24 September 2020
In 2021, 2.1 billion shoppers will order online. They will contribute to an incredible boom in e-commerce, growing from £2.7 trillion in 2019 to £5 trillion in 2023; that’s 22% of all anticipated retail sales the world over, according to Statista.com. The UK alone contributes £688 billion per annum to this total, which is only set to rise.
This seismic shift in consumer behaviour brings with it an ever-increasing demand on the logistics sector – immense pressure on efficiency where fractions of a pound saved on parcels, pallets and even containers can add up to game-changing competitive advantage for shippers. Where order-to-fulfilment timelines are shrinking to next-day or even same-day on an exponentially wider variety of items, a simple swipe on a smartphone will collectively have profound knock-on effects for how truckloads move, warehouses function, shipping lanes and ports are managed.
In this emerging landscape, trillions will be invested in the coming decades to keep pace with shifting consumer behaviours and re-shape the face of logistics at large. And as with any generational shift, there will be good and bad as we move collectively towards an incredible future of possibilities.
To look at the good, we must recognise we didn’t get to our incredibly interconnected and “on-time” world by accident. The global logistics sector we have now represents one of the foremost benchmarks of collective human accomplishment. In the past decade alone, our ability to process vast amounts of freight has got better as technology integration allows for improved tracking across complex global supply chains in real-time.
Just look at DP World London Gateway: it didn’t even exist a decade ago. Now it is the UK’s most integrated, sustainable and technology-advanced logistics hub, home to industry-leading retail brands such as Made.com and Dixons Carphone. The proximity of London Gateway’s logistics park to its on-site port allows retailers to work to shorter lead times and gives them a level of visibility and flexibility, up to the very last moment, that cannot be achieved anywhere else.
The level of visibility and integration we have been able to achieve is laying the groundwork for a new generation of automation. Systems like smart order routing allow better management of fulfilment across geographies, as warehouses utilise increasingly sophisticated robotics to pick and pack packages, and move pallets, at vastly increased speed and lower cost. Soon, increasingly sophisticated AI systems will sit over these operations. These systems will integrate human and machine through augmented reality realising efficiencies in fractions of a second that can collectively add up to thousands of hours, and millions of pounds, each year.
Automation at DP World London Gateway comes via its gate system, truck handling, stack management, shuttle carrier management systems (and potential to one day fully automate shuttle carriers) and through optical character recognition on quay cranes. What’s more, automation is not replacing jobs. Rather, we are leading a shift in skill-sets for our staff and creating new roles in IT, planning, engineering and control.
Arguably the worst aspect of all this progress is the underlying carbon footprint of increased freight movement on the planet. Freight is anticipated to grow from 2108 tonnes of CO2 emissions in 2010 to 8132 in 2050, according to the International Transportation Forum. Such a carbon impact is also bad for business, undercutting demand by increasingly eco-conscious consumers, and driving up costs.
But the bad here also speaks to a broader opportunity. Advancements like smart order routing and multi-location inventory can combine with lighter, reusable packaging to lessen the carbon impact of moving freight – while additive manufacturing of key components can, in certain cases, remove it altogether.
By locating a logistics park on the same site as a container port, DP World London Gateway has been able to cut unnecessary road miles from hauliers moving goods from point of import to storage and distribution centres. Along with sea freight as a preferential alternative to air cargo, DP World in the UK is committed to reducing carbon emissions and minimising its impact on the environment.
By investing hybrid mobile equipment and fully electric vehicles as well as ensuring all new warehousing facilities meet the BREEAM standard for sustainability, we’re building a safe, secure and vibrant society through strategic investment. In addition, we’ve removed 12,800kg of single-use plastic – equivalent to the weight of 9 whales – from our supply chains since September 2018.
While the near-term potential for efficiencies are significant and critical to competing in an increasingly unforgiving e-commerce ecosystem, the potential to drive continued efficiency over the long term is nearly limitless. Within our lifetimes, expect seismic shifts in how freight moves including evacuated tunnels connecting directly to ports, whizzing containers at near the speed of sound across continents, directly to last-mile drone delivery points – all controlled by AI.
As AR, smart speakers and a wave of new technologies continue to find new ways to engage consumer buying and drive the growth of e-commerce, the efficiencies needed for brands to compete and win will be found in logistics - and the possibilities with DP World in the UK are limitless.