The completion of the TEN-T network, the introduction of autonomous driving on the European roads and robotization in distribution centers (DCs) will reshape European distribution networks in the next 10 years.
These innovations will help make up for the anticipated shortage of personnel in the logistics labor market, support safer road transportation, increase efficiency in European transport and improve Europe’s competitive strength.
Three technological developments in transport and distribution are going to fundamentally change existing European distribution networks: the Trans-European Transport Networks (TEN-T), autonomous or platooned trucks that will carry goods safely and reliably over the TEN-T, and the innovations in warehouse automation and robotization.
In the framework of the TEN-T program, the European Commission has designated international transport links that are to be fully built up and improved with EU funding through 2030. These concern innovative transport links on water, rails and roads.
The aims are to further strengthen the European transport infrastructure – and the intelligent transport and traffic management systems that go along with that – to lower transport costs in Europe. On these safe and robust core network corridors, goods will find their way – uninterrupted, but especially also reliably – between Europe’s major production and consumption areas. The TEN-T is the preferred network of the future for shippers and logistics service providers. The development of autonomous driving will make the TEN-T network even more relevant as part of future European distribution networks.
Platooning: autonomous driving
Unmanned trucks are getting closer and closer. The use of wireless technology to connect to a road train is already technically possible. Long haul road transportation will benefits from this.
These ‘road trains’ are going to need to have sufficient volume and frequency. That will require large DCs where logistics service providers and shippers can consolidate transport flows across multiple supply chains to deliver, with a high frequency and great reliability, to DCs downstream in the supply chain, close to major consumption centers (e.g. city hubs).
Those DCs will need to be strategically connected with the main nodes of the TEN-T network and close to production- and consumption centers. Successful implementation requires European spatial planning, clustering and connecting European regions upstream and downstream.
Collaboration and consolidation
For successful collaboration, both horizontally and vertically, open data for intelligent transport systems, traffic management and synchromodal planning should be available for all shippers and logistics service providers. Collaboration is built on trust. A clear vision on ownership of (big) data for operational and tactical transport planning is necessary to create a level playing field in Europe for all players.
Existing regulations for shippers transporting on their own account could stand in the way of collaboration between shippers. Shippers cannot transport each other’s loads just like that. Is contracting out one’s transport the only option then?
The European Union is working on the further liberalization of road transport by logistics service providers. The question is whether the further liberalization for shippers doing transport on own account would not be also effective and yield even better results. A level playing field for transport on own account and logistics service providers will support more collaboration and sustainable transport in Europe.
With more e-commerce (soon also in business-to-business), with the rise of nano stores in cities and with the growing circular economy, the European flows of goods will become faster, more frequent and more fine-mazed. Over the coming decade, the packagingdensity – the number of order lines per cubic meter – will be increasing by a factor of 5 to 10. Cost of handling in supply chains will increase.
It’s no longer the transport or storage costs that will determine the setup of the distribution network, but rather the efficient handling of goods. What is more, developments in technology will be changing the logistics landscape.
Faster, more frequent and more finely meshed deliveries are going to require automation of the handling in DCs: “dark stores”. With new technology such as Amazon’s picking robots, automatic case picking, RFID, GS1 standards for pallet labels, dock-and-roll and pick-by-voice, the productivity in DCs is increasing in leaps and bounds. Distribution centers where employees gather 900 to 1,200 order lines an hour are no longer exceptions. Those investments can only be earned back in DCs with sufficient scale.
Ten years ago, companies still thought that DCs couldn’t be any larger than 50,000 square meters. Warehouses larger than that were thought to be less efficient. In the meantime, Zalando, Action, Wehkamp, Nike, Zara and others have shown that efficient DCs can easily be as big as 150,000 to 300,000 square meters.
Also here, successful implementation requires European spatial planning, clustering and connecting European regions upstream and downstream.
Future European transport and distribution networks
The DCs of the future will be located at strategic points within the TEN-T network consolidating products upstream and decoupling at city hubs downstream. They will combine freight flows from many shippers and logistics service providers and have highly automated internal processes.
The DCs will be interconnected with advanced information systems for the minute-by-minute planning and control of the operational processes with transport management, warehouse management and traffic management: sense and respond. Control towers will see to the tactical coordination of the flows of goods and capacities in the distribution network: predict and prepare.
Apart from the question as to where companies are going to find the talented planners needed for all that, there is still the question as to whether nine out of ten DCs in Europe won’t be obsolete in 10 years from now.
One European vision
The European Commission can support and stimulate companies realizing the full benefits of both TEN-T network autonomous driving and robotization by focusing on:
1. European spatial planning, clustering and connecting European regions upstream and downstream.
2. The free availability of open data for intelligent transport systems, traffic management and synchromodal planning.
3. A clear vision on ownership of (big) data for operational and tactical transport planning to create a level playing field in Europe for all players.
4. Creating a level playing field for shippers doing transport on own account and logistics service providers.
5. Standardized EU specifications for platooning technology, on board technology and data sharing (for intelligent transport systems).