Marisol International Transportation & Logistics Blog

Three Ways Technology is Shaping the Future of the Supply Chain

Posted by Chelsea Mitchell on Dec 1, 2015 9:08:26 AM

Technology has streamlined the logistics industry over the years, but new technologies could revolutionize the industry as we know it. Similar to the Industrial Revolution in the late 1700s, the supply chain is evolving due to major technological advancements. 

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Over the past ten years, supply chain operations have increased in efficiency due a number of technological breakthroughs, including:

  • Transmission of information across borders through AMS (Automated Manifest Systems)
  • Electronic integration of U.S. Customs and Border Protection and other government agencies (OGAs)
  • Automation of port operations such as driverless cargo-handling machines, remote-controlled cranes, auto-strads (learn more about auto-strads here)
  • E-documentation sharing capabilities
  • Electronic Data Interchange

The below three disruptive technologies could further change the industry in the near future.

1. Autonomous vehicles are expected to drastically change the trucking industry over the next decade.

Earlier this year, Daimler Trucks North America (DTNA) unveiled the "Inspiration", an autonomous prototype that is a building block towards driverless vehicles. It was the first autonomous commercial truck licensed to operate on an open public highway in the United States. The vehicle automatically maintains legal speeds, stays in the selected lane and keeps a safe braking distance from other vehicles.

The National Highway Traffic Safety Administration defines four levels of autonomous vehicles, ranging from 0 (no automation) to 4 (a truly driverless vehicle). The Inspiration is considered a Level 3 autonomous vehicle. So far this year, sixteen states have introduced legislation related to autonomous vehicles. Some believe autonomous trucks could enter the mainstream within the next five to ten years, however, it could take much longer due to legal regulations, safety precautions and increased costs.

2. Drones could also potentially disrupt the small parcel delivery process.

Earlier this year, the first legal package delivery by a drone took place by a research group led by Virginia Tech. The Mid-Atlantic Aviation Partnership delivered a package of medicine to a patient in the mountains of Southwest Virginia. In October, the U.S. Department of Transportation and Federal Aviation Administration announced the creation of a task force to develop registration processes for Unmanned Aircraft Systems (UAS), commonly known as drones.

Amazon is already testing drone delivery in "multiple international locations" and will launch its U.S. Prime Air Service once it has "the regulatory support needed to safely realize our vision." Walmart and Google have both announced they plan to utilize drones for delivery to their consumers in the future, though legal regulations hinder the full adaptation of using drones in the U.S. for commercial delivery at present.

3. In the ocean cargo world, unmanned cargo ships could reshape the industry.

The Rolls-Royce Blue Ocean team in Norway is currently developing 'drone ships,' crewless vessels operated from afar. The drone ships would dramatically reduce labor costs associated with manning a container ship. Ship crews can cost more than $3,000 per day, and represent some 45% of the total variable operating costs, industry experts say. Without the need for a 'bridge' structure (where the crew normally lives), more containers can be transported on these ships. Additionally, it is estimated that the ships would be 5% lighter by eliminating the bridge and would therefore use 12-15% less fuel.

The unmanned ships are remote controlled and use dynamic positioning systems with data collected from satellites, gyrocompasses and stabilizing sensors to hold position in rough seas when transferring cargo. According to the group, the ships would be safer, cheaper and more environmentally friendly. The European Union is currently funding a 3.5 million-euro study into drone ships called the Maritime Unmanned Navigation through Intelligence in Networks (MUNIN) project.

The biggest delays for 'ghost ships' are the legal and regulatory challenges. These hurdles combined with industry and union pushback will almost certainly slow global adoption. Currently, unmanned ships are illegal according to international seafaring conventions which mandate minimum crew and operations requirements. Drone ships are unlikely to start operating within the coming decade, but partially automated ships with reduced crew could be an intermediate step for the industry in the near future.

The future of the logistics industry could drastically change due to these three automated technologies. All in all, the major hurdles to wide spread implementation of these technologies are the legal and regulatory challenges. Safety and initial costs are also top concerns of developers and the trade community. Keep up with these developing ideas by subscribing to our weekly industry newsletter here.

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Topics: Supply Chain, Technology

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