What is the future of logistics?

Thu | 3 Aug 2023 | Interviews

What is the future of logistics? Where will we be in 10 years?

5 Logistics experts about the future of transport execution management

This year, Simacan celebrates its tenth anniversary. In these 10 years, the field of transport execution management has undergone tremendous developments and seems far from having reached its end station. What lies ahead? What will logistics look like in ten years' time? 5 Simacan experts give their view on future developments for logistics from the perspective of their specialism.

Rob Schuurbiers

Transition towards self-driving trucks

What logistics development do you see emerging?

Physical Internet

"My vision of the future is a world with electric and self-driving vehicles. And all the data regarding these vehicles, e.g. location, freight and traffic data are processed real-time to continuously maximise vehicle utilisation. This whole process is referred to by scientists as the Physical Internet. It may sound futuristic, but it is the direction in which we are heading. We want to move towards a sustainable society with the least possible inconvenience and waste of scarce resources. Clean and silent self-driving trucks that supply shops and DCs, preferably at night, are - in my opinion - the ultimate step.”

"When people think of autonomous transport, they mainly think of the vehicles themselves; driverless trucks, crammed with electronics, sensors and algorithms, that can communicate independently with other vehicles and systems. But it becomes really interesting when the entire supply chain is digitised. Then the capacity of vehicles can be optimised 24/7 and transport flows can be perfectly connected. But this is only possible if all transport data is complete and available so that systems can autonomously and continually plan and reschedule."

What will this mean for transport execution management?

Strict data protocols are needed

"Transport becomes completely data-driven and the human factor is taken out. Think about it, this is big. You can easily send a human driver on their way with incomplete information. They can think for themselves, assess situations, interpret data and make decisions. You don't have to spell everything out for them. So it is no problem if there are gaps in the information you give them, or if it is of a low quality. With a driverless vehicle, it is a completely different story. All data must be 100% complete and reliable! And IT systems must be able to communicate with each other.”

"Autonomous transport will have to be tightly regulated by governments. Definitions will have to be precise and 100% correct of which vehicles are allowed to drive where and when. To start, a transport execution management system or platform will have to be constantly and realtime aware of all these external constraints. In addition, the specifications of all vehicles and consignments must be known so that the system can check whether the applicable preconditions are met. Obviously, this information should not be in Excel or PDF files, but stored according to data protocols to which the entire industry adheres."

What can organisations do now to become future proof?

Start with improving the quality of your transport data

"It will take some time before autonomous transport becomes a reality. This transition will take decades and will be in phases. I think the main issue will be whether people trust the ‘decision making' to systems and dare to leave the operational transport decisions to computers. A way to gain trust for this process is with simulation. We should start with visualising all the trips of one day, incorporate the planning, and see how it was executed, what human decisions were made, etc.. and then compare with what would have happened if this had been decided by IT systems.”

"Organisations can start with improving their transport data. With autonomous transport, the input data of vehicles and shipments will have to be of perfect quality. Why not start with this now? This improvement move will benefit you as a company. For example, try mapping out all aspects of your fleet which are relevant for planning, i.e. which vehicle is suitable for what type of job. This information is often already there but in planners' heads, if you make sure this information is digital you can have planning systems do this. These systems are better at this and it makes you less vulnerable as an organisation should a planner, for example, decide to leave."

Rob Schuurbiers, co-founder and Simacan CEO
Specialisation: Geo- and traffic data

Eric Mulders

Platform economy with plug-and-play solutions for logistics

What logistics development do you see emerging?

Open IT standards for logistics

"From the beginning, Simacan has been committed to open IT standards. This allows IT solutions from different vendors to easily exchange data. The amount of time and energy being put into developing custom interfaces is a crying shame. Fortunately, more and more IT parties recognize this and are now 'opening up' their software and hardware for plug-and-play connections with third party applications. As a software vendor, it's no longer an option to tell a customer: 'I don't want you to work with other vendor's software as well.' Or: 'If you want to work with other software, you have to have an interface built for fifty thousand euros.'”

"You can clearly see in the current platform economy, all those interfaces are completely unnecessary. For example, on your smartphone, you can install any app you want in a few seconds. And it communicates seamlessly with your phone and the outside world. I foresee us moving in the same direction with transport management software. In the near future you will be able to integrate any application you want into your existing cloud infrastructure, without any problems. This will enable you to select an IT vendor purely on the basis of the value they offer. You won't have to worry anymore about whether or not it is connectable with your other software."

What will this mean for transport execution management?

100% Connectable systems

"In the world of transport management, companies have to deal with a lot of IT systems. Systems for transport management systems (TMS), planning solutions (APS), on-board computers, fleet management systems (FMS), you name it. In addition, transport companies need to be able to communicate digitally with shippers and with other parties in the chain. With so-called supply chain command centres, planning systems will be able to respond real time to execution data and updates of ETAs from their distribution network. This is only possible if all underlying systems are based on open standards and are 100% connectable.”

