LOGISTIK Urbane Konzepte Internationales Verkehrswesen (65) 2 | 2013 25 Future of Urban Logistics Urbanisation and Online Retail to Fuel Urban Logistics Spending Urban logistics, in fact, has become even more relevant and important today than ever before. There is already a paradigm shift in how products are being manufactured (3D printing) and retailed (transition to online channels) today and the supply chain as the common denominator at all stages of a product’s lifecycle must quickly adapt to the changes eiciently. The Author: Archana Vidyasekar T he number of city dwellers is growing by the day and by 2025 we expect 3 out of 5 people to live in cities globally. Currently, an average city dweller from a developed city generates about 0.1 deliveries per day, and if we were to assume the same ratio for 2025, we are looking at a minimum of 500 million deliveries per day to cities by 2025. Given the urban challenge of making deliveries into cities, urban logistics will require greater planning and optimised operations in the future to ensure better economies of scale and higher return on investments. Developed cities, despite the best infrastructure and state of the art ports and depots, face freight delays and high levels of logistics cost. Urban logistics for the most part is concerned with the last leg of the product lifecycle - last mile deliveries. The urban supply chain mainly delivers what are essentially inished goods to cities. Finished goods, however, could be raw materials to construction companies in urban areas or inished products to retailers. Depending on the nature of the product, the urban supply chain changes the mode of transport, warehousing and other services. This variability and complexity in the urban supply chain has compelled logistics service providers (LSPs) and other stakeholders to innovate and better monitor urban freight lows as well as deine an all-encompassing strategy to manage urban logistics. Urban consolidation centres, on-the-ly connectivity, smart IT solutions, and automation, in this context, have emerged as critical diferentiators when urban deliveries have to be made. Future Urban distribution - More distribution Points than distribution Centers Over the past decade, especially, within the last mile space, the logistics industry has introduced some interesting models where the need for warehousing at a regional level has become redundant. Instead new distribution models such as transhipment areas and cross-docking points (with no warehouses), just outside city centres or at city outskirts are becoming more prominent. These last-mile models are encouraging more self-pickups than personal deliveries to their customers eliminating the need to travel longer distances within the city to reach the customer. The retail industry has always been at the forefront of fulilment innovation. Amazon, Wal-Mart, and Tesco are examples of retail stalwarts who eiciently run some of the biggest logistics operations in the world. Almost all of them have introduced in-store pick-up as a new delivery options for online orders. But one of the most innovative operations comes from a UK based technology irm that has created a whole new market space with the idea of delivering goods from the nearest store. Shutl Same-Day Delivery Shutl UK is a London based start-up launched in 2009 that ofers quick home delivery services to internet shoppers in the US and UK. Although, the company does not operate a physical leet network or warehouse infrastructure, it ofers delivery services by aggregating the capacity of various logistics providers through a unique technology platform. Shutl’s technology platform serves as a fulilment service that connects retailers with local couriers. Shutl’s service allows retailers to ofer their in-store merchandise online by letting the retailer’s customers reserve their choice of product at a store closest to them. Shutl will then assign the job to a courier in their network to pick up the order from the store and make the inal delivery to the customer. Subsequently, by leveraging the retailers own network of stores, Shutl has Die Zahl der städtischen Bewohner steigt täglich weiter. Bis zum Jahr 2025 erwartet die Unternehmensberatung Frost & Sullivan, dass weltweit drei von fünf Menschen in Städten leben. Schon heute erhält der durchschnittliche Stadtbewohner einer entwickelten Stadt etwa alle zehn Tage eine Lieferung oder Paketsendung. Geht man von der Hochrechnung für 2025 aus, ist ein Anstieg auf 500 Millionen Lieferungen pro Tag in den Städten zu erwarten. Das macht deutlich, dass die städtische Logistik neue Strategien und optimierte Abläufe braucht, um künftig noch wirtschaftlich operieren und Investitionskosten