Internet has revolutionized and completely changed the world. This fact is known by everyone…
If we go to the world of logistics to find an example or proof of this, the clearest one is probably e-commerce. The impact of internet on logistics has been enormous, from product tracking, information exchange, inventory control … these are just some of the aspects that have changed radically in recent years.
However, following the example of the logistics sector, people and transport continue to be part of the physical world and actually transporting of people or goods has not changed much, toxic gases generation or pollutants are continuously emitting into the atmosphere and the costs and prices of products increase.
The point is that the way in which this products are currently manufactured, stored, manipulated and transported is simply not sustainable from any perspective: it is not economically or socially, much less environmentally sustainable.
In light of this evidence, the search for innovative solutions to remedy this begins. And it’s right here where the concept of Physical Internet appears.
Can you imagine a supply chain capable of simulating the Internet by creating an open and universal logistics network that is profitable, efficient and sustainable from all points of view?
No, it is not an illusion or a utopia. This hypothesis already has its own theory. The question is, will this be the new logistics?
But, let’s start at the beginning …
What is Physical Internet?
Although it seems like a very recent or almost futuristic concept, the concept of Physical Internet appears for the first time in 2011 by the hand of Dr. Benoit Montreuil, professor of handling and distribution of Coca-Cola materials at the Stewart School of Industrial and Systems Engineering of Georgia Tech.
The concept is quite complex and its aim is to achieve an open global logistics system that is based on a physical, digital and operational interconnectivity through encapsulation, definition of interfaces and design of protocols. The main objective of this open global logistics system is to create a sufficiently efficient and sustainable supply chain to solve the environmental, social and economic problems that we spoke before, which are present in the current systems.
Analyzing what Internet is, we can better understand what the Physical Internet is. The Internet is an open, universal network, composed of countless data packages that move messages from one place to another. When we want to send a message to a recipient, the data we send breaks into this packages, they encapsulate using the IP protocol and are sent to the network. We do not know for which computers the packages pass, the important thing is that they pass through, depending on the time of day, the saturation of the network; all arrive to their destination, where they are detached and the message we sent again is retrieved, so the recipient can interpret it. To ensure that this works well, there are network protocols, IP addresses, optimization algorithms, etc., which guarantee that no package is lost and that the operation is optimal.
In case of Physical Internet we would do the same but with merchandise sent to a recipient. The merchandise will be transported in modular, standardized and intelligent containers, equipped with intelligent technology that allows each unit to be monitored accurately. These containers have different dimensions in order to optimize the shipments. The products will have to be designed to adapt to this type of containers, to obtain important gains on space optimization and an improvement of merchandise handling efficiency.
As with the introduction of the normalized marine container in the 60’s of the last century, we are talking about a real revolution in the world of logistics. This wider range of standardized containers will optimize the management much more. Keep in mind that the current dimensions of the containers are very large and not intelligent.
The image shows an example of the different containers that can be defined and how they are integrated into larger structures. Modularity is a basic element if we want to optimize transport.
Let’s put a practical example
In order to understand it better, here an example …
If you visit any port and check the containers that are arriving or leaving, they all travel without having taken advantage of 100% space and volume they can offer. Here is where the Physical Internet can be applied with the intention of eliminating this type of inefficiencies. This inefficiency is much greater when we talk about cold chain, especially pharmaceutical products, for example.
And this is just an example of many cases and operations that can be improved in the logistics chain. The following video shows it clearly:
What does the introduction of the Physical Internet require?
Converting this concept or model into reality requires, from the beginning, something we do not have: a market that is totally open for freight transport. Or what is the same, an open, shared and modelable distribution chain, which can adapt in real time depending on the state of global network. Thus they can eliminate bottlenecks, saturations, etc.
There must also be changes in product transportation, since the containers must be modular and intelligent, because in this scenario it is essential to monitor and supervise them.
If the containers in which we move the goods change, inevitably, the products must adapt to these changes…
Implementing Physical Internet supposes, practically, a change of paradigm, a 180º turn in the current business culture. In addition to a huge degree of cooperation and many resources … The question, again, is it possible to make Physical Internet the new logistics?
Although we all would love to come true, the truth is that the Physical Internet system is really difficult to introduce and implement in a society like the current one.
Although, I am one of those who think, that the impossible only costs something more than the possible, it is only a matter of time, resources and wit…
If you look back, would you believed if someone, 10 or 15 years ago, had explained the technological advances that we now have within our reach? So why not trust that this will be possible?
As with everything, we must keep an eye on evolution and not lose the train of change if we don´t want to leave the market.