Technology adoption 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 the Multimodal Transport. With the advent of e-commerce all over the world, Multimodal Transport is quintessential for the effective transport of goods & services all over the continent.

The 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. Reference

Logistics Industry in India

Logistics 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.

Logistics Performance Index (LPI) is a tool to benchmark the logistics industry which is developed and maintained by the World Bank 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 on a maximum of 5.

Source: – https://lpi.worldbank.org/

India’s LPI rank and scores over the years show a fluctuation with the highest score and subsequently best rank captured in the year 2016. To improve the overall logistics of the country, India should aim to rank below 20. 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 of organizing the largely unorganized sector in the country. These and many others provide a steady source of employment to many.

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 that it still has ample room to improve. 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. Since, the ports, cargo airways and road networks are developing and growing stronger, logistics is following suit.

Upcoming trends in Logistics (2020 and beyond)

Technology is making its effect felt in all domains of our lives and Logistics is no stranger to this phenomenon. 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 married to logistics to provide value addition to all its stakeholders. Since it is difficult to cover all the ten key trends, only the five most important are covered –

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 internet, sensors and software.

  • Proposal- Since IoT devices need an underlying internet connection all the time, a strong Wi-Fi in the surrounding environment is preferred. Speed of data transfers with the advent of 5G would significantly decrease latency. This technology would be particularly helpful in logistics of perishable products
  • Usage- Sensors built onto containers or RFID tags that help monitor the product 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 well to their advantage. Artificial Intelligence is one of the buzzwords of the present times that is thrown around a lot.

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

3. Blockchain- Satoshi Nakamoto’s creation is finding new uses and can be used ingeniously in logistics management as well. In spite of the fact that the workings of Blockchain is largely unknown by the general public, due to its complicated technicalities, it is still in industries used all around the globe

  • Proposal- The open ledger system can be appropriately used in sharing sensitive data across the logistical journey of the product/asset. No third-party software or companies would be needed to interface at multiple points, instead a network of seamlessly updating ledgers would take the place
  • Usage- From enabling card-less B2B payments to 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- TheUSA based start-up,ShipChain manages 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 completely thereby saving precious resources thus enabling increased productivity, efficiency and reduced overhead costs and errors

  • Proposal- There is a lot of manual, repetitive tasks in logistics and that can easily be tackled by implementing RPA. It is worth noting that RPA includes human processes and intervention as well amalgamated with technology.
  • Usage- There are many examples-
    • Using RFID tags within the logistical process to locate a product instantly
    • Automatic invoicing, automated inputs of purchased orders
    • Prevent the counterfeiting or smuggling of important assets using appropriate sensors
  • Start-up in the field- Actimai combines big data, AI along with RPA to provide customized 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 to hilly or 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 organization. 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. Multimodal Transport, by virtue, uses technology and some of the technologies used 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 utilization of infrastructure leading to customer satisfaction
  • Terminal & Port ICT- This technology reduces the unloading and loading times at terminals, improves the utilization of the terminal infrastructure, achieves seamless transfer of cargo through efficient interfaces between transhipment points and reduces operational costs

Conclusion

The future of logistics depends as much upon development in the channels (air, water and road) as development in technology. Although covering each and every aspect of these technologies is outside the scope of this article, it tried to at least give a preliminary view of how technology is currently changing or in the few will continue to change the face of logistics management all over the world.

References

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