sichern zu können. Wo also sind die Stellhebel? Welche Strategien, Geschäftsmodelle und Technologien werden heute schon angewandt? Wo liegen die Möglichkeiten und Chancen einer bedarfsgerechten Anpassung - und gibt es womöglich einen Königsweg? Ein Überblick auf Basis der Studie „Global Mega Trends and Their Implications on Urban Logistics by 2020“. AuF eInen bLICK LOGISTIK Urbane Konzepte Internationales Verkehrswesen (65) 3 | 2013 26 redeined the distribution model by leveraging the physical estate and eiciency of the retailer’s own store network. Shutl’s logistics service is unconventional and breaks the tradition of warehouses. The same-day courier service that connects logistics providers with retailers through its unique technology platform is a step in the right direction towards ensuring on-the-ly connectivity and ushering in an era of information driven urban logistics. On-the-Fly Connectivity and Information driven Urban Logistics Now, in addition to be being mostly urban, people of the future will also be digitally connected. In fact, by 2025, every person will have more than 5 connected devices. This essentially means that people will have Omni channel touch points to suppliers and will order goods from anywhere at any time demanding it to be delivered quickly. Logistics must become agile and scale up to ofer such spontaneous ‘on-the-move’ deliveries. Technology, in that sense, will become more proactive than reactive (see ig. 1). Connectivity will have to seep into every stage of the supply chain process. Before deliveries, the main task is that of order picking and processing which in the future will be highly automated. It is partially automated now through conveyor belts, RFID tags and scanners - but in the future it will become robotic with small robots that can move ten times faster than the employees picking and processing the orders along the automated conveyor belts. Kiva’s Orange Robots The Kiva warehouses in the US use small orange robots that can pretty much pick and move products in a warehouse on their own 4 times faster than a human resulting in much more eicient and optimised order processing. It moves around in the warehouse using directional bar-code stickers on the loor and directs itself to the product or the order station. Major brands such as Gap and Staples are using the Kiva warehouses. In fact, Amazon very recently, in March 2012, acquired Kiva to integrate Kiva’s software with their order fulilment centres. During the delivery, route planning and scheduling will become imperative. Using traic predicting tools and predictive analysis companies can optimise their trips. Through geofencing and location based tracking they can ensure that the trip is going along as planned and in cases of unexpected disruptions or any change in plans they could use on-board vehicle telematics to have the delivery moved around. Siemens IT City Logistics Platform Siemens City Logistics IT platform utilizes RFID labelling and satellite navigation to analyse and manage the low of information between the diferent stakeholders including the manufacturers, logistics service providers, and retailers. By managing information better, Siemens IT platforms claims to shorten travel times, reduce congestion, as well as ofer environmental beneits. The ability to leverage technology and make proactive deliveries will become a key decisive factor for in delivering into cities, especially with the increasing pressures being placed by the growing market of online retail on the urban supply chain. Leveraging technology and gaining access to multi-modal logistical means is crucial to ensuring seamless and smooth urban logistics solutions. Access to Multimodality and Seamless Urban deliveries There are some interesting examples of how, cargo trams in Germany and gondolas in Venice have been put to use for delivering goods. But this of course is for non-time sensitive products. To make next day or same deliveries we need an option that is much faster and less fuel expensive than air or high speed rail. By 2025, globally over $800 billion will be spent on high speed rail projects, some of which are aiming to connect continents and not countries. Now, there are two ways in which high speed rail could inluence logistics - one, as more people shift to high speed rail it would free up more space on the road and on standard rail tracks for freight and two, it would potentially offer exclusive high speed freight services. High Speed Freight Services We already have services such as the La Poste in France, which owns around 3 TGV trains which are close to being high speed trains delivering parcels and posts. But the most interesting project in high speed rail