The Adoption of Technology in Logistics and Multi-Modal Transport

Logistics throughout the world is primarily done via three main channels- air, water and roadways. With increasing globalization, these three modes of transport now intermingle with each other to form a combined system of transportation called Multimodal Transport. With the advent of e-commerce all over the world, Multimodal Transport is essential for the effective transport of goods & services all over the continent.

This Digital Dribble article is divided broadly into 6 sections:

  1. Logistics Industry in India
  2. Upcoming Trends in Logistics
  3. Technology Adoption
  4. Technology in Multimodal Transport
  5. Conclusion
  6. References

Logistics Industry in India

The logistics industry in India is still largely unorganised and inefficient when looked at from a microscopic point of view. This section describes the current condition of the Indian logistics industry with the help of a few parameters.

 Developed and maintained by the World Bank , the  Logistics Performance Index (LPI) is a tool to identify the potential opportunities and challenges faced by countries in the domain of logistics. The list is maintained for 160 countries across the globe. The graph below shows India’s ranks and LPI scores where the maximum score is 5.

Source: – https://lpi.worldbank.org/

India’s LPI rank and scores  have fluctuated over the years. In 2018 India ranked 44th in the Logistics Performance Index. To improve the overall logistics of the country, India should aim to rank in the top 20. It is worth noting that almost all developed countries rank low on this scale.

Airports in India (2020) by volume of freight (in 1,000 metric tons)
Source:- https://www.statista.com/statistics/589187/indian-airports-freight-traffic/
Cumulative Cargo Capacity at Major Ports (in Million Tonnes) [CAGR- 18.4%]
Cumulative Cargo Traffic at Major Ports (in Million Tonnes) [CAGR à -18.4%]
Source (for both)- https://www.ibef.org/industry/ports-india-shipping/infographic
These logistics providers are at the forefront in terms of organising this largely unorganised sector of the country. They also provide a steady source of employment to a large section of society.
Source- https://en.wikipedia.org/wiki/State_highways_in_India

The graphs and the excel image paint a clear picture of the country’s logistics performance. As is visible, there is ample room for improvement.  The visible drop in cargo traffic at major ports is due to the detrimental effects of COVID-19. The average State and National Highway length is 7,069 Kms. Most of the states or union territories from Assam to Chandigarh all have below-average lengths. As ports, cargo airways and road networks develop and grow stronger, logistics will follow suit.

Upcoming Trends in Logistics

Upcoming trends in Logistics (2020 and beyond)

Technology is changing and will continue to change the future of logistics for the years to come. The 10 top technologies that will have the most impact in the coming years are:

  1. Internet of Things (IoT)
  2. Artificial Intelligence (AI)
  3. Robotic Process Automation (RPA)
  4. Last Mile Delivery
  5. Warehouse Automation
  6. Data Analytics
  7. Cloud Computing
  8. Blockchain
  9. Autonomous Vehicles and Drones
  10. Elastic Logistics

Percentage breakdown of the trends in 2020 and beyond

Technology Adoption

This section will talk about the various advancements in technology and how it is combined with logistics to provide value addition to all its stakeholders.  Here is how the top 5 trends will affect impact logistics:

1. Internet of Things (IoT)- Internet of Things simply means the provision of and the ability to connect and control a wide variety of physical objects (which are meant for normal day-to-day usage) with the help of the internet, sensors and software.

  • Proposal- Since IoT devices need an underlying internet connection all the time, a strong Wi-Fi connection is integral. The advent of 5G will increase the speed of data transfers, reducing latency. This technology will be particularly helpful in the logistics involved in perishable products.
  • Usage- Sensors built onto containers or RFID tags that help monitor the product will be used throughout the entire chain of the journey thereby helping achieve Supply Chain Visibility (SCV). Fully integrated logistics companies see a 20% rise in efficiency than non-integrated ones.
  • Start-up in the field-Fleetroot is an UAE based start-up which offers companies an IoT platform for effective fleet management. It provides fuel management solutions by generating detailed reports about fuel wastage and consumption.

