Urban Regulatory Environment
Rising congestion within city limits has resulted in increased levels of pollutants, including CO2. This has forced city authorities to deploy strict regulations that impact logistics providers in terms of how they operate. London, Berlin, Paris and Utrecht are some of the major European cities that have incorporated measures, including low emission zones (LEZs), loading/unloading zone time windows, urban consolidation centres and special lanes.

Freight transport has been one of the major sources of pollution. For instance, in London the problem was identified back in 2010 with freight transport responsible for about 38% of nitrogen oxide and about 40%- 50% of particulate matter 10 (PM10) emissions. Frequent start-stop driving and use of old delivery vehicles are among the major challenges. With the London LEZ, the city has seen a significant decr ease in road traffic pollution without incurring high economic costs. Restrictive time zones have also had an impact. In Berlin and London, local environmental laws encourage minimising freight traffic between 10:00 and 16:00.

Such regulatory controls are driving innovative business models such as click and collect and locker box solutions that increase convenience while allowing delivery firms to reduce transport miles. They are also a key driver of investment in new vehicle technologies to reduce emissions, IT tools for managing commercial fleets, and predictive asset management for operational efficiency and cost reduction.

Booming eCommerce
Meanwhile, eCommerce is growing fast and changing the way we acquire goods. As a result, the supply chain market is becoming more complex in a time-constrained environment as speed of delivery and user experience emerge as critical factors.

In fact, instant and same-day delivery solutions are now key service differentiators. Firms must rethink their strategies and devise more agile models that leverage economies of scale and still meet consumer demands. This spurs a shift from location-based deliveries made of fleet networks to ‘marketplace’ or ‘app-centric’, non-asset-based models.

Nearly 20% of retail in 2025 will happen via online channels globally. And when it comes to more mature digital retail markets such as the UK and US that are characterised by high per-capita online spending, over 25% of retail will be online.

Growth of these online channels will transform traditional retail models with the majority of retailers becoming a hybrid ‘bricks and clicks’ model in the future. Many of the major brick and mor tar stores are already transforming to become more connected and interactive by introducing hybrid models such as virtual stores. This will hugely impact urban logistics, especially for parcel deliveries. The future will see parcels becoming lighter, smaller and a lot more frequent with increasing average orders per week. End customers will also demand more visibility into inventory flows and multiple delivery options.

Connected Logistics
The move towards a more connected future of logistics is all about leveraging the key trends towards more connectivity and advanced data analytics. Frost & Sullivan research shows that data traffic per year is growing by roughly 40% annually and is projected to reach a colossal 100.2 ZB by 2020.

The logistics industry is no different and is being transformed by the same explosion in data. This raises prospects of logistics transforming into a data-centric industry where real-time information takes greater precedence over the actual ability to move cargo. The ability of firms to generate both structured and unstructured data onto the model allows them to make critical decisions pertaining to key logistics functions. Companies have a huge opportunity to use analytics to manage fleets effectively.

Incorporating analytics allows users to optimise routes and fuel usage, control emissions, as well as monitor operational efficiencies and driver performance. Analytics can also be used from the standpoint of predictive delivery, and we’ll increasingly see algorithms used to determine when and where the next potential order will be. This will allow firms to manage routes better from the point of load balances and excess capacities when it comes to truck deliveries.

Internet of Logistics and Trucks
“IoT is transforming the trucking industry by improving the traceability, controllability and diagnostics of in-transit freight”

10% to 15% surge in profits due to IoT-powered trucking solutions

Shared Solutions
The evolving eCommerce market and seamlessly connected technologies will result in transport and logistics service providers delivering packages in real time. The leading innovators, as well as new start-ups, are driving innovative asset-less solutions through ‘appification’ and crowd-sourced platforms, which are critical for pervasive on-the-go-type urban delivery solutions. The ability of some of these innovators to bring the various stakeholders – retailers, consumers, service providers – under a common platform is expected to create tremendous value in terms of the economy of scale that such solutions are expected to generate.

Businesses can explore shared solutions from both a logistics and a manufacturing standpoint. They can collaborate around technology to provide on-demand deliveries when it comes to their last-mile logistics. For instance, we already see trends wherein major auto manufacturers are collaborating with on-demand firms for shared mobility solutions such as on-demand taxi services by 2020. This could well be extended for delivering goods within urban environments.

There will also be a collaboration between firms for resource-sharing technology that will allow for flexible sharing of production facilities or processes. With a growing online market, customers are becoming more demanding, resulting in a need for mass customisation. This has put the onus on manufacturing firms as there is now a need to satisfy diverse customer needs and provide timely solutions. The shared service model can deliver process efficiencies in production while also relieving the stress on supply chain and logistics functions.

Autonomous Logistics
Autonomous logistics will play an integral role in the future of deliveries, and this has already stirred up a debate around regulations and safety aspects of having such solutions, especially for last-mile urban deliveries.

Early testing has been done in closed environments, such as warehouses, with forklifts being made autonomous using vision-guided systems. They are not only expected to perform manual tasks but are also able to process orders and pick up and load deliveries four times quicker than humans. Many have subsequently been successfully tested for outdoor environments such as dockyards.

In the future, urban logistics could also have connected autonomous fleets. Concepts such as truck platooning and autonomous trucks are set to be functional within 10 years. Another area that is emerging is the use of autonomy for urban last-mile deliveries. While drones, at some stage, are expected to be widely used, the autonomous delivery robot (bot) solution is set to dominate urban deliveries. Lesser regulatory mandates, ease of functioning and lower costs of technology make delivery bots a more attractive proposition when compared to drones, specifically for deliveries within a five-mile radius.