effective management of how resources are used.
It’s worth noting a statistic from Ultima Media analyst Daniel Harrison. He told delegates at the 2019 Automotive Logistics Central and Eastern Europe Summit that 18% of emissions are attributable to the automotive supply chain, rather than vehicles themselves.
Although R&D is essential to find the most valuable transport methods, there are other, more immediate ways to improve efficiency and environmental impact. An example comes from automotive first tier supplier Bosch, which found it could achieve 1.7 times lower energy consumption by switching from passenger to cargo aircraft. Future transport methods could create exciting benefits, but they must go hand-in-hand with the gains found by assessing the design and management of the supply chain itself.
If you’d like to learn more about ways to develop and future-proof your supply chain, read more on our Supply Chain Insights page.