#10 Driving into the Era of Autonomous Vehicles – “Future of Logistics” Series

#10 Driving into the Era of Autonomous Vehicles – “Future of Logistics” Series

Ben Thomas

Ben Thomas

Director, National Valuation

t: +44 207 182 2663 Ben.Thomas@cbre.com

Judy Zhu

Judy Zhu

Associate Director, National Valuation

t: +44 207 182 2683 Judy.Zhu@cbre.com

In the last few posts, we covered the topic of Drones. From this post onward, we are going to have a look at the use of autonomous vehicles in the logistics industry. In this first post, we will focus on the current development before we move on to the future outlook in the later posts.

 

Autonomous vehicles on the road

When we talk about an autonomous vehicle, the first impression is usually a self-driving car, but autonomous vehicles include self-driving trucks, vans, cars, robots, etc. Autonomous vehicles can be used on as well as off road, and even in warehouses and construction sites.

There are many players in this field at moment and we have briefly summarised the companies which are developing autonomous trucks and their latest technology.

 

Trucks

Car manufacturers

For car manufacturers, developing autonomous vehicle is a natural progression. They have first mover advantage, and should have more know-how and existing resources than new entrants into the automobile industry.

In January 2011, Volvo participated in the SARTRE (Safe Road Trains for the Environment) project, in which truck platooning technology was firstly demonstrated. Truck platooning is where a line of trucks automatically follow a lead truck which is driven by a human driver. This technology is an early initiative paving the way for today’s autonomous vehicle.

Platooning

Platooning

In September 2018, Volvo introduced the autonomous and electric concept vehicle – Vera. Other than being autonomous and electric, Vera can connect with others of its kind. Because of this connectivity, Vera is ideally suited to logistics areas, such as ports, factories and logistics parks, where all the autonomous vehicles in the same place can be controlled centrally.

Connectivity

Connectivity

In July 2014, Daimler announced the “Mercedes-Benz Future Truck 2025” plan. The latest update on this plan is the launch of the new semi-autonomous Actros truck in September 2018. These are installed with Active Drive Assist technology, which can operate automatic braking, accelerating and steering. This technology “paves the way to automated driving”.

In November 2017, Elon Musk, CEO of Tesla, unveiled its electric semi-autonomous truck prototype – Tesla Semi, having first mentioned the concept in the Tesla 2016 Master Plan. Compared to the autonomous vehicles by other manufacturers, Tesla claims “Semi is the safest, most comfortable truck ever” thanks to its advanced software and hardware design.

Tech companies

A lot of tech companies have also joined the game, since nobody wants to miss out on this opportunity. The competition of designing autonomous vehicles should also drive improvement in software development.

In August 2016 Uber acquired Otto, the tech start-up focuses on autonomous long-haul trucks. Otto set the record of the longest continuous autonomous truck journey (212 km) from Colorado Springs to Fort Collins in October 2016 (Embark is the latest record holder). This is one of the earliest initiatives of tech companies in developing autonomous trucks. However, this autonomous truck project was cancelled in July 2018, with an aim to focus the resources on developing autonomous cars, before it could be utilised in the Uber Freight business.

Other tech companies like Nvidia and Baidu have also entered this field. They work with existing truck manufacturers to make their trucks autonomous. In the collaboration, they develop software and offer technical solutions by utilising their in-house resources, such as technical talents and databases. For example, in March 2017, Nvidia announced that it is working with PACCAR, the global truck manufacturer, to develop autonomous trucks. In April 2018, Baidu’s Apollo, the open platform for autonomous vehicle developers, collaborated with CiDi, a Chinese truck start-up, to complete its first autonomous geo-fenced highways drive.

 

Technology

Current autonomous truck tests mostly take place on motorways or controlled areas. Compared to autonomous cars, autonomous trucks generally face less complicated driving scenarios, such as pedestrians, traffic lights, cyclists, etc.

Various technologies are being used and developed to enable autonomous trucks to operate certain driving tasks. These include: identifying lanes, keeping distance from the nearby vehicles, changing lanes, responding to emergency vehicles, braking in case of obstacles detected, etc. At present, autonomous trucks still require human drivers to sit in the driving seats. This requires the software to identify moments when they must alert the human driver to take back control.

Identifying lanes

 

 

 

 

 

Changing Lanes

 

 

 

 

 

Braking in case of obstacles detected

 

 

 

 

Keeping distance from the nearby vehicles

 

 

 

 

Some of the fundamental hardware required to develop autonomous trucks include: Camera, Radar, Navigation, LiDAR Sensor, IPC. LiDAR sensors measure distance by illuminating the target with pulsed laser light and measuring the reflected pulses. IPC is an industrial scale computer.

