Digitalizing Post and Parcel: a peek into the future

The rise of the eCommerce and the growing demand for returns are driving exponential growth in the Post and Parcel industry. Trying to secure a niche in the market while adapting to ever-changing consumer behavior may seem overwhelming. But companies have a potent toolkit at their disposal: namely, digital technologies. The way Post and Parcel companies use artificial intelligence, IoT, robots, and other innovations will determine their relevance in the future.

Major industry players already get it: the digital disruption is an opportunity, not a threat. Forecasts tend to agree: Accenture found that Post and Parcel organizations could on average create more than $US500 million in annual value if they incorporate advanced digital technologies.

Since the internet became more widespread, supply chains have definitely been one of the main beneficiaries of the digital progress. And it seems that there has never been a better time for companies to incorporate new innovations than now. When examining core business components and considering new models, companies are often overly cautious about cost-effectiveness and the potential impacts on the human workforce. Considering that each and every logistics process is now tech-infused, the Post and Parcel operators now have a variety of new tools to solve their most pressing issues while increasing their revenues and creating a better work environment for people.

Here are the logistics innovations that will allow Post and Parcel companies to optimize their day-to-day operations and engage with the world in a faster, more transparent, and more efficient way.

AI is a must

Picture Credit: Accenture Consulting

Artificial Intelligence (AI) is at the heart of digitalization; it provides smart solutions to complex problems and its capacity for self-improvement makes it an extremely valuable tool. One of the highlights of AI is that it enables companies to plunge into each business process with extreme detail. As a result, there is a significant reduction in human errors, as many responsibilities become automated. Self-sustaining solutions such as chatbots and virtual assistants can offer customer service as well as parcel tracking and delivery updates. Customers seem to approve of these steps; in fact, according to Accenture, 62% of them are comfortable with AI apps responding to queries.

But the applications don’t stop there, as AI presents limitless opportunities to smoothly integrate into existing structures. For instance, setting up an AI-powered augmented reality software in a warehouse can lead to a decrease in picking errors by 40%. Furthermore, logistics companies have particularly praised AI for its advantages within risk-assessment and forecasting frameworks. Advanced computing and algorithms have enabled the usage of the increasingly precise data in mind-blowing ways. Whether it is the prediction of freight traffic delays, delivery times optimization, transport capacity calculations, or intelligent route optimization, being one step ahead has made companies proactive, rather than reactive. Undoubtedly, AI brings about a new and smarter approach to data analytics. The benefits are obvious: Apart from greater customer satisfaction, logistics becomes safer, more reliable, profitable, and sustainable.

Moreover, AI ensures that every single step can be designed, calculated, and customized to precisely fit each customer’s need. In this sense, applying AI to the trend of using local resources and networks could encourage a scenario of mass customization. For example, Autodesk designed a software tool allowing to work on regenerative designs, that creates hundreds of patterns in just a few hours. In fact, the introduction of AI-powered 3D-printing could eventually substitute shipping altogether, revolutionizing the industry through local manufacturing of goods and the elimination of large warehouses. Companies such as DHL are actively discussing these issues.

Picture Credit: Transmetrics

With the current state of the market and the variety of AI vendors, Post and Parcel operators can relatively easily start an AI pilot project. In other words, it is easy to spend money on AI projects, but it is still hard to make money out of them. In order to make the most out of the investment into an Artificial Intelligent solution, companies should choose providers with a proven record of results in the logistics industry and a short timeline for project implementation.

One of such examples is Transmetrics, which offers AI-driven predictive optimization solutions exclusively for the logistics industry. By implementing its NetMetrics product, which consists of data cleansing, demand forecasting, and predictive planning modules, Post and Parcel companies receive the first benefits in just 3-6 months. Transmetrics’ client Speedy, a member of DPDgroup, claimed that the company managed to reduce its total costs by over 7% with the NetMetrics solution. The software also helped Speedy to increase their capacity utilization from 72% to 82%, cancel unnecessary linehauls, and drastically improve their pricing policies.

Robots as warehouse operators

Artificial Intelligence goes hand-in-hand with advances in robotics. Companies are increasingly using complex machines programmed to maneuver warehoused goods. It is believed that such robots can improve the warehouse fulfilment center efficiency up to three times.

