With soaring numbers of people moving to cities, the need for better transport solutions increases exponentially. Sixty percent of all travel takes place in cities. That figure will only increase as urbanisation intensifies.
But with that comes enormous opportunities to leverage new and innovative solutions to improve the flow of people and goods and rapidly address some of society’s greatest challenges.
Hitachi is addressing these opportunities through a collaborative process of Social Innovation. This involves collaborating with a wide range of organisations and end users to develop commercially viable solutions that also bring wider social benefits.
Over the past two decades, delivering goods has become a critical challenge in many cities as congestion results in painful and expensive logistics bottlenecks.
The cost of congestion in terms of time wasted in traffic and fuel consumption has risen to unmanageable levels. It is now almost 200 percent more than what it was in the 1990s. In advanced economies some 9.5 billion litres of fuel are wasted each year by vehicles waiting in traffic.
As well as adding to pollution and the emission of greenhouse gasses, this also causes major problems for the timely delivery of goods around cities. More delivery trucks mean more traffic, and this results in longer delays. And all this in an age in which the customer expects a knock on the door soon after hitting the “Buy” button.
New solutions for logistics
Congestion and pollution are only two of the problems generated by the increasing use of vehicles to transport goods. A lack of parking, crowded public transport and warehousing costs are among the many additional factors that are now contributing to the economic cost of urban transport and logistics.
But innovative new ways of tackling these issues are being developed. Electric local delivery vehicles are make their way through the crowded streets of major cities around the world, cutting carbon emissions and contributing to greener living.
In central London, for example, freight vans account for nearly a third of all traffic. Nearly all of these are diesel. This alone contributes to more than half of London’s pollution.
But new electric vans, some of the largest electric vehicles in use, have been introduced, and are kitted out with devices to monitor both emissions and energy consumed.
Changing gear on transporting goods
The revolution underway in the movement of goods around cities has Social Innovation at its heart. Governments are working with the private sector to trial new strategies for alleviating the burden caused by transportation.
Before long, electric vehicles, buses, trains and cars, will become the most widely used means of transportation in cities. Drones are already being trialled to deliver goods for the last mile of the process, or to ensure that even remote locations are not left entirely unserved.
Urban mobility of tomorrow
The future of personal and freight mobility will be about optimising the integration of technology alongside physical infrastructure and hardware.
Technology is already helping to solve the issues of safety, emissions, congestion, and traffic delays. But the true impact will become visible when Information Technology (IT) and Operational Technology (OT) converge. It is at this point we will see the emergence of an “Internet of Mobile Things”.
So progress is being made. But we need to continue making progress. Booming e-commerce will worsen the problems we are already seeing. We will inevitably see growth in the frequency of parcel movements owing to massive growth in online retail. We should expect to see 20 percent growth in business-to-customer parcels attributed to e-commerce orders alone.
Convergence of IT and OT
Six different factors, combining both Information Technology and Operational Technology, will converge to facilitate the changes needed in mobility and the delivery of goods.
- Urban regulatory environment: Some 500 million deliveries will be made per day will be made within cities by 2025. City government mandates on vehicle access restrictions, carbon emissions and other financial measures such as congestion charges will help curtail movement of vehicles in city areas.
- Government action: Cities will open their data resources to entrepreneurs seeking to provide solutions and at the same time they will continue to invest in transport innovation.
- Urban distribution: Manufacturers and retailers will adopt hub-and-spoke warehousing where smaller depots, stores and inner-city points are used to feed goods to customers. Savings of 10 to 15 percent in warehousing costs can be achieved by shipping directly from stores that are used as warehouses.
- Connected logistics: The Internet of Things (IoT) is transforming the trucking industry by improving the traceability and controllability of in-transit freight. IoT-powered trucking solutions will prompt a 10 percent to 15 percent surge in profits.
- Shared solutions: ‘Appification’ and crowd-sourced platforms will enable on-the-go urban delivery solutions. This will mean 15 percent savings in logistics services through the elimination of paper-based processes.
- Autonomous logistics: Full autonomy of logistics fleets from mobile robot yards to autonomous ships will be developed, with semi-autonomous trucks reaching a penetration rate of five percent by 2030.
Innovating for a smoother future
The direction that urban logistics goes from here will be determined by how well we utilise connected, shared, autonomous and electric solutions. Unique value-added services are already disrupting the overall supply chain ecosystem, and new solutions are being developed by the minute.
A growing online market means that customers are becoming more demanding. It is up to the Social Innovators of today to meet those demands while reducing the impact they have on our environment and our overall quality of life.
The ideas in this article are taken from Hitachi’s whitepaper on Social Innovation and transport.
Our world faces a number of challenges, from climate change and pollution to population growth and urbanisation. Hitachi believes that it must help to find innovative and commercially viable solutions for these challenges. Visit Social-Innovation.Hitachi to learn how Social Innovation is helping Hitachi improve lives across the world.
Image under licence from iStockPhoto.co.uk, credit YiuCheung