 

Summary

Most car manufactures are considering autonomous vehicles now, as are companies from other industries. There are many start-ups to have been established with an attempt to take a piece of the pie in this industry. Next time, we will take a look at the other autonomous logistics vehicles on the road and off the road.


If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Associate Director of CBRE National Valuation.

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Property Investment Yields | September 2018

Property Investment Yields | September 2018

David Tudor

David Tudor

Senior Director, UK Valuation & Advisory Services

+44 207 182 2689
david.tudor@cbre.com

Market slowly coming to life after a quiet summer

 

  • With very limited activity during August and early days in September, there is very little new stock in the market to influence yield trends or alter the themes of the past few months.
  • As we head towards Q4 and the year end, demand for industrials continues to dwarf the limited availability and command strong yields particularly where there is reversionary potential.
  • Central London activity picked up in Q2 but remains dominated by mainly Asian overseas investors.
  • Retail remains weak with worries continuing over occupiers and rental levels. Some retail parks are trading but the High Street is very difficult.
  • South East and regional offices are seeing reasonable activity and new stock coming to market.

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#9 Potential Challenges for Drones – “Future of Logistics” Series

#9 Potential Challenges for Drones – “Future of Logistics” Series

Ben Thomas

Ben Thomas

Director, National Valuation

t: +44 207 182 2663 Ben.Thomas@cbre.com

Judy Zhu

Judy Zhu

Associate Director, National Valuation

t: +44 207 182 2683 Judy.Zhu@cbre.com

In the last post ‘How Can Drones Impact’, we looked at the impact by drones on warehouse locations and design. In this post, we are going to explore the potential challenges for the logistics industry when it comes to adopting drones.

Regulations

One of the challenges of adopting drones widely in the logistics industry is the restriction imposed by regulations. In most countries, the use of drones is regulated. However, the regulations themselves vary widely across countries and jurisdictions. There are broadly four levels of restriction as can be seen below:

No regulation

In countries like Indian and Qatar, our investigation into publicly available material suggests there is no regulation specifically on the use of drones. Without definitely clarity it could mean there are no restrictions on the use of drones, however conversely it could mean that drones are generally not permitted by existing laws.

Permission/Registration required for certain drones

For some countries, permission or registration with air traffic authority is required only when drones are above certain weight or when flight is above certain height, regardless of the purpose. These countries include Brazil, Austria, Russia, Belgium, Ireland, Australia, Sweden, South Korea and Switzerland. The maximum weight without a permission or registration varies from 250g to 30kg. The maximum height to fly a drone without permission or registration varies from 10m to 120m.

Permission/Registration required for all commercial use

All commercial use of drones requires permission or registration in some countries, such as China, Singapore, Israel, United States of America, United Kingdom and France. In most of these countries, a pilot licence is required to operate drones for commercial purposes.  In some countries, any drone flying outside approved areas requiring a level of permission or registration, no matter it’s for leisure or commercial use. Generally, there are restrictions on maximum heights for flying drones even after permission is granted. The maximum height restriction for most of the countries span from 100m to 150m.

Drones are banned

In Saudi Arabia, the use of drones is banned.

Other general regulations on use of drones

Most of the countries share some general restrictions on the use of drones in the following areas:

  • The distance between drones and airports/military facilities is restricted
  • The distance and height between drones and crowd is restricted
  • Operating drones within visual line of sight
  • Following local privacy regulations when using drones with cameras

As we can see from the regulations above, the general intention of regulations is to ensure the safety of the general public and wider air traffic.

Support System

Before we can adopt drones into the logistics network, an industrial scale support system will be required.

This would need to include a ground-based system to enable drone delivery. As we mentioned in the last post, logistics warehouses will have to change their locations and designs. The operation of lorries and trains may change to adapt also. The changes and the speed at which they are implemented will depend on when logistics operators and warehouse owners start to consider using drones in the logistics network.

Drones will be controlled remotely, so a robust and reliable networking system will need to be sufficiently advanced to cater for the live communication between drones, warehouses and ground transportation. 5G connectivity will help, but the roll-out of the 5G network in the UK isn’t set to begin until 2020, while countries such as South Korea, China, Japan and the US plan to roll out in late 2018 or early 2019.

