Internet of Logistics - Connecting Communities, Enabling Transformation

Recently in early July, PSA was very pleased to have played host to the inaugural Internet of Logistics (IoL) Summit, which brought together over 150 delegates, including key decision makers and leaders from supply chain-related industries and government agencies, for an afternoon of stimulating panel discussions and sharing sessions.

To the theme of “Connecting Communities, Enabling Transformation”, the focal point of the day was on how we could come together as a community to co-create the IoL, to better realise the possibilities for enhanced cargo flow for all stakeholders.

What we are seeking to achieve is not without precedent.

This year, the World Wide Web celebrates its 30th Anniversary, and to say that the Web has transformed each and every one of our lives, is closer to truth than hyperbole. The Web was the brainchild of Tim Berners-Lee in the 1980s. Then, an IT consultant with CERN, it was his belief that we should be able to communicate by sharing information, in a time when there were many information systems, on different computers, on different networks, all incompatible. The Web started as an internal sharing protocol, but it grew to become the world wide phenomenon it is today. In the words of Berners-Lee, “It used to be difficult to explain what the web would be like… now, it’s difficult to explain why it was difficult.” And the Web of today owes its reach and usefulness to the Internet, which was incepted in the 1960s.

This story serves as a fitting parallel for what we are now facing in supply chain logistics. When we think of the term “Internet of Things” (IoT), it seems to be a rather newly minted word, but the term was coined by Kevin Ashton in 1999. He wanted to draw attention to the potential of RFIDs and the information that could be extracted at the activity and process level, for the work he was doing on supply chain optimisation at Procter & Gamble. In the 20 years since, the contribution of IoT has been to give us greater clarity at the individual system level, but we do not have an “IoL”, or a WWW equivalent, that connects across these systems, that could give us access to information across multiple nodes of the supply chain. It would serve us well to take in the lessons learnt from the creation of the Web, on how to realise our own digitalisation journey. And so I coined the term, “Internet of Logistics”, to give us a foundation upon which we can all co-create.

Going back to basics, a fundamental question we can ask ourselves is how can we do better as a global logistics supply chain community – collectively and not just individually? And how can digitalisation drive innovation in this area further?

Understandably, the digitalisation of the global supply chain is no easy feat. The number of players, amount of data content and complexity can be daunting. In addition to legacy issues, there are also challenges in data governance across different systems. Logistics is a team sport, best likened to a relay race with multiple check-points. Very often, while there are indeed ‘best in class services’ offered by nodes along the supply chain, this is marred by the fact that collectively, we have some way to go before we can say that we are ‘best in class’ as a group. So, while new technologies are there to help us, proper collaboration is still key.

I invite you to imagine the impact on the world if we successfully effect change in just one area alone, take for example the food supply industry. 30-40% of food does not reach its destination intact and needs to be disposed of, due in part to inefficiencies along the supply chain. Supply chain infrastructure and efficiency alone could reduce the amount of food wasted by US $270 billion per year (in value), according to a Boston Consulting Group report, which also estimates this to be a $1.5 trillion problem by 2050.

We are however making progress. A plethora of new applications have attempted to improve on process. Apps covering everything from supporting start-ups to improving paperwork, fleet management and a logistics e-marketplace abound. Then we have platforms such as CALISTA™, Tradenet and Portnet, that enable smoother transitions between the physical, regulatory and financial aspects of trade along the supply chain. A complete Cargo Solutions initiative is in place here at PSA to help in creating multi-modal solutions for freight forwarders, in addition to advising on trade compliance and supply chain planning, optimisation and resilience. Progress is being made steadily, however, until there is a way to combine them all, the game may not significantly change.

We must have greater collaboration along the entire supply chain and better system-wide optimisation if we intend on solving the logistics problems of today, much less the futures. There remains a strong need for an ‘Internet of Logistics’, essentially an ecosystem of communities in which platforms and systems are interoperable and support ‘plug and play’. Tim Berners-Lee’s aspiration was for the Web to cross barriers, connect cultures and ultimately, serve humanity, so that “those who come to it later will be able to create things that we cannot ourselves imagine.” Can we hope to do as much?