"This will have major consequences for relations in the IT world. Software vendors who put up 'high fences' around their products for self-protection, thus shielding their 'territory', now have to open up to outside vendors. And it may turn out that those outside vendors have a solution for (parts of) your software that is better than yours. That will take some getting used to. What matters is that customers get the best conceivable solution in the end. IT suppliers should not argue about connections but try to strengthen each other's proposition."

What can organisations do now to become future proof?

Choose software vendors without vendor lock-in

"Transport is a business of margins. For a transporter it's tough to distinguish yourself from competitors. Besides excellent operations, you will have to offer customers different data services: proactively informing end-customers about arrival times and trying to increase the utilisation rate of transport capacity. To beat the cut-throat competition, you need to have the best IT systems available, the best-of-breed application for each area of your operation. You also need to be able to switch software quickly. This allows you to anticipate new developments and customer requirements, earlier than your competitors.”

"My advice would be to choose modular and extensible systems that easily link to other systems based on (open) standards when buying IT systems. The last thing you want is to end up in a vendor lock-in and not be able to use the solutions you need due to technical obstacles. Another tip (for Dutch organisations) is to align with the standards of the SUTC when setting up your IT infrastructure. Choose a software supplier that conforms to open and interchangeable industry standards, this way you are able to remain agile and switch software relatively easily."

Eric Mulders, chief commercial officer at Simacan
Specialisation: Partnerships & alliances

Roy Stroek

Logistics must become high-level network cooperation

What logistics development do you see emerging?

Shipments are the common denominator

"Within transport chains, you have to collaborate with different stakeholders. They all look at transport execution from their own perspective. The shipper looks at it from a trip perspective, the transporter in driver services, the consignee in orders and the local authorities in environmental zones and liveability of residential areas. Everyone depends on each other, but they often clash because there are opposing interests. Local authorities demand less truck traffic in cities, but people living there want to receive more goods. Because of environmental goals, diesel trucks are replaced by electric trucks. But at this point in time, that means more transport movements. This is because the current EVs are smaller and are not able to make the same trip - without recharging the battery - compared to non-electric vehicles.”

"To balance all the partial interests, we will have to look at transport from a higher level. We need to look for the common denominator of all those perspectives and that is 'the freight'. Because that is what all stakeholders do agree on: freight or shipments have to be transported from A to B. The only question is how, and this is what to agree on. Is the execution being done with one truck, a network of trucks, via a city hub, with bicycle couriers or time slots? Just put all the options on the table and try to come up with the best solution together."

What will this mean for transport execution management?

Supply chain transparency

"At Simacan we are traditionally focused on trips: the shipper's trip planning is the starting point. From here we facilitate the collaboration process towards all stakeholders. Gradually, we will make the transition and approach towards a freight or shipment perspective. By linking transport data to shipments, the entire transport chain becomes unambiguous and clear. It’s easier to see how different stakeholders - involved in the transport of a shipment - interact. Making analysis to determine how and where to improve operations becomes much easier.”

"If you focus on the overall picture, as an individual link you will probably refrain from putting your own interests above those of others. You want to find solutions together with your chain partners to get a shipment from A to B as efficiently, sustainably and with as little inconvenience as possible. This is a different way of thinking and calls for a transition that will not be implemented overnight. It may also involve different financial models. As Simacan, we will not interfere with the latter; those are company policy choices that organisations have to decide for themselves. We provide the insights."

What can organisations do now to become future proof?

Provide supply chain partners with insights

&"My tip is to start providing your partners with insights into your transport operations. Show them how the operation is actually performing. If you provide a receiving party with these insights, they can see when their shipment is loaded and what delays you experience or expect. They will probably automatically adjust their own plans, change the time of their lunch break or other shipments accordingly. Being transparent with each other automatically leads to more understanding. It leads to exploring win-win situations together.”

"A question that pops up automatically is; who gets to make what decisions? Who gets to change the loading sequence at a DC? Who gets to decide whether a shipment can be transferred to another trip or carrier? Who gets to decide when a driver takes a break or refuels? Ownership of decisions determines how to seize opportunities. I am very curious to see which forms of collaboration will develop in the future. Moreover, I am very proud that we at Simacan can play a role in facilitating this."

Roy Stroek, product manager at Simacan

René Bruijne

Electrification of transport is a game changer

What logistics development do you see emerging?

Different way of transportation planning due to battery capacity

"The Paris climate agreement stipulates that by 2050 only zero-emission vehicles are allowed. In other words, these are fully electric or hydrogen vehicles. The reduction of diesel trucks is a huge change. Governments are taking measures, such as zero-emission zones (ZEZ) in cities and progressive transport companies are busy with electrifying their fleets. This will be incremental, with the plug-in hybrid truck perhaps acting as a kind of 'in-between'.

"The transition from fuel engines to electrically powered vehicles is a game changer for the transportation industry. It involves much more than just buying 'different trucks'. Companies will have to think about the battery capacity needed per mode of transport. Which depends on all sorts of factors. They will have to set up a charging infrastructure and look into possibly collaborating with other companies. What most transporters do not yet realise is that they have to start planning differently, taking battery capacity into account."

What will this electrification mean for transport execution management?