Finally, underpinning all the various support systems is a human element. We will need a large pool of IT and engineering talent to support the development of hardware and software capable of delivering a fully functional drone network. The challenge right now is that the number of students choosing to study Computer Science and Engineering is in decline. Additionally, the unemployment rate for Computer Science students remains the highest among all the graduates. This could mean Computer Science students are not equipped with practical skills required by the growing market demand.

Solutions

Despite all the challenges, there is enthusiasm to adopt drones in the logistics network. To maximise the commercial value within individual national legal frameworks and to establish support systems, drone technology will need to be improved.

Examples of this drive for improvement can be seen at Animal Dynamics Ltd, who are taking inspiration from how the biomechanics of the animal kingdom have evolved in designing innovative drones. Skyports Ltd are currently taking unused commercial roof space and exploring if specific drone landing pads can be installed to help service consumers and improve income for landlords. Both presented at CBRE’s ‘The Power of Three’ logistics conference.

Humanity has always created new technologies to tackle challenges throughout history to improve and progress civilizations. This will not stop now and current challenges to the adoption of drones will, in time, be overcome.

In the next blog post, we will switch focus from flying drones to autonomous vehicles on the ground.


If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Associate Director of CBRE National Valuation.

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#8 How Can Drone Impact – “Future of Logistics” Series

#8 How Can Drone Impact – “Future of Logistics” Series

Ben Thomas

Ben Thomas

Director, National Valuation

t: +44 207 182 2663 Ben.Thomas@cbre.com

Judy Zhu

Judy Zhu

Associate Director, National Valuation

t: +44 207 182 2683 Judy.Zhu@cbre.com

In the last post “Drones are here”, we explored the potential use of drones in the logistics industry, both inside and outside the warehouse. In this post, we are going to look at some of the potential impacts that drones will bring to the industry.

Warehouse Locations

A typical delivery chain sees goods travel from a manufacturer – to a national distribution centre – to a regional distribution centre – couriered by last-mile transportation – then eventually reach the consumer. In this system, various transportation types are involved, such as vehicles on road, ships and railways. Access to these transportation networks is an important decision-making factor on choosing the locations of warehouses (which we previously considered, click here to read).

However, taking drone delivery into consideration, the need to have a warehouse close to strong infrastructure could be less restricted. Most commercial drones developed at the moment are suitable for last-mile delivery, with small-size delivery drones able to carry goods of up to 5lb in weight for a 10-mile trip on average. These drones could allow for small warehouses to be located in rural areas where homes are spread over a wide area with rural road access. This will expand the delivery coverage, decrease the delivery time and save on truck fuel and wear.

Drones don’t just have to operate in isolation, but can work collaboratively with other vehicles. For example, small-size delivery drones could be dispatched from an HGV or a larger-size drones. Current technology allows for a heavy-lifting drone to lift and move a payload of up to 30kg. As technology improves, these larger drones could act as airborne mobile distribution centres, which could possibly replace the current small local warehouses or even regional centres. Indeed, there is the potential for HGVs to be mobile centres currently. This system can bring flexibility to delivery as we’ve never experienced before, with the routes of the hub vehicles changing based on real-time demand. If adopting this system brings down the overall cost of delivery, the amount of logistics warehousing required could also reduce.

Warehouse Design

With drones included in the delivery system, access to a warehouse will no longer be limited to ground level as drones can utilise the vertical space. Inside a warehouse, a multi-level conveying system could connect the picking area to drone loading docks, where small size packages would be collected by drones before they head out to deliver. Another possibility could remove the conveying system altogether with picking robots working in tandem with drones. Robots load packages directly to the drones which then fly directly from the picking area to their delivery destinations.

Specific Drone Maintenance Units will be required for the drones to be charged and fixed. This area will likely require less land space, since drones can be placed at multiple levels.

Use of drones in delivery will not only change the design of warehousing, but also the definition of it. As we mentioned above, in the future HGVs and drones could be used as mobile warehouse hubs. This, in turn, may possibly extend the definition of a warehouse beyond immovable assets.

Summary

At present, the longest distance a delivery drone can travel with package is 161 miles, but how far could the distance be a few years down the line? Delivery companies are testing to stretch drone payloads to 1 ton, and it begs the question of how this will impact the logistics industry. None of us have the answers but there is one thing for sure: placing drones into overall logistics network has the potential to bring unexpected flexibility and possibility.

In the next post, we are going to explore the potential challenges for the logistics industry when it comes to adopting drones.


If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Associate Director of CBRE National Valuation.

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UK Investment Yields | July 2018

UK Investment Yields | July 2018

David Tudor

David Tudor

Senior Director, UK Valuation & Advisory Services

+44 207 182 2689
david.tudor@cbre.com

Pressure builds on retail sector pricing following negative occupier news whilst all other sectors remain stable/stronger.

