By Lisa A. Bastian, Veteran Business Writer, Bastian Public Relations
Exciting if not challenging developments in the fluid transportation sector are expected for the remainder of 2015, and beyond. What follows are some fascinating trends impacting logistics and global supply chain industry players of all sizes.
The Rise of “Zombie” Vehicles
Autonomous vehicles are no longer science fiction. They exist, but are certainly not commonplace—yet. This year, R&D will continue full-blast on the whole “zombie” car and truck concept at public and private research centers. Many experts believe a limited but growing number of safety-tested vehicles could own the roads by the end of this decade.
On the trucking side, about fifty heavy-duty self-driving trucks already are assisting mining operations in Pilbara, Western Australia, according to David Robson, writer for BBC Future. “Similar fleets of driverless vehicles can also be found in other parts of Australia and Chile,” he reports.
In the Netherlands, plans are underway to allow zombie trucks to serve the needs of the Port of Rotterdam (one of Europe’s largest commercial ports) within the next four or five years. TNO, a Dutch public-private consortium, already has submitted an application to test autonomous cargo trucks that drive in convoys.
Earlier this year, Dutch Infrastructure Minister, Schultz van Haegen is expected to lobby the Dutch House of Representatives to make it legal for self-driving vehicles to operate on public roads. “The age of self-driving cars has arrived,” says van Haegen. “Developments in this field will change the relationship between driver and vehicle – more in the next twenty years than anything in the past 100 years did. I want us as the Netherlands not only to be ready, but also to be at the vanguard of this innovative development internationally.”
Dutch transportation leaders hope the techno success of commercial zombie trucks will lead to the development of driverless cars to be driven throughout the tiny Kingdom within the next decade.
Benefits of self-driving cars abound. Computers can take control of braking and steering in heavy traffic, and can even become the all-important “designated driver” if the passenger is intoxicated or impaired. Pundits predict these vehicles will result in fewer traffic collisions (90 percent of accidents are caused by human error), reduced traffic congestion, increased roadway capacity, smoother ride experience, lower vehicle insurance, and shorter trip times due to higher speed limits.
Audi, BMW, Toyota, Nissan and Mercedes-Benz all have developed self-driving prototype cars. Before 2020, Volvo plans for autonomous driving technology to be part of its production cars line-up. And in just two years, Volvo expects to put about 100 driverless cars on the roads of Gothenburg, Sweden.
Google continues to develop technology for building these types of cars. A few of its consumer car-modified vehicles are already zooming down test roads. The company plans to roll out non-commercial vehicles first – possibly in the form of a “robo-taxi” fleet – followed by commercial cars. Sometime later this year, Google expects to put 100 self-driving vehicles on the streets. No announcement has yet been made on whether the firm will build its own cars and/or partner with vehicle manufacturers willing to incorporate Google software into their products.
This year in the United Kingdom, Oxford University robotics experts are part of a program testing small driverless pod cars on the pavements of Milton Keynes. If successful, plans call for a larger fleet to be deployed as taxis in that city by 2017.
With all this activity, it’s not surprising that the first global summit on driverless car computing – COM.DriverlessCar 2014 – was held August 2014 in Washington, D.C. The event brought together vehicle manufacturing leaders and governmental policymakers.
Container Congestion: No Immediate Relief Expected
As more super-sized container vessels enter international shipping lines, container congestion and chassis availability problems will grow in 2015, predicts Freightgate, a California-based developer of Internet solutions for the freight and logistics industry.
Port strikes, “green” sustainability initiatives and inadequate port transport infrastructures will make it compulsory for logistics providers and importers alike to respond swiftly to such challenges in order to avoid delays and higher costs. Freightgate asserts that the key to fixing these problems will be for industry players to implement proactive logistics planning as well as real-time shipment visibility and collaboration.
This past January the U.S. Federal Maritime Commission (FMC) announced the congestion plaguing U.S. ports is its top priority in 2015. FMC Chairman Mario Cordero says the assurance of “an efficient ocean transportation system” is one of the Commission’s mandates. To that end, the FMC will continue to address “unreasonable or unjust practices by carriers or marine terminal operators,” he says.
