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The Future of the Freight Supply Chain

The Future of the Freight Supply Chain

From drones for online fulfillment to mobile robots in warehouses, the current supply chain is undergoing a major transformation. With the extensive possibilities in AI, the future supply chain holds the promise of being completely autonomous and self-sustaining.

The supply chain of tomorrow will be more efficient, faster and most importantly, self-orchestrated. This unique transformation will be driven by a few essential technologies that will carefully and strategically be adopted by industry participants over the next 15-20 years. Here are a few changes that will likely automize the supply chain in the future.

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Autonomous Fleets

Drones are currently getting a lot of attention in the supply chain news and have stirred up a lot of conversation since Amazon announced its plans to launch drones for last-mile deliveries. Before drones came the experimentation with the first “vehicles” to become autonomous in the supply chain – forklifts. A new type of forklift, called “vision-guided fully autonomous mobile robots,” has the ability to process orders four times faster than a human.

The possibility of fleets becoming completely autonomous seems very real. Truck platooning and autonomous trucks could be a reality by 2030. Rolls Royce has even announced plans to launch autonomous cargo by 2030. One benefit of this is truck platooning, for example, which could save as much as 20 percent on fuel costs.

E-Brokerage Platforms

Growth in e-commerce, along with new and evolving technologies, will bring in new solutions for freight and logistics firms. The introduction of digitalization in trucking will force traditional freight brokers to move their business model toward mobile-based, freight brokerage-type solutions. Mobile apps are critical to a seamless, real-time brokerage system, also known as the “uber of trucking.”

Predictive Optimization

One big example of this is Amazon. Amazon wants to ship your products even before you know you want them. Their current patent on “anticipatory shipping” demonstrates a strategy where Amazon will send out deliveries to partial street addresses or zip codes to get the products as close as possible to the consumer and then in-transit complete the address and route it to someone who has placed the order.

To meet this new world of demand, freight and logistics supply chain players should understand the ways different new technologies and practices are evolving. And just as importantly, they should master the timing. Knowing the stages of change that lie ahead for the market as a whole may be the key to knowing which investments to make at which time.

 

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When Will Your Products be Delivered by Drones?

Shippers are enthusiastic about drone technology because the devices could greatly cut delivery times and costs.

The drone revolution will disrupt an assortment of industries, from agriculture and filmmaking to transportation and healthcare. Logistics will have to adapt to changes as more retailers experiment with drones and the technology evolves to be cheap and efficient. The transportation industry will be transformed by drones, especially in terms of last-mile service.

Online retailer Amazon has been testing drone delivery since 2013. Google has pledged drone delivery service by 2017 and Wal-Mart is currently testing drone use.

But, there are various barriers for the technology to overcome. One barrier is communication – there has to be undisrupted communication between drones and airplanes to avoid collisions in the crowded airspace. Other barriers include battery safety and longevity, legislation, insurance, and privacy.

Noticeably missing from the list of barriers to drone technology is weight and distance. Amazon, for example, claims that 86% of its packages weigh under 5 pounds. And Wal-Mart has said that 70% of Americans live within 5 miles of a Wal-Mart. This is optimistic news for the future of drone delivery.

In Switzerland, flying vehicles have replaced postal carriers in tough-to-reach regions. American regulators phased in commercial drone flights this year, starting with limited flights of small drones weighing 55 pounds or less.

What exactly is a drone? According to a Wired article, a drone refers to an aircraft that has the capability of autonomous flight, which means they can follow a mission from point to point, guided by a GPS or sensors. Drones, also known as unmanned aerial vehicles (UAV), carry some sort of freight, which could include a camera or sensor, and eventually your products, and also have a way to transmit data wirelessly back to its base.

The drone business is predicted to boom by more than 6,000% by the end of the decade, according to a PwC report. The global market for commercial applications of drone technology is estimated at $2 billion, and will balloon to as much as $127 billion by 2020.

Currently, drones can’t match the abilities and efficiencies of a truck, but the technology is captivating. Once the major obstacle of legislation is finalized, it’s likely we’ll see more companies integrating this technology into their supply chain.

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