Logistics: how big data is transforming mobility
The digitalization of the logistics industry is underway, bringing with it the promise of efficiency, profitability and a reduced environmental impact. Big data, augmented reality – welcome to the age of Logistics 4.0.
More than a place where merchandise can be stored, warehouses have become gold mines of data. Thanks to a plethora of sensors, they can track stock in real time, allowing operators to manage inventory without halting operations. China-based Alibaba has warehouses that use automated guided vehicles that receive instructions directly and retrieve goods by themselves. The robots are fitted with sensors to prevent them from colliding with each other. And when the battery is dead, the bot automatically goes to the charging station. Thanks to these cutting-edge order pickers, efficiency and output have increased threefold.Logistics 4.0 is helping warehouse managers streamline their operations and considerably cut delivery times by reducing truck loading hours.
A growing number of delivery vehicles are being equipped with sensors capable of transmitting data in real time. Smart technology is also bringing augmented capabilities to the driver’s seat. Information systems enable drivers to select routes based on weather, traffic and road conditions. This helps them optimize their journeys and lower fuel consumption by up to 4%. Due to the benefits of remote diagnosis, freight carriers can monitor their fleet of connected trucks at all times. Automakers have now begun offering predictive maintenance contracts. After-sales services can use predictive algorithms to analyze data and better plan tune-up schedules to prevent breakdowns from occurring.
An algorithm for lowering costs
The arrival of big data is helping trucking companies become more competitive. Logistics consultant Ludovic Cousin is developing a tool that will help freight transporters provide fair quotes in a timely manner: “When a client receives a shipping request, we will analyze all the rates that were previously proposed for a similar request and add in factors such as traffic and weather. With this data, we will be able to calculate a quote in a few seconds”. Being able to offer a quick quote enhances a company’s chances of winning a contract.
The Amazon model
In terms of Transportation and Logistics 4.0, Amazon continues to be the global benchmark. The American multinational understood that fast and reliable delivery was the key to e-commerce differentiation and dominance. Amazon relies on algorithms to find the best delivery providers and offer unbeatable delivery times. Rates are determined on the basis of location, product category and shipping method. “Amazon’s strength lies in the fact that it controls every link in the supply chain. They have all the data on the items, even before they begin shipping them,” says Mr. Cousin. Amazon is increasingly bringing shipping in-house. It launched a shipping service between Asia and the United States and will soon inaugurate its own air hub in Kentucky. The company also develops innovative solutions aimed at improving the delivery experience. For example, customers can now have their parcels delivered to their car trunk or inside their home when they’re not there.
The e-commerce explosion has however created a new problem: how to manage product returns. In Europe, the return rate is higher than 50%, and reverse logistics is costly. Here, too, big data has found a solution. Already back in 2008, Europe’s leading online clothes retailer Zalando had a policy of free returns. By analyzing sales data, the company can predict the geographic area where the returned item has the most chances of being sold. The article is redirected to a platform in that area and put back on sale as quickly as possible.
With the development of autonomous cars, Transportation 4.0 is also focusing on making travel greener, via better engine use and better itineraries. In 2016, six convoys of self‑driving trucks traveled across Europe as part of the “European Truck Platooning Challenge”. Driven by smart technology, the trucks achieved a fuel savings of 10%. However, the arrival of big data won’t necessarily reduce the carbon footprint of transportation and logistics. “Most of all, it has contributed to the development of the logistics market,” says Mr. Cousin. “Actually, I think it has a negative impact on the environment.” According to the American news website Axios, the development of super‑fast shipping services like Amazon Prime has caused a surge in greenhouse gas emissions and produced as much pollution as 7 million cars.