The freight and logistics sector is on the cusp of a digital revolution. Affordable advances in technology are bringing possibilities of real change, to combat inefficiencies and congestion, and increase profitability.
What are these technologies, how can they help, and how do we get them widely adopted across the sector?
In our recent article, Where’s my box? The case for improved supply chain visibility. Now!, we wrote that ‘Our systems for moving goods into and across Australia are under great stress’. We see volumes growing strongly, but so too are customer expectations; and all this in a context of rapidly worsening congestion on the roads.
It is estimated that the Australian freight task between the years 2008 and 2050 will treble, from a payload x distance number of 503 billion tonne-kilometres, to 1540 billion tonne-kilometres. Average travel speeds are worsening everywhere and the risks of coming to a complete standstill are now at very high levels. The patient is dying in front of our eyes.
Given the current stress on the sector, and the congestion on Australian roads, the only way these numbers can be achieved is by significant improvement of the system itself.
Enter digital technology
Fortunately, however, there is hope for a cure. The digital revolution is coming. Claiming it as a cure is probably a bit too strong but we do expect that through the application of computing smarts we could go a long way to improving the performance of the road network and the journey experience of all those who use it.
But computers need data, and smart programs, and they have to produce information in a form that is easy to use. The reason iMOVE exists is to help companies and organisations get the data, write the programs and help people use the information to make good decisions. In this we have, I think, green lights on those three considerations now.
Digital technology can help, through:
- Capturing data: via advances in the capabilities of sensors, with corresponding price drops
- Processing data: Greater computing power, greater and cheaper data storage
- Delivering results: Faster communications, wider connectivity and automation, real-time visibility
It’s in these areas, and with these technologies, that will see something of a revolution in the freight sector. For the first time in history it is becoming possible to home in on any point in the system. We can already electronically ‘see’ where is the truck / ship / train, and at some future time we might be able to see the box or the goods themselves. If we could add to this a real-time journey duration calculator, we would be able to to predict the arrival time of evey delivery.
When we can see the the system working, when we can anticipate the arrival of the box, and when we can avoid the blockages, we will each become more efficient and productive, and with that productivity we will be able to deliver the growing freight task.
Data — big and small
Technological advance is of benefit not only in hardware and its collection of data, but also in our processing of data — big data — using new software and analytical frameworks. These new, improved tools offer deeper and easier insight into large, complicated datasets, and an easier road to better decision making.
The importance of these tools cannot be overstated. Big data, any data really, needs to be interrogated, and its value measured. For this, IBM proffers what it calls the four Vs, in considering the validity and usefulness of interpreted data:
- Volume: scale of data
- Velocity: speed of data
- Veracity: certainty of data
- Variety: diversity of data
Taking all of this into consideration, IBM posit a fifth V — Big data, done well, provides the ability to achieve greater Value through insights from superior analytics.
“… use of Big Data could help to maximise efficiency gains, improve asset management and enhance the experience of transport users. Such advances underpin the effective delivery of a number of emerging and transformative technological developments, i.e. Cooperative Intelligent Transport Systems (C-ITS), Smart Cities, Mobility as a Service (MaaS), and Connected and Autonomous Vehicles,”
From Scoping Study into Deriving Transport Benefits from Big Data and the Internet of Things in Smart Cities, by Nikolas Hill
One more important point when we’re talking about data, big or small. To gain maximum benefits, efficiencies, savings, and advances, we often need to access bits of data from a variety of data silos. Very often the most useful insights come from combinations of data rather than a single source. We have to learn to share.
Big, open data, in freight and logistics, can lead to improvement in the following areas, at the very least:
- Operations: anticipate arrivals, accurate journey time prediction
- Network: Improving performance of key freight routes
- National: Improving performance of the national supply chain, planning infrastructure
But every journey is made up of many steps, so to make progress we have to focus on specific opportunities in front of us. We see that big data enables us close to implementation of the following improvements in the freight and logistics sector:
- Box location inquiry system
- Traffic and journey prediction
- Telemetry for all
- Automated transactions
What has Australia done so far?
Between 2014 and 2016 a pilot program was run, having a number of companies use GS1’s ISO-certified Electronic Product Code Information Service (EPCIS) global standard. It allowed the participants to:
- code up a subset of products with the GS1 unique identifiers
- capture in real time the position of each vehicle carrying each product
- share this information in real time with the downstream recipient of each item
Using this system, one company reported a 20% increase in the number of customer service enquiries it could process in a day. Another reported that rather than taking 24 hours to chase up and deliver on requests from its replenishment planner, all the information and paperwork needed was available immediately.
For the companies taking part in the project, the upside is obvious. Taking a national perspective, here’s an incredibly important set of numbers — a 1% increase in total factor productivity in the logistics industry would yield a $2 billion increase in national GDP (ACIL Allen Consulting).
Another big step has been the Federal Government’s recognition of the need for a national approach to freight and for the development of a national strategy. The Australian Logistics Council has been a leading voice in advancing the cause of the freight and logistics sector. In November 2018 these efforts will result in the Government’s release of a National Freight and Supply Chain Strategy.
“When freight is able to move efficiently, there are benefits for freight logistics operators, for consumers and for the economy alike.
The reverse is also true – delays and inefficiencies in the supply chain don’t just hurt freight logistics operators. They force consumers to pay higher prices, and ultimately act as a handbrake on economic and employment growth.
That is why the National Freight and Supply Chain Strategy is such a significant national economic initiative.”
From the Australian Logistics Council’s Freight Doesn’t Vote: Submission on the discussion paper for the inquiry into National freight and supply chain priorities
Improving the freight and logistics sector is an important task at the national as well as the local level, and one in which iMOVE wants to play a leading role.
To that end, iMOVE is currently planning a project in which participating businesses will voluntarily share a small part of their freight data, to enable individual supply chains to operate more smoothly. We expect this will lead to benefits for the individual participants, benefits for the performance of the national supply chain and a learning of how to safely, routinely and cost effectively share information.
We also want to demonstrate the impact that this sharing has on the efficiency and effectiveness of supply chains. If you’re a recipient or shipper of a large amount of freight, and would like to become involved in this project, get in touch by emailing iMOVE.
We’d love to have you on board to make positive and profitable changes to the sector.
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Author: Ian Christensen