The world is on a digital shopping spree. Online shopping is more popular than ever, and customers are becoming ever more demanding. Be it stocking a constantly changing variety of goods or making environmentally-friendly deliveries in record time through congested megacities, logistics companies must prepare to face tomorrow’s challenges.
From Christmas reindeer sweaters to fair trade organic coffee and freshly picked flowers, the choice of products on the Internet seems infinite. And after having clicked, customers wait for the fast delivery service to ring the door bell.
In Germany, around 67.6 percent of the population bought goods online during 2016, and the trend is increasing. The world reached a global milestone in 2017: for the first time, half of earth’s inhabitants were online – and the number is on the rise. In addition, the global middle class will more than double between 2009 and 2030 according to an EU study. In summary this means there will be more people with Internet access who can afford to shop online – and will actually do so.
On the other hand, what customers don’t appreciate at all is a long wait before the goods arrive. The DHL parcel service reports that 85 percent of all online shoppers attach the greatest importance to quick and reliable delivery; 50 percent of the respondents said they had already aborted online purchases because the delivery options were too slow. Same-day delivery or next-day delivery are already offered by large retailers, but next-hour delivery is going to be the future standard.
Anyone who uses a car in the rush hour and tries to drive quickly through a large city will understand the challenges posed by these express delivery options. Therefore, experts are trying to work out quicker and more efficient methods of delivery and new types of warehousing.
“The warehouse of the future will be as compact as possible so that it can fit into any available space, with self-learning robots to make it flexible,” says logistics expert Michiel Veenman from the Swiss automation company Swisslog. That’s because smaller warehouses are easier to locate close to residential areas. Urban distribution centers reduce the length of delivery trips, and save time.
With such flexible future technology concepts, automated warehousing systems can also be more quickly modified, so changes to the product range are no longer a problem. “The fashion industry has particularly short product cycles, with the assortment of goods changing continually,” Veenman explains. Self-learning robots and software solutions help us manage the sheer endless diversity of products. The support provided by logistics robots can also overcome the problem of staff shortages in the industry.
Flexibility is immensely important, because the future “sharing economy” won’t only be of interest for cars or music. Following this principle, warehouses could also be shared flexibly rather than purchased, taking the form of modular units that can be re-assembled like building blocks in a construction kit, and intelligent robots which immediately recognize a new renter with different products and then invoice their work on a service basis. Pay-per-pick instead of costly permanent storage.
This way, players in the fiercely competitive logistics market can respond to extreme fluctuations in demand. The Fraunhofer Institute for Materials Flow and Logistics has addressed the topic of urban logistics, and suggests using multi-story car parks, for example, as temporary warehouses when millions of people press the “Buy Now” button on their smartphones shortly before Christmas.
The “last mile” to the customer could also be shared. When dozens of drivers with half-full delivery trucks drive along congested streets heading to the same address, this has an impact on the environment and infrastructure – and on the vendor’s balance sheet. An efficient “shared last mile” with electrically powered delivery trucks would therefore not only save costs for the logistics companies but also reduce the burden on cities and the environment.
“With people and politicians increasingly expecting not only functioning but also clean, quiet and unobtrusive logistics, it is inevitable for logistics companies to address electromobility and new means of transport,” says Prof. Uwe Clausen, Director of the Fraunhofer Institute for Materials Flow and Logistics (IML). “Delivery concepts without a driver in the vehicle for certain parts of the route will be really exciting,” according to Clausen’s prediction. “Stationary retail business will persist, but it will have to reinvent itself to keep customers interested.”
We can only speculate on how the cities of the future will look, and on the pattern of our future shopping behavior. DHL has investigated various future scenarios in a study. Will we have access to a 3D printer in our own neighborhood, printing our desired products, just as nowadays we print our photos at the local drugstore? Will we live in megacities which function only through efficient logistics and where people rent things instead of buying them?
“Altogether, the study clearly shows that the role of logistics will change strongly in the coming decades. That applies to all the scenarios described in it,” says Deutsche Post CEO Frank Appel in an interview about the study. “Common to all of them, however, is a highly encouraging message, especially for our industry: the demand for logistics services is set to grow in virtually all cases.”
Ideas for future logistics
- Warehouse airships
In late 2016, a big online dealer made headlines when it became known that it had patented the idea of computer-controlled tethered airships. The plan: tethering the warehouse airships close to the city, where they would act as bases from which drones fly the goods to the customer.
- The flying parcel service
Roads may be clogged, but airspace is clear – that saves time and cuts distances. This is the reason logistics companies are testing deliveries by drone. These small aerial vehicles would be capable not only of delivering purchases to city dwellers but also of flying goods to inaccessible places or transporting medication for humanitarian purposes.
Underground pneumatic tube system
Like a mole: several companies and start-ups are exploring the idea of delivering merchandise and goods via underground tunnel systems. This would allow products to reach their destinations without congestion or diversions, taking the burden off the streets and the environment at the same time.
- One vehicle, many options
Some ideas address the possibility of extending car sharing to include the delivery of packages. Either the person renting the car could take the package with them on their journey and receive a discount on the car sharing charge, or autonomous vehicles could use their parking time to deliver packages.
City logistics is undergoing radical change. Read the blog article Smart Cities and intelligent networking – sustainable logistics for cities worth living in to find out what sustainable logistics for cities worth living in can look like.