The supply chain of today is, in a word, complex. From globalized sourcing and omnichannel demand to disruptive events and ever-rising consumer expectations, it features so many intricacies that some have even likened it to a modern-day Gordian knot.
With complexity comes challenges, especially in the transportation and logistics sectors: Importers are expected to find efficient and affordable ways to move goods from manufacturing facilities — often located half a world away — to distribution centers and then, finally, into consumers’ hands. ECommerce has further complicated things, introducing new channels into the mix, and the continued market dominance of major players such as Amazon and Walmart have made same-day and/or next-day delivery table stakes. (And heaven forbid there be any sort of delay!)
Of course, the logistics industry will evolve to adapt to these various challenges, just as it always has. Even now, enterprising organizations are investing in exciting new technologies to address some of the most pressing pain points affecting transportation and logistics firms today. In this article, we’ll explore some of those technologies and their practical applications, as well as look to the future of the industry.
1. Digital Twins
Per IBM, a digital twin is:
“A virtual representation of an object or system that spans its lifecycle, is updated from real-time data, and uses simulation, machine learning and reasoning to help decision-making.”
Digital twins leverage the latest in advanced analytics and artificial intelligence technology to help organizations across all industries and verticals aggregate data from multiple sources. Organizations can then use that data to predict performance with startling accuracy and generate actionable insights that enhance business strategies.
In the logistics sector, firms can use digital twins to create virtual replicas of everything, including warehouses and distribution centers, packaging and containers, individual shipments and even entire supply chains. These digital twins will enable firms to proactively identify existing or potential supply chain bottlenecks, forecast market volatility and the potential for future disruption and optimize logistics planning.
Though digital twin technology was first introduced in 2002, recent advancements have made the digital twins of today nearly unrecognizable compared to those of 20 years ago. The concept of digital twins is also relatively new to the logistics industry, though we can expect to see them become a fixture in the next few years, especially now that tech leaders such as Google are developing supply chain-specific digital twin technology.
For evidence of this, look no further than the Port of Rotterdam, which launched its Container 42 experiment in 2019. Container 42 is a shipping container fitted with intelligent sensors and communications equipment designed to continuously record data about the container’s location and status, “including climate conditions inside and outside the container (humidity and temperature), the closing or opening of the container, vibrations, slope, position, sound and air pollution.” The container also holds a Tesla 42, which is equipped with sensors to document its movement inside the container.
Once gathered, this data is then used to create a digital twin, which the port can use to access “real-time data about the local infrastructure, water and air quality, among other things — allowing the port of Rotterdam to further improve its provision of services.” This is just one example of how digital twins are changing the transportation logistics space — we anticipate many more in the not-too-distant future, as firms devise new ways to utilize this exciting technology.
2. Sustainable Solutions
Today’s consumers are more conscious about the environmental impact of their individual choices than ever before. This is especially evident in the retail sector, in which 77% of American shoppers have expressed concern about the environmental impact of products they buy; 76% have even said that they would switch their preferred packaged good brands if it meant offsetting carbon emissions.
With conversations about climate change and corporate responsibility taking place at an international level, it comes as little surprise that sustainability has become a major trend in the logistics industry. The transportation sector, in particular, has turned its attention to cutting-edge freight technologies designed to increase fuel efficiency and reduce emissions, including:
We’re already seeing widespread electric vehicle adoption amongst industry leaders such as Amazon, which has partnered with automaker Rivian to produce electric Prime vans for last-mile delivery; General Motors, which unveiled its BrightDrop electric vehicle spinoff business in early 2021; and FedEx, which pledged to replace 100% of its fleet with battery-powered vehicles by 2040.
And the electric vehicle revolution won’t stop at just delivery vans: BNSF Railway Company and Wabtec recently announced a pilot program for battery-powered locomotives, and big rig manufacturers such as Freightliner, Volvo, MAN and Scania are finally starting to roll out long-awaited electric semi-trucks.
