The future of distribution and local logistics

More than a century has passed since the automobile was invented and since 1913, Henry Ford revolutionized the world with his production system through that first moving assembly line for the mass production of an entire automobile, this innovation reduced drastically the time it took to build a car from more than 12 hours to two hours and 30 minutes. Unfortunately, each cause has its effect and this situation took us to the extreme traffic saturation we are experiencing today, aggravated by the increasingly worrying pollution.

The measures taken by modern societies are disparate, nevertheless they all aim for the same goal: reducing and limiting the damage that private transport is causing to the environment and quality of life. Initially, special measures were taken to encourage people to use more often public transport from suburban areas to the center of the city.

Paris created an optimal system through “layers” within the public transport, it goes around the city through a network that was built at different depth levels, at different speeds and are connected to each other only in some stations.

Sao Paulo uses a system called “rodizio” (rotation), blocking circulation during one day of the week depending on the last number of the license plate. New York uses a cost-based solution, by making it impossible for a worker to enter the city by car through prohibitive tolls. Madrid opted for a simple, drastic and absolute prohibition of circulation in certain areas of the city.

Logistics and distribution systems still face huge challenges that needs to be solved, while on the other hand they tend to grow in volume and complexity, and produces an extremely high degree of traffic congestion due to increased queueing, aggravating the speed of the traffic stream, and a high contamination since currently diesel oil is used as fuel.

We will see, without any doubts, within a near future, new distribution ways that will drastically modify existing systems used until today. Here are some of them:

• The Mini-Container. Malcom McLean has revolutionized the transport industry with his “container” invention. What seems obvious is that the idea can be extended to smaller load spaces, which allows storage capacity optimization. Malcom McLean achieved a greater efficiency of the Loading Dock Management, reduced loading and unloading times of trucks, etc. In addition, improving the standardization of the boxes used for packaging would accomplish that some of them could be used to complete empty spaces of the mini-container and in turn, some of them would complete spaces of a maritime container. Thus, improving processes, because most of them could be automized. Its implementation would be very easy and rapid if distribution costs would be penalized when carried out with non-standardized means.
• Electric delivery trucks. Advances with storage capacity for batteries has allowed a rapid evolution for the supply of hybrid electrical vehicles. It is logical to think that soon we will see small trucks with the same type of technology, this would make it viable for a small or medium sized electric truck to circulate around the city without causing pollution and occupying less space. Better yet: they could be autonomous.
• Distribution by means of different storage types. There are large distribution centers and warehousing for logistics outside the city center, some large companies have smaller centers in small industrial areas within the urban perimeter, these intermediate centers will receive in the future large trucks loaded with mini-containers that in turn, will be transferred by electric delivery trucks.
• Distribution and “hyper-velocity” (high-speed freight transportation). In one way or another we will end up seeing the hyper-speed concept being developed by Elon Musk, virgin and adif wants to introduce this kind of transportation in Malaga (Spain). The idea of Elon Musk is as evolutionary as Steve Jobs invention. Musk is investing a large part of his fortune in his "hyper-loop" project that begins to make his first real proof of concept. This futuristic tube transportation system, for the transportation of passengers and cargo at a speed of 1,200 km/hour, will need a very efficient infrastructure to handle a large amount of cargo in short times. Therefore, the mini-containers would fit in perfectly with this kind of transportation.

The use of technology plays an important key role in this kind of scenarios. Each company has a certain amount of investment capacity, so it is important for the company to know what they would gain through investments. Undoubtedly, the immediate business needs must have priority, what determines the future of the company is not the quantity but the quality of those investments. When investing, you must think about the future, preparing and training the company in order to respond to the new challenges it will have to face.

In this kind of scenario, technology plays a crucial role, especially for information technology with barcodes, tablets, all kind of sensors, efficient documentation, etc… Saving money by using ‘seemingly cheap’ solutions, sometimes made at home by amateurs, leads to failure because in the short term, we will regret lost times and resources, realizing that our company is not prepared for this kind of challenges.

Our company is our treasure and should not be handed over in inexperienced hands. Poor technology would penalize us in all aspects (operations, customer satisfaction, profitability, etc.) and it must therefore receive our maximum attention, in order to avoid painful conflicts that will appear in case no right decisions were made.

J.C. Olivares
Business Development Mgr. at DocPath Corp.