Emerging technologies are revolutionizing businesses across a broad spectrum of industry sectors. We see it in manufacturing with “Industry 4.0” where smart technology and real-time data are used to increase productivity and reduce costs (for example, 3D printing). We see it with the future of self-driving cars in the automotive industry; and we even see it in our own industry with the launching of online peer-to-peer insurance sites and other platforms. Disruptive and emerging technologies are now set to also reshape the shipping industry.
One such technology is the hyperloop, which uses vacuum tubes to push capsules containing cargo or passengers between locations at speeds exceeding 550 mph, reducing the hours of travel time down to a matter of minutes. This technology, a mere idea of inventor and entrepreneur Elon Musk’s (Tesla) just a few years ago, has now been fast-tracked, as Hyperloop Transportation Technologies announced earlier this year that it has received a permit to begin construction of a five-mile stretch of a full-scale passenger and freight Hyperloop system next to California’s I-5 freeway. The company, according to Global Trade Magazine, will be ready in just 36 months.
Hyperloop has the ability to transport standard shipping containers, while averting many of the hassles of overbooked cargo ships, closed ports, and bad weather. It will also be less prone to accidents and casualties, given the system’s isolation from other traffic. Moreover, it will ease traffic congestion on America’s roads. According to Engadget, “A huge cause of congestion on roads is freight traffic—eighteen-wheelers carrying cargo containers from ports to warehouses. The Port of Los Angeles is one of the largest points of entry for containers into the U.S., and much of that is taken east by road. Imagine if, instead, containers were pushed via Hyperloop to a new logistics center in Nevada; it would cut thousands of road journeys each year. Yup, Hyperloop could even do something to reduce LA’s notoriously awful traffic.”
Hyperloop is just one of a number of emerging technologies on the scene that could potentially redefine logistics. The use of drones, for instance, by logistics companies for product delivery could well be on the horizon. According to one report, about 31% of manufacturers and retailers want to see logistics companies use drones for product delivery, even though the majority of 3PL companies are not ready at this time. Nevertheless, the opportunity for drones may be in warehouses and distribution centers in the not-so-distant future. Peter Sondergaard, senior vice president and global head of research at Gartner, told an audience of supply chain executives that he predicts that five years from now drones will be standard in the supply chain. Moreover, he said, “By 2018, 5% of companies with complex picking operations will pilot mobile self-navigating and smart warehouse robots.”
Additive technology will also impact shipping and logistics with many manufacturers and retailers using 3D printing to produce products. Additive technology is a slow procedure in which a printer reads a digital blueprint and methodically drops building material according to a set of instructions, creating a final product that’s built up tiny layer by tiny layer. According to Global Trade Magazine, “on-demand production has huge implications for the supply chain, not to mention favorable environmental results via reduced transport, pollution, and production waste.”
Ed Morris, director of NAMII, the federally funded initiative set to define and promote the future of the 3D industry, underscores the effect on this technology on the logistics industry: “In terms of the impact on inventory and logistics,” he says, “you can print on demand. Meaning you don’t have to have the finished product stacked on shelves or stacked in warehouses anymore. “Whenever you need a product,” he explains, “You just make it. And that collapses the supply chain down to its simplest parts, adding new efficiencies to the system.” Those efficiencies run the entire supply chain, from the cost of distribution to assembly and carry, all the way to the component itself, all the while reducing scrap, maximizing customization and improving assembly cycle times.
Everything from material handling to inventory management to supply chain management to procurement will be impacted by these and other emerging technologies. These innovations will help significantly increase the interconnectedness across companies, and have the potential of reducing costs, timelines and processes.
Roanoke Underwriting specializes in providing insurance solutions to importers, exporters, logistics service providers and transportation intermediaries and is available to assist agents and brokers in securing the coverage your insureds require. For more information about our products, contact one of our specialists at 1.855.213.4545.