Since early 2014, U.S. West Coast ports have been hit with unprecedented congestion due to stalled contract negations between the Pacific Maritime Association, representing employers at 29 West Coast ports, and the International Longshore and Warehouse Union, representing 20,000 dockworkers. A tentative agreement was reached January 27th. A full resolution is long overdue as these ports handle nearly half of U.S. maritime trade and over 70 percent of Asian imports.
However, even after this current dispute is resolved, Cordero warns “We need to realize that that’s not going to eliminate the congestion problem….I think the stakeholders all will admit that our ports [are] not ready to facilitate the 10,000, 17,000, 19,000 TEU vessels that are arriving.”
Cloud-Based TMS Usage Exploding in Popularity
An increasing number of supply-chain management companies are ditching a portion of their traditional, on-premise transportation management system (TMS) software and opting for one or more of the new breed of Cloud-based TMS solutions. This trend is only expected to explode in the coming years, especially with smartphones, tablets and other mobile devices.
Simply put, cloud computing allows software to be run on virtualized services. Start-up costs are inexpensive, and often involve a company paying affordable ongoing subscription fees vs. costly upfront capital expenses. Adoption of a virtual TMS solution definitely decreases in-house IT expenses, too, as the lion’s share of a company’s software maintenance workload is taken on by cloud vendors.
Also, more retailers are adopting cloud-based technologies to improve their omni-channel networks, a trend impacting third-party logistics partners supporting these customers. This activity supports a more efficient obtainment and transmission of real-time information benefiting customers, retailers, manufacturers and supply-chain providers.
The Push for Diesel to Natural Gas Conversion
Supply chain leaders are expected to keep exploring and/or increasing their use of natural gas while still clinging to diesel. Natural gas is more environmentally friendly. When burned, it emits a quarter of the carbon dioxide (CO2) of diesel fuel. Switching to natural gas also can potentially have significant fuel cost savings. Although a gallon of LNG or CNG fuel contains less energy per unit volume, the price of natural gas remains relatively lower and more stable than diesel.
Ryder System marked a significant milestone when its fleet of natural gas vehicles surpassed 30 million miles in travel. Since deploying its natural gas vehicle program in 2011, Ryder has replaced nearly 4.6 million gallons of diesel fuel with domestically-produced natural gas. Its fleet consists of liquefied natural gas and compressed natural gas tractors serving customers in California, New York, Michigan, Texas, Arizona, Utah, Maryland, Georgia and Louisiana as well as in Canada. “We continue to see demand for natural gas vehicles from businesses looking to reduce costs and advance the environmental sustainability of their fleets,” says Dennis Cooke, President of Ryder’s Global Fleet Management Solutions.
A few years back logistics giant UPS vowed to reduce its diesel soot emissions by 75 percent and nitrogen oxides by 60 percent by 2020. To achieve this goal, the firm bought almost 300 more natural gas vehicles in 2014, and is investing millions to build more natural gas filling stations nationwide as part of its push to embrace alternative fuels.
One roadblock to robust industry fleet conversion efforts is the limited (but growing) number of CNG and LNG refueling stations. Another is the hefty price of a new heavy-duty gas truck, reported to be $30,000 to $50,000 more than the average new diesel-powered truck. Federal and state vehicle tax credits, plus infrastructure tax credits available to green fleets, can help offset acquisition costs, which apparently aren’t holding back sales. Power Systems Research estimated about 10,480 heavy-duty natural gas trucks were bought in 2014, a 20 percent increase over 2013.
As these problems are addressed in the next few years, natural gas is expected to gain a significant if not dominant role in transportation.
3D Printing: Friend or Foe of Logistics?
Just three years ago, a White Paper was published warning that 3D printing could be the “biggest single disruptive phenomenon” to shake up the global logistics industry since the Industrial Revolution.
The report, entitled “Implications of 3D Printing for the Global Logistics Industry,” estimated that 50 percent of finished products would use 3D printing in the manufacturing process by 2016, and possibly up to 80 percent by 2020.
Someday, perhaps the White Paper’s predictions may come true. There might be a reduction of shipping/air cargo volumes, decreased warehousing needs and inventory levels, more retail store closings, and fewer opportunities for logistics suppliers to serve upstream supply chains. On the flip side, there will be more opportunities to be part of the world created by 3D printing, such as new manufacturing clusters located closer to end markets.
With the cost of 3D printers dropping quickly, this technology is bound to play a greater role in the modern supply chain as companies and individuals alike tentatively figure out exactly what it can do.