Supply chains must collaborate with cities to improve logistics
- With urban freight delivery growth expected to expand 40% by 2050, municipal and business leaders must collaborate to develop smart logistics infrastructure and ensure congestion does not get out of hand, according to the 2017 MHI Annual Industry Report.
- Current planning initiatives to help curb congestion include using shopping malls as logistics hubs, establishing off-hour delivery hours, autonomous or low-emission urban delivery vehicles, establishing smaller, city distribution centers, facilitating curbside deliveries with sensors and delivering traffic information by mobile app.
- Yet, of the more than 1,000 survey respondents, 50% had not heard of a smart city. Of those who had, however, 36% said they had either begun to collaborate, plan or invest, while only 8% indicated no willingness to collaborate in the project.
Smart cities require more than just strong urban planning teams and high use of technology, but also an active and willing stakeholder participation that includes logistics professionals. In fact, supply chains may be among the industries with the highest gains from increased smart city infrastructure.
For one, recent reports and historical experience show logistics congestion can stifle any industry's growth. A recent report by the American Chemistry Council found the industry projects over $40 billion in costs from side effects of congestion, which include excess inventory from transportation delays as well as capital expenditures to renew equipment or infrastructure.
Recent examples, such as the Atlanta I-85 bridge collapse, also show how pivotal traffic management is to avoid severe transportation delays in key arteries. And of course, few could forget how the West Coast port strikes and congestion from numerous events led to severe business losses and even GDP drops at the national level.
Smart technology promises to help address some of these inefficiencies. Some port authorities boast their status as a 'smart port,' routing or scheduling truck driver access through mobile apps, or fully automating terminals to avoid in-port congestion.
However, a significant amount of congestion is due to the supply chain's last mile infrastructure, which requires small package or less than truckload delivery throughout urban zones.
To facilitate this, some researchers are calling upon the Department of Transportation to more actively share traffic, road repair and other data with trucking companies so they can more effectively plan routes and diminish transport times. Similarly, startups are proposing drones could help take trucks off small roads, and manufacturers are beginning to equip their vehicles with sensors to receive traffic data from local infrastructure (where applicable).
The age of vehicle-to-vehicle and vehicle-to-infrastructure communication is not far. But ahead of such technology-based initiatives, the Deloitte and MHI report reveal city planners can work directly with businesses to establish less capital-intensive methods to avoid congestion.
Delivery hours can be arranged with trucking companies, warehouses and local businesses to receive shipments outside of rush hour. Similarly, working on regulations to pilot autonomous delivery projects or incentivize smaller, spread out warehouses (rather than big box zones) could help spread traffic. Solutions abound for those willing to engage stakeholders, and at least in the supply chain, logistics professionals seem more than willing to collaborate.
- Deloitte and MHI 2017 MHI Annual Industry Report
- Supply Chain Dive IA researchers urge DOT to share data with logistics providers
- Supply Chain Dive Report: How logistics congestion is stifling the chemical industry's growth