You want it tomorrow? Today? Within the hour? Customised products? Groceries on the doorstep? DVDs to a pick-up point? Whatever you want, whenever you want, at the convenience store on the way to work?<\/p>\n
E-commerce, home deliveries and a growing trend towards shopping \u2018little and often\u2019 are all driving big changes in the supply chain, with warehousing and distribution channels are evolving to meet demand. To give an idea of what\u2019s happening, Amazon took 25% of all the new warehousing stock built in the UK last year.<\/p>\n
\u201cWe are seeing a transition from the legacy model of supply chains and logistics networks,\u201d says Peter Ward, chief executive of the UK Warehousing Association. \u201cInstead of economies of scale, it has to be economies of scope \u2013 it is now all about agility and flexibility. That means sufficient bandwidth to be able to speed up, slow down, and go both ways, handling deliveries and returns. It also means frequent replenishment of smaller, convenient stores.<\/p>\n
\u201cThis requires something different to the fixed, linear model based on \u2018big is beautiful\u2019 and everything centralised. Around the world, consumer behaviour is changing; people want to order something online and have it within the hour or at least the next day. We are moving away from traditional out-of-town supermarkets to the convenient stores. So instead of having pallets in and out of one warehouse in the Midlands and lots of \u2018stack high and wide\u2019, it is more of an immediate supply chain.<\/p>\n
\u201cWe are moving away from distribution centres to fulfilment centres \u2013 and actually, these are order factories.\u201d<\/p>\n
Ports need to get clever, take a view of the end-to-end supply chain, and work out how they can fit themselves into that, he says. \u201cMost ports historically have been essential nodes in the chain that have added cost. What they need to think about is, how they can convert that node in the supply chain to be value add. How can they add value in the process and help the flow to the supplier? Can they add value by reducing time or cost or both, and can they adapt to serve a greater variety of fulfilment and distribution outlets than the historical model, i.e. a single destination?\u201d<\/p>\n
Portcentricity<\/strong><\/p>\n All of this plays to a degree to portcentric activity, says Mr Ward. \u201cIt might not necessarily be portcentric on a huge scale but certainly the ability to unload containers and devan and deliver to a greater number of fulfilment centres, in different directions.\u201d<\/p>\n Automation and smart IT solutions will become more important in order to meet demand quickly, he adds. \u201cAn automated warehouse doesn\u2019t look like a traditional warehouse \u2013 it is a mechanical, automated order factory where stuff is moving around and things are picked in really small quantities. This is changing the dynamics. Warehouses used to be goods stacked up and people on forklifts bringing goods out for wrapping and loading out; now you have a robot carousel that brings goods from the warehouse to the picker standing in a specific area.\u201d<\/p>\n James Nicholls, partner at architect and planner Stephen George, says flexibility is the key in terms of the buildings themselves. Among design features, warehouses will need larger yards to accommodate more light goods vehicles and a greater number of doors to allow the movement of more goods, more quickly. \u201cWe need to be more and more flexible in terms of how we pick and how we deliver,\u201d he says. \u201cSome bulk items will be stored for longer periods of time, while with other goods we will see stripping out of pallets and containers, and big packages split down and then delivered as individual items.\u201d<\/p>\n He says rail links will also become even more important for ports serving the increasingly demanding consumer market. The most successful ports will provide rail connections for swift transport of containers to strategically located rail terminals around the country, and also \u2018parcel hub\u2019 fulfilment facilities from where smaller vehicles can deliver goods directly to businesses or consumers in larger areas of population.<\/p>\n This, however, does not discount the so-called \u2018golden triangle\u2019 of warehousing and logistics in the Midlands. \u201cThe golden triangle is still within four hours of 80% of the [UK] population and you can easily get north, south, east and west from there,\u201d he says. \u201cWill we still be building what we call original distribution centres or national distribution centres \u2013 big sheds in strategic locations? Yes, but we think it will top out and we will end up with more urban facilities, smaller and closer to populations.