Energy management systems become essential

"Continuous planning and monitoring of transport movements is even more complex and necessary when using electric vehicles. When drafting plans for trips, you need to be able to estimate the available battery capacity of your trucks in relation to the trip conditions. The latter involves the distances to be covered, the number of stops, the weight of the load, the weather conditions, etc - in short, quite a complicated puzzle. You also have to take into account restrictions imposed on behalf of the local authorities, such as window times and zero emission zones (ZEZ).”

"While executing a transport operation, a transport execution management system will have to track the actual battery consumption. Is the remaining energy in the battery still sufficient to complete the operation as planned? Including intermediate stops? If the answer is ‘no’ an execution management platform will notify the planner for adjustment. A connection with an energy management system is also needed for constant monitoring of the fleet's energy needs. These need to be verified against the available energy reserves or generated in time by for example solar panels. A connection to the charging infrastructure itself is also a must; to reserve a spot at a charging station. But also to indicate how much charging capacity is needed and the minimum amount of the battery charge in order to drive the next trip."

What can organisations do now to become future proof in transport electrification?

Appoint a dedicated person for the transition towards electric

"Where to start? Organisations need to realise that this transition will also have a big impact financially. Now fuel expenses are still fairly constant but power prices will start fluctuating greatly. This is because they will depend on weather conditions - solar, wind - and whether or not your organisation generates its own energy. Suppose your operational expenses are now 17% of your total turnover, they might soon vary between 35% and 0%. Zero if you were to generate all your own energy. It’s really important to start thinking about the investments you will need to make to build a charging infrastructure or how to generate your own energy.”

"My advice is not to just start anywhere. Appoint a dedicated person within your organisation, preferably a management team member, who will shape this transition and steer everything in the right direction. Electrification of transport is too crucial and too strategic just to be a side project. If you don't manage this properly, you are out of business commercially."

René Bruijne, business development director at Simacan
Specialisation: Electrification

Silvie Spreeuwenberg

People need to start trusting AI for logistics solutions

What logistics development do you see emerging?

Artificial Intelligence in logistics

"Artificial intelligence is a hot topic. Everyone is talking about ChatGPT, deep fake and the robots that are going to radically change life in the workplace and at home. However, the underlying principles of these AI applications have been around for years. And are based on theories from philosophy, biology and algebra. During my master's degree 'Artificial Intelligence', in the 1990s, those principles were already known. What AI does today is to repeat the same trick many times until it produces a certain result. Artificial intelligence replacing human intelligence is, as far as I am concerned, a big misunderstanding. These machines are not 'creative' and cannot do anything they are not trained to do. What they can do is support, complement or enrich human skills.”

"The reason why AI is hot now is because there is an enormous amount of data and a lot more processing power available. This was not the case in the 1990s. ChatGPT can generate its own text because there are endless other texts and Wikipedia pages available on online. There is also an increasing amount of data in logistics. Transport planning software can determine the optimal trip based on a lot of constraints and data. What makes it interesting is that more and more of this data is now available in real time, through GPS and Internet of Things (IoT). AI systems can react and intervene immediately. This opens up new possibilities."

What will this mean for transport execution management?

Work processes need changing

"The application of AI to real-time execution data allows continuous planning. With the current state of most planning software a trip planning is actually already outdated before it has even been uploaded into a control tower or command center. Based on the traffic data of that moment, you can actually foresee that such a planning is totally unrealistic. With the use of AI, you can adjust the planning immediately in order to meet the agreements made. An AI system can come up with whole new combinations in order to save capacity by having two trips handled by one truck."

"With artificial intelligence considerable progress can be made, but it will take some time to get there. People need to gain confidence in these AI systems and work processes will have to change. For example, continuous planning of a trip by a computer system when a truck is already driving is very undesirable from a practical point of view. You are dealing with human drivers and limited truck availability. Updating or adjusting planning based on actual circumstances should only be done by a planner or transportation operations manager. At least, for the time being, because they are the ones in contact with the drivers. And it will be awhile before we can start combining trips from different shippers. The collaboration between competitors required for this is still far too commercially sensitive."

What can organisations do now to become future proof?

Understand how AI in transportation can improve our everyday lives

"The success of artificial intelligence hinges on the availability and quality of data. This is not so much a technical issue, as is often thought, but much more a matter of people having to trust what you will do with that data. A truck driver who feels controlled will tend to turn off their tracking system… that means no data. You have to educate such a driver and show them why sharing GPS data is important. And what the benefits are for them personally. For example in case of a delay, recipients are automatically informed. The driver no longer needs to inform recipients themselves of the changed ETA at an unloading location.”

"That is also exactly what my book ‘Artificial intelligence needs explanation’ is about. People need to understand how an AI algorithm works and why it is being deployed before they will embrace it. If you present AI as some kind of 'magic box' to your employees, they will always distrust the outcomes and not use them. That’s why you should always show users how a system comes to a particular decision. At Simacan this is one of the leading principles in the solutions we create. AI should support humans and not the other way round. This requires trust and you can't enforce that. Building trust takes time..."

Silvie Spreeuwenberg, chief information officer at Simacan
Specialisation: Artificial Intelligence
Author of the book ‘AIX: Artificial Intelligence needs eXplanation’

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