Evolution of cargo transport efficiency through a holistic digital freight management system

Steffen Kaup, futurologist at Daimler AG

Megatrends such as increasing online commerce and increasing urbanization will lead to a further increase in the demand for transport, especially in urban areas. This increased need for transport can’t be met by conventional means, i.e. by means of predominantly dedicated transport and supply journeys. The transport solutions currently available on the market already offer potential for further efficiency gains in goods traffic. On the one hand, there is a lack of further integration of different modes of transport in logistics, and on the other hand, the carriers themselves often have free capacities. According to a study by the European Commission, road freight transport in particular achieves an empty run rate of 23%. The resulting economic potential of billions of euros must be realized and, last but not least, further traffic and environmental pollution must be limited.

The cause of this inefficient logistics is mainly due to structural reasons and it usually arises because transport demand and supply do not coincide. Greater transparency of the market and market players would significantly reduce this inefficiency. Ideally, in the condition of an almost perfect logistics market, goods transport would always be possible at the most favourable price and always on schedule. In addition, the theory would always say that the most suitable mode of transport with the best environmental balance would always be used.

Since it can be assumed that the national and international transport of goods will continue to increase, it is necessary to look for solutions and technologies in order to meet the increasing demand for logistics with the existing infrastructure. The aim is to reduce costs, reduce traffic and reduce greenhouse gas emissions while increasing logistics performance. If nothing changes, the damage caused by the inefficiency of logistics could increase many times over in the future.

An innovative approach is to face the growing transport demand with a synchromodal transport system. Synchromodal is a synthesis of ‘synchro’, meaning occurring at the same time, and ‘intermodal’, referring to multiple means of transport. The model for this system, in which goods are split up into smaller units and transported via different routes, is one of the greatest technological achievements of the past 50 years: the internet and its forerunners. Most traffic over the internet uses packet switching, which works on the following principle: before being sent, a message is split into different sub-messages, each of which is given a sequential number so that they can be put back together again at the end of the transmission process. A similar solution might also be conceivable for the transport of physical goods. This is why this principle is called the Physical Internet. For this, existing and available transport options are stored in a comprehensive transport data cloud. This cloud would contain up-to-the-minute, transparent information about the volume of traffic on all parts of the route, as shown in the figure below.

The package itself would provide details of its shipping conditions, such as maximum budget and delivery deadline, as well as the address of its final destination. This information would then be used to calculate the most efficient route using the existing transport network. Different parts of the route could be completed with different means of transport. The more vehicles, goods and road users that are integrated into the system, the better it will work.

As shown in the figure, Artificial intelligence can also help to ensure timely transport from the sender (S) to the receiver (R). With the inclusion of accessibility and onwarding probabilities of hubs, forecasts of arrival times can be continuously improved.

It won’t just be professional courier services that are targeted, but also private individuals who will be travelling on a particular route anyway. By taking goods and packages with them, they can help prevent the increase of traffic volume on the one hand, and can earn some extra money for this delivery service on the other hand. The challenges on the product side have to be analysed and addressed, e.g. how goods can be transferred seamlessly into a private car. This authorization challenge is also already addressed by a pilot project of Daimler and DHL, which shows the delivery of goods and packages into the trunk of a smart. Electric vehicles would be the ideal choice for realizing this concept within low-emission zones. Because of its broad range of products and services, Daimler has patented the concept of this future system innovation in transport and logistics to take the lead in realizing key elements of this ecosystem. 

Since the needs beyond the existing traffic are known, it is possible to establish an ideal complementary traffic system that meets the needs of the existing traffic. Similarly, delivery offers to a group of willing individuals known as crowds can also be arranged in order to compensate for delivery peaks. This increasing trend of so-called crowd delivery shows that this perspective of future is closer that it appears on the first sight. Crowd delivery can be seen as an early stage of a flexible transport system due to ever-increasing digital networking.

A Digital Freight Management System of the future embraces both, an implementation of the synchomodal hitch-hiking of goods and the introduction of on-demand and highly efficient complementary traffic. Such a system innovation could be realized by advanced engineering departments of the truck and van divisions, as well as the telematics pioneers of fleetboard.


The Author

Steffen Kaup, futurologist at Daimler AG

Steffen Kaup is a futurologist at Daimler AG. He studied electrical engineering and computer science in Stuttgart and London. He has held various positions at Daimler AG for 22 years. After working in development departments of passenger cars and trucks with a focus on electromobility, he has been in charge of futurology research on transport and logistics since 2015.