2. Artificial Intelligence (AI)- AI has made huge leaps in recent years and companies have leveraged it to their advantage. 

  • Proposal- AI algorithms juxtaposed with Machine Learning (ML) help companies in a plethora of ways. Artificial Intelligence and Machine Learning are being used by companies in every field possible. The high cost of initial investment is easily justified by the cost savings and returns in subsequent years
  • Usage- Demand forecasting, optimised routes with the help of Google Maps and process automation are some of the ways AI and ML can be used
  • Start-up in the field- Adiona is an Australia based start-up that helps other companies improve their logistic processes and reduce overall costs. It also optimises delivery routes and supports complex decision making.

3. Blockchain- Satoshi Nakamoto’s can be used ingeniously in logistics management as well. Despite the fact that the intricacies of blockchain are largely unknown to the general public due to its complicated technicalities, the database is still used by industries across the globe.

  • Proposal- The open ledger system can be appropriately used to share sensitive data across the logistical journey of the product/asset. No third-party software or companies would be needed to interface at multiple points, a network of seamlessly updating ledgers would take their place
  • Usage- From enabling card-less B2B payments and tracking of perishable items, to tackling the influence of counterfeits in pharmaceuticals, blockchain is definitely a boon for the logistics industry
  • Start-up in the field- The USA based start-up,ShipChain manages the end to end shipping process by leveraging the power of blockchain. The platform provided by the start-up allows its customers to track shipment locations at every step of the logistical journey

4. Robotic Process Automation (RPA)- RPA helps in eliminating the need for humans to do repetitive tasks thereby saving precious resources and enabling increased productivity, efficiency and reduced overhead costs and errors.

  • Proposal- There are a lot of manual, repetitive tasks in logistics that can be minimised  by implementing RPA. It is worth noting that RPA involves human processes amalgamated with technology.
  • Usage- Here are a few ways RPA can be implemented:
    • Using RFID tags within the logistical process to locate a product instantly
    • Automatic invoicing, automated inputs of purchase orders
    • To prevent the counterfeiting or smuggling of important assets using appropriate sensors
  • Start-up in the field- Actimai combines big data and AI along with RPA to provide customised solutions that are optimizable, manageable and deployable to its customers

5. Autonomous Vehicles and Drones- One of the most anticipated technologies for logistics and warehousing companies is autonomous vehicle and drone technology. Once mainstream, this technology would help reduce human errors and also help connect the inaccessible terrains of any country to the mainland.

  • Proposal- Drone enabled delivery would increase the efficiency of logistics companies and would tie in with the overall technological strategy of the organisation. Amazon has even patented the idea of a floating warehouse which would have its own set of drones for easier accessibility and fulfilment of orders
  • Usage- Drones, Unmanned Vehicles and Trucks, Driverless Shipment Transport
  • Start-up in the field- A start-up from Germany called Spring offers an autonomous fleet of vehicles for transportation of goods along with analytics and intelligent systems

Technology in Multimodal Transport

Multimodal transport uses current as well as upcoming technological trends. Some of the technologies used in multimodal transport are:

Intelligent Transport Systems (ITS)-

  • Traffic Management and Information Services- provides real time traffic management offering increased efficiency and transparency
  •  River Information Services- RIS is used for the smooth and effective optimization of traffic in the inland navigation and helps in the real time exchange of information between shore and water
  • Freight response management system- This is a kind of ICT (Information and Communication Technology) that improves operational efficacy, reduces empty runs with the help of better planning of routes, improves utilisation of infrastructure leading to customer satisfaction
  • Terminal & Port ICT- This technology reduces the unloading and loading times at terminals and improves the utilisation of the terminal infrastructure, achieving seamless transfer of cargo through efficient interfaces between transhipment points. It also reduces operational costs

Conclusion

The future of logistics depends as much on development in the channels (air, water and road) as development in technology.  This article aimed to provide a preliminary view into how technology is currently changing and will continue to change the face of logistics management all over the world. Interested in reading more about how technology affects businesses? Check out this article.

References

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