\u201d<\/p>\n Robot wars<\/strong><\/p>\n A report into the role of information and communications technology in ports and logistics, prepared by The Economist Intelligence Unit for DP World, says: \u201cBeyond container handling, firms are looking to automate other parts of the supply chain by leveraging the latest innovations in robotics. This is dictated in part by cost savings. As the cost of labour increases and the cost of technology decreases, companies are fast approaching a point where investments in robotics are becoming cost-effective.<\/p>\n \u201cAnother driver is the continued growth of e-commerce and changes in consumer preferences. Today many consumers expect same-day delivery and also want to be able to customise the products that they order. This is placing an onus on warehouses to dramatically increase their speed and productivity.<\/p>\n \u201cThe use of robotics is key to this. Perhaps the most famous example is Amazon, which has installed 15,000 Kiva robots in its warehouses, allowing products to be stacked at a faster rate and more accurately. The result is that the company expects a 20% reduction in the operating costs of the warehouses that use them.\u201d<\/p>\n Also, robots don\u2019t need lights to \u2018see\u2019 where they are going; they can work perfectly well in total darkness in a warehouse.<\/p>\n The DP World report also considers the rise of automated trucks and cars and the practical implications across the logistics supply chain.<\/p>\n \u201cPorts, for example, will need to be able to load containers on to the driverless trucks. There will also be a competitive element as the reduced transportation costs and faster transit times (without breaks) achieved by driverless trucks could shift conventional trading routes. This could herald the arrival of new, unconventional entrants into the logistics sector. Uber … has made no secret of its plans to expand into the logistics sector.\u201d<\/p>\n The report warns that ports need to consider the expansion in the types and quantities of data being produced, much of this provided by the growing number of robots and automation processes.<\/p>\n Sensors used to track and measure the activity of any device are enabling the equipment in a port and the cargo in a warehouse to become \u2018connected\u2019 as part of the wider development of the Internet of Things.<\/p>\n This, however, requires robust communications systems to be in place. \u201cThis is particularly important in environments such as ports, where containers and equipment can block signals. Similarly in warehouses, GPS is often not usable because of the attenuation and scattering of the signal, and so indoor positioning systems that can track RFIDs or other signals are needed. Network infrastructure at many ports was installed around a decade ago and often is not adequate for the high bandwidth and secure protocols required by new IoT applications, and so there is considerable scope for ports to expand their network infrastructure \u2013 both wifi and 4G. \u201c<\/p>\n FROM COOKIES TO CUSTOMER FULFILLMENT <\/strong><\/p>\n The delivery of a box of cookies to the tanker Maersk Edgar <\/em>caused a flurry of interest earlier this year \u2013 because the job was carried out by a drone.<\/p>\n Maersk Tankers, which deployed a small unmanned aerial vehicle built by French company Xamen to carry the cookies from a barge to the tanker, says that drones have the potential for cost savings of as much as $9,000 per vessel per day, as they could reduce the need to hire tenders for deliveries when a ship is not tied up in port.<\/p>\n Meanwhile, Amazon is testing the use of small, unmanned aerial vehicles to get packages to customers in 30 minutes or less. It says putting Prime Air into service will take some time, but it will deploy when it has “the regulatory support to realise our vision”.<\/p>\n Should ports be preparing landing areas for drones? James Nicholls at Stephen George says: \u201cThere are all sorts of logistics and legislation issues to overcome, including the impact on flight paths. I don\u2019t know how it is going to work \u2013 because you can\u2019t have drones turning up at every house in every town in every part of the country.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Warehouses and ports need to adapt to seismic shifts in consumer expectations. Felicity Landon reports<\/p>\n","protected":false},"author":8,"featured_media":2325,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[33],"tags":[],"sponsor":[],"class_list":["post-2324","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-equipment"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/2324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/comments?post=2324"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/2324\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media\/2325"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media?parent=2324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/categories?post=2324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/tags?post=2324"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/sponsor?post=2324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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