#11 Future of Autonomous Vehicles – “Future of Logistics” Series

#11 Future 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 blog post, we looked at the current development of autonomous vehicle (AV) technology. In this post, we are going to explore the potential ways AVs could operate in the future and the benefits.

 

Possible stages of AV adoption in logistics

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.

AV Stages

Stage 0 – This is today, where all driving and deliveries are done by humans.

Stage 1 – Next, truck drivers will operate semi-autonomous cabs. Last-mile driving and delivery will still be carried out by a human. As mentioned in the last post, autonomous trucks are easier to adapt than other vehicles because driving on motorways is considered less complicated than urban streets.

The immediate benefit of using an AV at this stage is that truck driving hours could be extended. With motorway driving performed by an AV, truck drivers are only required in complicated driving situations. Therefore, with time for drivers to rest on the motorway, driving hours could be extended.

Stage 2 – At Stage 2, autonomous trucks operate independently. Last-mile drivers will operate semi-autonomous vehicles and deliver manually.

At this stage, big-bulk goods transport from airport, ports, national/regional distribution centres by trucks can be performed 24/7. The benefit is that motorway traffic in the day could be reduced, since trucks can carry out deliveries during night hours.

Then, by using semi-autonomous vehicles for last-mile delivery, van drivers can provide better customer service. With vans doing the bulk of the driving, the main job for humans will shift to delivery, and they can spend their time during the journey communicating with customers or other team members.

Stage 3 – Finally, all vehicles used in the delivery process are autonomous. Even delivery to doors could be performed by robots or drones.

The benefit of using an AV at this stage is that everything could be transported and delivered 24/7, regardless of size or type. 24-hour last-mile delivery can include non-food packages, meal orders, grocery and anything else.

 

Other possibilities

In the future, vehicles could be mixed-use and flexible.

Mixed-use vehicles

In the future, we may have mixed-use vehicles. Passengers and delivery orders could travel in the same vehicle. The travel route for passengers will be spontaneous and customised to their destinations. On the same route, drones will take off and deliver orders when approaching near the delivery destinations. On top of this, if the vehicles are autonomous, the transportation service can run 24/7.

With this model, transportation capacity can be maximised, so the fuel consumption and the damage to environment can be minimised. On the other hand, for passengers and delivery customers, they can enjoy faster travel and faster delivery.

Indeed, each compartment could be made flexible, depending on requirements.

Other Benefits

Once all the vehicles in the logistics process are autonomous, the distribution and delivery will be much more efficient. AVs will reduce the waiting time for customers to receive orders and will provide the flexibility to receive orders at preferred timing. Together with the use of blockchain, robotics and AI, AVs can make the journey of goods from manufacturers to customers fully autonomous.

If all the vehicles on the road are autonomous and follow the orders from a central hub, traffic lights will be redundant and traffic congestion will be reduced. The central hub will give driving/braking orders to vehicles, so overall traffic can run in the most efficient order, making traffic lights unnecessary. Since all the vehicles would be controlled by the same central hub, vehicles can accelerate and brake at the same time, which saves time between vehicles as they start moving.

AVs can also potentially reduce human mistakes. With all the possible driving scenarios being built in the central database and being updated with live data collected from vehicles in the network, the central database will be much more knowledgeable than any individual human driver.

Summary

Autonomous vehicles will probably be adopted into the logistics network over a period of time in phased stages. At each stage, the adoption will bring more benefits than the last and the maximum impact of these benefits will be seen when the entire transport network is automated.

But it’s not all plain sailing and in the next post, we will look at the potential risk and impact of AVs on the logistics industry.


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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One Billion Packages in One Day

One Billion Packages in One Day

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 China, Singles’ Day (11th November) is an annual shopping festival, like Black Friday and Boxing Day in the western world. Alibaba has successfully turned this day, which is a celebration of being single, into the world’s biggest online shopping event.
2018 Singles’ Day was a milestone for Alibaba, as it was the first time single-day package volumes surpassed the 1-billion benchmark. This blog post is going to look at the numbers, which in turn reflects the logistics network working behind the scenes of this shopping fiesta.

 

2018 Singles’ Day
Singles’ Day Sales and Packages Volume from 2009 to 2018

Singles’ Day Sales and Packages Volume from 2009 to 2018

2018 Singles’ Day Sales by Time of the Day and Comparison to Previous Years

2018 Singles’ Day Sales by Time of the Day and Comparison to Previous Years

Click to expand                            (source: www.alizila.com, wallstreetcn.com)

The total sales of 2018 Singles’ Day was CN¥213.5 billion, which is £23.6 billion or US$30.7 billion. By Comparison, in the UK, the one-day total sales of 2017 Black Friday was £1.4 billion and 2017 Boxing Day was £4.5 billion (source: BBC, Daily Mail).

In the US, 2017 Thanksgiving Day, Black Friday and Cyber Monday combined sales was US$19.6 billion, where US$14.5 billion was online (source: Practical Ecommerce)

The Logistics Network

Alibaba, not only as a platform for retailers but also for logistics partners, was able to cope with this large volume of packages mainly thanks to its own logistics data network, called Cainiao (means “Rookie”). Cainiao was established in 2013 by Alibaba to assist its retailer clients provide better delivery experience to their customers.

Cainiao is a large network of 3PL partners, drivers and warehouses, which expands to the most remote areas in China and beyond the border to rest of the world. However, what really empowers the network is not the physical network, but the enormous data it captures in the network. It uses big data to predict product stocks, plan driving routes, create package sorting solutions etc. Without all the elements of Cainiao working together, Alibaba would be unable to meet its Singles Day delivery commitments.

About Cainiao Network (by 31st December 2017)

About Cainiao Network (by 31st December 2017)

Click to expand

Summary

The Chinese economy is evolving from export-focused to consumer-focused. Previously China leveraged the large population as a source of manufacturing labour to support the export economy. Now China is turning this resource into an advantage again, as a source of generating demand and pumping up the consumer economy. Alibaba, together with many other technology businesses, has seized the opportunity to grow its own business as well as contributing to push the transition forward.


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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#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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#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.

Let us know your feedback

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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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