A Mind-Blowing Vision: The Physical Internet
A new transformative vision is taking hold in the shipping and logistics world.
Posted Nov 16, 2019
There’s a wild idea taking root in the logistics business that seeks to model the bits and atoms world of transport logistics after the technologies and methodologies of the digital internet. This vision was pioneered by Benoit Montreuil of Georgia Tech University, seeking to “packetize” logistical processes to create more efficient, effective, and sustainable supply chains based on open standards and processes.
So why is this important to consider in this blog? By studying truly breakthrough ideas, as they are emerging, we can learn to master the art of innovation. It’s like watching a masterpiece being painted by a modern day Da Vinci of innovation. And this is the perfect opportunity to do so because this is like the Sistine Chapel of ideas. Read this, feel the excitement, and let it boost your own innovative thinking. Share your thoughts in the comments area!
First, as with any innovation, let's start with the customer pain point. The reality is that the way we currently transport, store, and handle freight is pretty inefficient—about 20% of all trucks on our highways are empty, what truck drivers call “dead-heading”—and the sprawling, ad hoc system that we’ve cobbled together is unsustainable over the long run from an economic, environmental, and societal perspective. The reality is that inefficiency is built into virtually every step of our processes, from empty trucks dead-heading a hundred miles to pick up their next load, to distribution centers that sit underutilized for days or even weeks on end.
And life’s not easy for the truck drivers either. A typical long-haul truck driver, following the Federal Hours of Service rules of 11 hours cumulative driving in a day, would take almost five days to haul a load from New York to Los Angeles. Then it could take two or three weeks before that driver could book enough paying loads in the right direction to get back home. The stress of these long trips away from family is one of the main reasons drivers quit the trucking business
Instead of business as usual, imagine a dramatically transformed global logistics system that moves products in standard-sized, modular containers that snap together to fill a 40-foot standard container—as efficiently as an Internet router moving digital packets across continents. This is the vision of the Physical Internet, which is attracting not only considerable buzz in the logistics industry, but gaining momentum and investment, especially within the European Union.
Here's how the business model gets disrupted: Freight transportation is now dominated by end-to-end transportation of full loads, which is like hiring a messenger to personally deliver each email. The key is to shift from individual packages and pallets that get packed into standard containers, to standardized, modularized, digitally empowered containers, cleverly called π-containers, that snap together to make up a standard 40-foot container for a truck or railroad to haul. These π-containers are like packets, and much like an email, they will be decomposed and recomposed dynamically in what are called π-hubs, which are open logistics/sorting centers that exploit real-time identification, communication, state memory, and reasoning capabilities. This would transform a fragmented industry into what could be called the Logistics Web.
Recent studies have demonstrated that this crazy idea might actually work. A team from the CELDi research center (supported by the U.S. National Science Foundation) working in collaboration with industry leaders such as CHEP, J.B. Hunt, Procter & Gamble, Tompkins International and WalMart, conclude that if 25% of the U.S. supply chain would adopt the Physical Internet, it would produce an annual profit boost of $100 billion, a 32% reduction in greenhouse gas emissions (150+ Tg of CO2 annually) a reduction from 100% to 24% in annual driver turnover, and at the same time, US consumers would end up paying less for anything that has to be transported from a distance.
The lack of standards, modularity, and openness has bottlenecked innovation in the logistics industry. We’ve had to live with marginal innovation, which has strangled the development of things like more efficient conveyors, forklifts, and storage systems for decades. Moving toward the Physical Internet will not only transform long haul logistics but could stimulate breakthrough thinking in last-mile delivery and sustainable urban re-planning as well.
As an exercise, this is only the beginning. Once you built this new vision, so much is suddenly made possible. For example, consider the need to tune and optimize this global logistics system. By thinking about optimization, another layer of innovation potential and success metrics can be unlocked. FYI, this is an arena known as large scale optimization, which is necessary to squeeze every drop of efficiency possible out of these future systems. It’s a difficult problem, involving tens or hundreds of millions of variables. If you want to read more about the potential for large scale optimization technology, you can do so HERE.
For us today, considering the idea of the Physical Internet is like watching Da Vinci paint or Michelangelo sculpt or Edison invent, it’s a chance to learn by appreciating and possibly even participating in this ideation effort.
Think of this: someday, all of this will come together, possibly around the time when breakthrough quantum optimization computers are commercially released. When this happens, it will launch a revolution that could solve the large-scale optimization problem for global logistics in a mind-boggling way. Possibly, orders of magnitude improvement in delivery reliability.
Then, all we have to do is add some robot truck drivers, automate the π-hubs, and don’t forget flying drones for the last mile delivery—all technologies that are already under development—and bam, welcome to the future!
Pretty amazing huh?
Mind blown. You’re welcome!