CMA CGM launched the Jacques Saadé in fall 2020. With a 23,000 twenty-foot-equivalent-unit (TEU) capacity, it was the world’s largest container ship powered by LNG and was to be the first of nine such ships for the French shipping company. The Jacques Saadé’s maiden voyage proved to be a rousing success, prompting CMA CGM to move forward with plans to produce a fleet of six LNG-powered vessels, each with a capacity of 15,000 TEUs, for the U.S. market. The firm also committed to carbon neutrality by 2050.
Though LNG might not be a perfect solution to the sustainability issue — the extraction and liquefaction processes require a tremendous amount of energy and produce greenhouse gas (GHG) emissions — it delivers a reduction of 99% in sulfur dioxide, 91% in particulate matter emissions and 92% in nitrogen oxide emissions.
On their air freight side of things, sustainable aviation fuels (SAFs) — fuels made from renewable and waste resources, such as corn grain, algae, forestry residue and dedicated energy crops — are really taking off. Data from the International Air Transport Association shows that, since 2016, over 370,000 flights have used SAF; that 100 million liters of SAF will be produced in 2021 alone; and that approximately 14 billion liters of SAF are currently in forward purchase agreements.
Compared to conventional jet fuel, SAFs have a significantly smaller carbon footprint, with up to 80% lower lifecycle GHG emissions. SAFs’ sustainability benefits and the surplus of available biomass feedstock have garnered the attention of major airlines, such as Delta Airlines, which recently announced a 10-year deal with Aemetic Inc., a renewable energy firm, to purchase over $1 billion in SAF.
3. Distributed Ledger Technology
When most people think of blockchain, cryptocurrency is typically the first thing that comes to mind — and understandably so. From first-of-its-kind Bitcoin to the meme-inspired Dogecoin, cryptocurrencies and their volatility have dominated the collective consciousness for the past decade. But blockchain and other digital ledger technologies have valuable applications well beyond digital currency, including those in the transportation sector.
According to a report from IBM, “Blockchain is a natural fit for inherently fragmented industries, such as transportation, in which close coordination with multiple parties is essential.” The reason for this lies in blockchain’s DNA: Blockchain is a type of decentralized database in which groups of data, or data sets, are stored as “blocks.” Each time a new data set is formed, a block is added to a chain of existing blocks. These chains help create immutable transaction records and can be used to trace ownership and payment, allowing for enhanced payment security.
Blockchain and related distributed ledger technologies offer significant benefits to transportation and logistics firms. Blockchain’s decentralized structure makes it inherently collaborative, with various stakeholders throughout a supply chain responsible for contributing data to the chain. As a result, blockchain promotes transparency and accountability and strengthens communication between supply chain partners. This underlying architecture makes it difficult to falsify, thereby enabling supply chain partners to create a single source of truth for managing global supply chains and preventing fraudulent transactions from taking place.
Blockchain is still a developing technology, one that has yet to see widespread uptake in the transportation logistics sector. That said, early adopters such as Maersk, which partnered with IBM to develop the TradeLens open source blockchain platform, are setting the industry standard for this transformative technology.
4. Cloud-based Transportation Management Systems
On-premise solutions are moving to the cloud at an increasing rate, and transportation management systems (TMSes) are no exception. And it’s easy to see why a growing number of transportation logistics firms are either migrating their existing TMSes to the cloud or investing in cloud-native TMS software — cloud-based TMSes:
5. Track-inspection Drones
Manual track inspections conducted by workers on trolleys or rail-wheel-equipped trucks are increasingly being supplemented with unmanned aerial vehicles (UAVs) — more commonly known as drones. These UAVs are equipped with cameras and sensors, which enable them to capture images, videos, LiDAR and other data and send that data to remote operators, all in real time.
This innovative use of technology has allowed for significant efficiency and worker safety gains: Rather than shut down entire stretches of track to perform manual inspections, drone operators can easily conduct full inspections from many miles away, while track is still fully operational.