  • With the exception of retail, demand remains strong for the limited prime assets available with strong and secure income streams, and for clear value add opportunities. Industrial remains the most favoured sector.
  • The High Street is now directly suffering from the turmoil in the occupier market with all yields moving out, particular in weaker locations where rental tone remains uncertain. All but the very best shopping centres are suffering a similar fate.
  • Offices continue to provide positive returns with good demand for multi let regional properties and more stock coming to the market in the M25/South East sector. Central London continues to be dominated by overseas demand.

 

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#7 Drones are Here – “Future of Logistics” Series

#7 Drones are Here – “Future of Logistics” Series

Ben Thomas

Ben Thomas

Director, National Valuation

t: +44 207 182 2663 Ben.Thomas@cbre.com

Judy Zhu

Judy Zhu

Associate Director, National Valuation

t: +44 207 182 2683 Judy.Zhu@cbre.com

In the last three posts of The Future of Logistics series, we focused on the topic of AI. Now we are going to turn our attention to the use of drones in logistics.

 

What are the possibilities?

Drone Delivery

Drone delivery has been a widely studied and tested use of drones in the logistics industry. Compared to delivery by traditional vehicles, drone delivery has the potential to be more effective in last-mile delivery to places where road access is limited.

In March 2018, SF Express, one of the biggest Chinese delivery operators, was granted the first domestic drone operator licence in the country. The company aims to use drones to deliver goods to rural and sparsely populated areas in China. With the existing well-developed mobile network in the country, drone delivery may unlock the potential of another online shopping wave in China.

Drone delivery can not only solve the road access problem, but also the time problem. Zipline is a company focusing on the drone delivery of medical supplies. In Rwanda, the company has delivered 7,000 units of blood over 5,000 drone flights. Doctors can have blood delivered within 30 minutes from the time they send the text message to Zipline. Drone delivery enables doctors in Rwanda to deal with emergency cases they couldn’t predict. The model can be seen in the infographic below:

Source: Telegraph.co.uk

Drones in a Warehouse

Drones can be used in warehouse management, such as in inventory management and warehouse security.

Drones are already being used to scan barcode on goods in warehouses. Two drones can do the work of 100 human workers within the same period of time. However, as drones don’t need rest, they can work day and night. In addition to speed, drones increase the accuracy too. Drone makers claim that scanning accuracy by drones is close to 100%.

In June 2018, Nestlé and XPO announced that they are going to jointly build a 638,000-square-foot digital distribution centre in the East Midlands, where drones and robots will be used. Drones will patrol within the facility and check the inventory across high shelves. The data collected will be used to help better manage the warehouse space and staffing.

Drones can also be used as a part of the security surveillance system for warehouses and other industrial facilities. Drones can be installed with various devices for different purposes.

  • Camera

Security surveillance drones are most likely to have cameras installed, for the purpose of live monitoring, recording and identifying.

  • Motion sensor

Motion-sensitive drones can perform security tasks with less human operation. For example, drones can be activated by abnormal movements and follow the objects while sending out alerts.

  • Thermal sensor

Thermal-sensitive drones can detect abnormal human/animal movements, similar to motion-sensitive drones. Other than that, thermal sensors can also allow drones to detect dangers in warehouses, such as fire and malfunction of machineries. Other sensors can help drones in detecting other dangers, such as gas or chemical leaks. This type of drone is especially useful to carry out security tasks where there is potential danger to humans.

  • Artificial Intelligence

Artificial intelligence can make drones “smart”. It allows drones to perform security tasks 24/7 with minimum human operations and to learn from every task.

 

Drone & Device

Drone Inspection

Drones can be used to inspect buildings and industrial facilities from different angles, which is either difficult to achieve by human or costly to do with certain tools or equipment.

Drones can give views of buildings from a high level, including the roofing and tall infrastructure such as chimneys and silos. Drones can inspect buildings or facilities spread across a wide area quickly and efficiently. This is especially useful in a large distribution park or a shipping port. Drone inspection can be operated remotely, which will save human surveyors time and energy to physically travel to the site and carry out inspections. It offers the potential for surveyors to work more efficiently with the help of drones.

 

Summary

Drones are here. They are already being used in many different areas in domestic and commercial environment, yet the scope for other uses and innovations is changing rapidly.

But what challenges are there for drones to be fully adopted? How will drones impact on logistics industry? We will have a look at these questions in the next post.

 


If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Associate Director of CBRE National Valuation.

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