One of the companies leading robotic development is Fizyr, based in the epicenter of innovation of RoboValley in Delft, Netherlands. The startup focuses on deep learning technology for vision-guided robotics. This way, Fizyr provides machines with autonomous decision making in areas such as identifying, quality control, counting, picking, and manipulating goods. Robots programmed this way can take over a wide range of tasks and execute them at great speed.

Another company automating warehouse operations is the Massachusetts-based Locus Robotics. This startup’sexpertise in moving robotics can be seen in their complex multi-bot picking system that works collaboratively alongside humans. This technology allows workers to leave a number of strenuous tasks aside and target their productivity elsewhere.

However, there are many other robotics solutions out there which are drastically improving the warehouse performance. Amazon’s Kiva, Alibaba’s Quicktron and GreyOrange are just a few warehouse robots worth mentioning.

Land, sea, sky… but driverless

Picture Credit: Deutsche Post

Autonomous vehicles have been linked to controversy, but their usage nonetheless remains a hot topic. With more safety progress in the future, driverless cars will take to the roads. Proponents often point out the efficiency gains that could be brought by their potential disregard for 24/7 driving bans and other regulations imposed on human drivers.

Deutsche Post, part of the DHL group, is certainly a pioneer in this field. It has been incorporating electric vehicles that can carry up to 150 kilograms into their delivery services. PostBot has been successfully delivering post regardless of weather conditions in the German town of Bad Hersfeld. Sensors allow the machine to exactly follow the path of postmen throughout the entire assigned road, navigate around obstacles or stop when necessary. Similar projects are also being initiated in other European countries, including Norway and Switzerland.

Another industry giant, FedEx, has just recently announced the launch of a SameDay Bot – a machine to help retailers respond to the growing consumer need for rapid delivery. As more than 60 % of merchants’ customers tend to live within three miles of a store location, we may be witnessing a shift towards a robotized hyper-local delivery.

However, there are also companies transforming long-haul transport by using large autonomous trucks, such as Swedish Einride. The innovative transporter claims to offer a safe, cost-efficient, and emission-free logistics solution. Its invention, the T-pod, is supposedly the first transport vehicle designed for self-driving electric propulsion, completely missing the driver’s seat. At the same time, a comfortable remote control is also enabled via GPS, radar, lidar, and cameras. With its capacity up to 20 tons, T-pod offers us a view of what long-haul logistics might look like in the future. Einride vehicles are already on the road, thanks to projects with companies like DB Schenker and Lidl.

Autonomous vehicles are not radically changing the delivery models of logistics just yet, someday they will be. Drones, on the other hand, have made a bit more progress. Not only are drones relatively easy to operate, but they are also able to avoid traffic, and their environmental footprint is minimal. Plus, the average drone delivery costs 74 cents.

Amazon completed its first air delivery in December 2016 and has been testing drones of varying size, speed, and capacity since. Austrian post has been doing the same since 2017. Curiously, it has been deploying drones predominantly in the mountainous areas. In fact, delivering in remote locations or areas with lower accessibility showcases a remarkable niche application of this transport method.

IoT for transparency

Internet of Things in Logistics Report. Picture Credit: DHL/CISCO

The Internet of Things (IoT) is a powerful mechanism that has the potential of bringing every step of the logistics process under supervision. It is expected to be implemented on a mass scale in the future, as Post and Parcel companies feel the need to respond to customers’ increased demand for transparency and ease of traceability. By adding enormous value to logistics companies, it is likely to become an irreplaceable tool of asset management. In its report, the US Postal Service estimated that just by implementing IoT to predictive maintenance of delivery vehicles and fuel management tools, it could annually save $US190 million.

Subjecting all physical objects involved in the process to constant analysis naturally produces an unprecedented volume of information. The obtained knowledge can be used in various ways, not only to further optimize each procedure but also to respond to risks. Sensors placed on delivery vehicles can assess whether there has been an issue preventing a successful delivery, while temperature and humidity sensors constantly guarantee quality assurance and non-interference with the package.

According to DHL, embracing IoT significantly boosts operational efficiency while serving as a safety net for blind spots. In fact, the company successfully created a robust interface that extracts data from all elements in the warehouse environment.

Proper implementation and interconnection have the ability to make above-mentioned technologies progressive and powerful tools that are going to optimize and accelerate deliveries. Connecting all aspects of the logistics process in a fully functional interface entails new roles for many human workers. Rather than merely carrying out tasks, they become operators and supervisors. This way, companies can achieve greater individual proficiency and overall productivity.