currently, is that of the Eurocarex. The Eurocarex is a high speed train that will run from Lyon in France to St. Pancras International Station in London carrying only freight. With projects like this, there obviously will be a „modalshift“ from trucks and short-/ mid-range aircraft to the high-speed trains wherever appropriate with services tailored to meet the demands of the urban Fig 2: Logistics spending in Trillions Fig 1: Evolution of technology platforms Internationales Verkehrswesen (65) 3 | 2013 27 supply chain like next day deliveries and priority given to express freight. City governments are also actively pursuing initiatives to enable multimodal deliveries into their urban areas. Freight villages, for example, have become very prominent in Western Europe, speciically Germany. Freight Villages Freight Villages (FVs) are essentially commercial settlements of logistics stakeholders that provide access to at least two modes of transport, in particular road/ rail. FVs ofer a wide range of inter-modal infrastructure such as roll on roll of facilities, railslidings and warehouses. They have grown in prominence in Western Europe with over 100 freight villages. The ones in Germany and Italy in terms of infrastructure and service have been the most successful. In fact in Germany, of the 35 freight villages in the country, the Güterverkehrszentrum Bremen has seen the highest ranking in national freight villages in terms of capacity and infrastructure. There are about 150 enterprises in the FV Bremen and a capacity of over 200,000 loading units per annum. Key beneits ofered by multimodality for urban freight deliveries: • Higher Speed Logistics: faster than the air-road mix • Intermodal Logistics: the most sustainable multimodal alternative • Next-day delivery between continents: high-speed rail trials are mainly between countries, but there are high speed train plans being proposed connecting continents. Now, when this materialises, we may well be looking at a future where goods will be shipped within a day between continents • More fuel-eicient than Air-Road Mix • Night-time multimodal logistics: high speed trains are a much more lexible modal option as, for example they are subject to night time light restrictions So what is the Urban Logistics Market Opportunity? By 2020, we expect global urban logistics spending to increase almost three fold from $2.5 trillion today to nearly $6 trillion by 2020 driven by a sheer increase in consumer trade volume, B2C ecommerce growth, and investment in sophisticated technology for better optimisation, and higher transportation costs. Transportation and distribution activities will account for a majority of the spending at 55% in 2020 owing to increase in rising fuel costs and city congestion costs (ig. 2). Percentage of outsourced urban logistics would actually vary by city type and area. But on an average, we believe anywhere between 30% - 35% globally is outsourced in urban regions. This will grow to over 50% of the spending in 2020 as logistics providers ind methods to organise the unorganised supply chain and logistics evolves into more of a 4PL concept. The future is indicative of a shift towards smarter models of urban logistics. However, there is no homogenous strategy for urban logistics as each city represents a diferent picture in spatial pattern, infrastructure and urban setting. Nevertheless, as emphasised earlier, each city will look at unique and customised options for their metropolitan and will be more proactively involved with private logistics providers at mitigating risks associated with urban freight distribution. Delivering to cities tomorrow will therefore require customised solutions and also unique propositions for cities. Lobbying, partnership and collaboration with stakeholders will almost become imperative and necessary in the urban context. ■ Archana Vidyasekar Senior Research Analyst and Team Leader, Visionary Innovation Group, Frost and Sullivan, London archana.amarnath@frost.com Beim Senator für Umwelt, Bau und Verkehr in Bremen ist in der Abteilung Verkehr zum nächstmöglichen Zeitpunkt der Dienstposten eines/ einer Referenten/ in Bund-Länder-Verkehrsprojekte (Kennziffer 1) -Entgeltgruppe 13 TV-L bzw. Bes. Gr. A 13 Referenten/ in Kostencontrolling ( Kennziffer 2) -Entgeltgruppe 13 TV-L bzw. Bes. Gr. A 13 Referenten/ in Projektkoordination Autobahneckverbindung A 281 (Kennziffer 3) -Entgeltgruppe 13 TV-L bzw. Bes. Gr. A 13 zu besetzen. Der Leiter der Verkehrsabteilung ist zugleich Leiter der obersten Straßenbauverwaltung Bremens und vertritt die Interessen des Landes gegenüber dem Bundesministerium für Verkehr, Bau und Stadtentwicklung. 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