Though railroads have been using UAVs for this purpose since 2015, as drone technology becomes more sophisticated, so does its applications. For example, railways can now use drones to inspect bridges while in use, which provides valuable information about how bridge elements operate while under load — information that would be challenging, if not impossible, to collect during a traditional inspection. In 2016, Union Pacific Railroad used drones to assess flood damage in Iowa for more accurate recovery resource planning, and since 2018, Norfolk Southern Railway has used drones operated by Federal Aviation Administration-certified pilots to investigate derailments.
As we look to the future, we can expect rail freight operators to find many additional uses for drone technology. Already, many railways are looking to invest in autonomous UAVs, tapping into the fast-growing autonomous vehicle trend within the logistics industry.
6. Private Mobile Networks
With the advent of 5G broadband cellular technology comes the opportunity for transportation and logistics firms to host their own private wireless networks. By operating their own mobile network — as opposed to using Wi-Fi — firms are better able to achieve low latency, strengthen signal penetration for higher reliability, dramatically increase capacity and connect devices that are both stationary and in transit.
There are already exciting use cases for private wireless network technology in major transportation hubs, including asset tracking, routing, equipment monitoring, ensuring outdoor connectivity in ports and railyards, enabling automated guided vehicles and powering computer vision apps. Shipping ports, in particular, seem primed to benefit from this technology, due to the fact that “trucks and containers are in constant motion, but vehicles stay in a defined area and do not interact with outside traffic.”
Shipping giant UPS has been one of the earliest adopters of private wireless network technology, testing out equipment in its Billings, Montana, distribution center. Though details about the initiative remain scarce, the company explained in its official filing with the Federal Communications Commission that it intends to “provide Internet connectivity to various client devices — smart phones, tablets, push-to-talk (PTT) devices, and edge routers supporting wired connectivity to computers and other network devices within a 10 kilometer radius of the site.”
Though it’s still early days yet, we can likely expect a growing number of transportation logistics firms to invest in this technology as we head into 2022 and beyond.
7. Digital Freight Matching
With the truck driver shortage continuing to create capacity constraints within the domestic supply chain, companies are looking for new and creative ways to get shipments out the door and on the road. Digital freight matching is one such method. Also known as load matching or “on-demand” trucking, digital freight matching refers to “the use of web- and mobile-based technology platforms to match shippers’ available freight (loads) with carriers’ available capacity (trucks).”
The way it works is simple: Shippers or brokers post information about the freight they need to move — including load details, such as weight, rate, distance and pickup and delivery locations — on a load board. Shippers can even streamline their search by specifying which freight mode they’re looking for: truckload, partial truckload (PTL) or less-than-truckload (LTL). Carriers then review postings and commit to loads based on their available capacity. If digital freight matching platforms sound anything like ride-sharing apps, it’s because they have a lot in common — in fact, Uber even has its own load matching platform, called Uber Freight.
Digital freight matching eliminates much of the guesswork associated with traditional load and truck posting, giving shippers and brokers access to an entire marketplace of reputable carriers. Most load matching platforms also automate the paperwork process, saving shippers and carriers the time and effort of manually faxing invoices, contracts and other documents back and forth. Certain platforms even use predictive analytics to proactively match shippers with carriers and send out automated recommendations to maximize efficiency, capacity and cost.
All told, digital freight matching platforms make it significantly easier for shippers to find domestic trucking carriers capable of moving freight for them, especially for PTL or LTL shipments, which helps to address shipping delays and capacity constraints created by the trucker shortage. As load matching platforms from companies such as Uber Freight, uShip, Convoy, Truckstop.com and PostBidShip continue to evolve, we can expect to see more advanced features — including heat maps, load tracking and various payment options — as well as tighter TMS integration.
Technology within the transportation and logistics sectors is evolving at a breakneck pace to adapt to changes within the industry and resolve its most pressing pain points. Here at Legacy Supply Chain, we’re keeping a close eye on these innovations in order to find ways to help our clients build dynamic and connected supply chains.
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