Logistics 2030: Trends and Scenarios

I'm sure you've all heard/read about AI, robotics, drones, 3D printing, autonomous driving and so on. These are exciting topics and technologies that will shape the future of logistics. But apart from these individual forward-looking technologies and new developments: What could the scenarios in urban logistics look like around 2030?

In October 2018, Roland Berger published a study on this topic and described 4 possible scenarios. But first: why is the focus here on urban logistics in particular?

Around 77% of Germans live in cities or metropolitan areas. Online retail is growing steadily; even before coronavirus, sales were increasing by around 8-10% a year. Customers are becoming more and more demanding and are always looking for the fastest and most individual delivery ("same-day delivery", etc...). Retailers are also becoming more demanding. Orders/deliveries no longer take place in fixed time slots, but should be as flexible as possible, even for smaller quantities.

There is therefore an increasing need for action in urban areas in order to reconcile the increasingly conflicting interests of the various players, such as the city, citizens, logistics service providers, retailers, etc.

The "city" ecosystem is affected by the massive consequences of increasing delivery traffic: Delivery vehicles often park in violation of regulations, block the streets and contribute to increased particulate emissions / greenhouse gases. There is a lack of logistics space in the city to optimize supply chains. There is also a shortage of staff, especially drivers, which leads to higher wage costs. Subcontractors in urban logistics are finding it increasingly difficult to cope with the growing challenges.

Innovative and sustainable solutions are needed, such as deliveries by cargo bikes or drones, shared packing stations from several providers, micro-depots as small warehouses in the city, city hubs, etc.

Ultimately, however, individual solutions are not capable of making urban logistics truly sustainable. It is up to the city and the individual providers to steer development in the right direction.

The 4 possible scenarios identified by Roland Berger for the direction in which urban logistics could move in the future are:

1. Wild West

The lack of regulation makes it easy for new providers to enter the market. Competitive pressure is increasing. The trend towards faster, more flexible and smaller deliveries as well as a lack of cooperation between providers means that there are more delivery vehicles on the road, but they are not being used to capacity. While both B2B and B2C customers benefit from greater availability of goods, the attractiveness of urban areas is declining.

2. Regulated Diversity

In this scenario, the city intervenes to regulate urban logistics traffic more efficiently, reduce the volume of traffic and thereby improve the quality of life for citizens.

In a highly competitive environment with little standardization / cooperation between providers, there would be less scope for them to satisfy demanding customer needs compared to the "Wild West".

3. City-wide Platform

All urban goods flows are bundled and optimized across all providers via a city platform. The city as well as other providers can make decentralized storage areas available. Supply and demand for delivery from these decentralized storage areas come together via the platform, which is also used for commissioning and billing. The platform offers players transparency regarding available delivery capacities and requirements and opens up new possibilities in terms of business models and fleet composition. Thanks to artificial intelligence, the best routes/the best price are found in each case. As a result, both customers and citizens benefit from a guaranteed service level.

4. Coexistence of Giants

There are a few large, commercially oriented platforms that compete with each other. The platforms bundle all capacities. Vehicles, personnel, space, etc., can be used at short notice and by different service providers. Logistics providers that are not affiliated with a platform will gradually disappear from the city. Customer requirements are driving innovation among platform operators. B2B and B2C customers benefit from fast and customized deliveries.

The course must be set now to make urban logistics sustainable and efficient in 2030. The "Wild West" scenario must be prevented, as this would be associated with a massive increase in inner-city traffic and an even greater obstruction of traffic flow. Cities and companies must work together to counteract this. The measures taken should aim to improve the quality of life in the city.

By creating short-term parking bays, lanes for cargo bikes and renting out space for micro-depots, local authorities can make the work of logistics service providers easier. Investments in low-noise logistics and the expansion of night-time logistics should be promoted. Rules that prohibit and punish traffic-impeding behavior must be created.

Among other things, companies are required to adapt their business processes to the regulatory framework, expand their night logistics by using e-vehicles and take any city-mount fees into account in their products and delivery processes. Synergies can be created through cooperation with other companies and common standards in order to make logistics more efficient.

What do you think about it? Perhaps you have ideas you would like to share with us?