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Physical Internet Logistics Revolution May Not Be PI In The Sky

The ubiquitous intermodal containers that we use to move goods around the world didn’t pop up overnight. They went through years of design and size changes before being standardized by ISO standards in 1970 and regulated by the International Conventions for Safe Containers by the Maritime Consultative Organization in 1972.

Now think about the huge role the humble container has played in global commerce and logistics and imagine how much more complex things would be if containers came in a myriad of shapes and sizes.

Implementing a sea change like that isn’t easy, but it’s relatively simple compared to what the Physical Internet Initiative (PII) hopes to achieve. This collective has a vision for a complete overhaul in the way products are moved, stored, realized, supplied and used throughout the world. PII claims the physical Internet (PI) will improve economic, environmental and social efficiency, and some of the heaviest hitters in logistics are involved: Boeing, Chep, P&G, Volvo, HP, Walmart and J.B. Hunt, for example.

A complete overhaul for logistics

The goal of PII is to ultimately create what it calls the “logistics web.” Much like the Internet was enabled by every node in the network adhering to one standard protocol (TCP/IP), the logistics web relies upon a new set of standards and protocols that allow goods to move seamlessly through connected and shared networks of lanes and distribution centers. Continually connected, real-time visibility into the location and state of any item in the logistics web is instantaneous, PI would have the ability to change its routing as conditions dictate. Looking even further ahead, this process can be automated so that every object in the web is following its optimal path.

A new type of modular container is the catalyst to make the physical Internet possible. Called π-containers, these new “black boxes” are envisioned as eco-friendly, standardized worldwide, and able to be assembled in virtually unlimited combinations to accommodate different freight volumes. A tenet of PI is encapsulation, which dictates that every item fits within a configuration of π-containers so the network only has to be concerned with how to move one standard unit. These new containers will be able to communicate with each other and every node of the supply chain, optimizing and automating their journeys as they move.

From here to there

The first e-mail was sent in 1971, the first e-commerce transaction with a credit card happened in 1994, and the first video uploaded to YouTube was in 2005. Though it may sometimes seem as if the Internet went from zero to sixty practically overnight, the truth is it was a much longer process that didn’t always take the avenues or produce the outcomes expected. It is likely that if the physical Internet succeeds, it won’t look like what is being predicted today.

Consider how much deliberation and consideration must be given to any design before it can be standardized. The π-container, the fundamental building block of the logistics web, will likely go through several iterations guided by input from shippers, carriers, and regulators before it can ever be put into play; it may not look a thing like what is envisioned today. The same can be said about the nodes and networks that will make the physical internet function. The design of the network and the shared resources are interconnected, so a change to any aspect sends ripples that amplify as they flow through the web.

Driving toward critical mass

Success of the physical Internet relies heavily on the development and implementation of standards and protocols agreed to and adopted by all supply chain stakeholders. It also means many resources such as trailers, warehouses, and delivery vehicles will be shared. If you have a hard time believing players like UPS and FedEx will be reluctant to relinquish this level of control, you’re not alone. Competitive advantage and proprietary design are much larger hurdles than they ever were for the Internet, which saw standards developed by academic and regulatory interests over commercial entities.

However, the claims of efficiency gain potential that PII makes ring true to shippers and carriers alike. Trucks do ship too much air, travel empty too often, products do sit idly too long in the supply chain, too many items are never sold before they perish (especially food), and moving freight in and out of cities is extremely difficult. There may be a day soon when these issues become so large that corporate interests cooperate to protect themselves and their industry. Unforeseen natural, political, or economic events could also accelerate this process. Think of the changes that ecommerce, via Amazon and others, have made on the small parcel industry as their service levels have increased to the point where Amazon is predicting what you want and ship it to you before you agree to the purchase.

Advancements in technology are on the verge of transforming transportation, including things like self-driving trucks and drones. Open systems tend to foster more ingenuity than closed or restricted architectures, and the PII cooperative involves enough influential entities to move the needle on pushing the industry toward more shared resources and increased standardization. Exactly how fast or slow the change process is will be anybody’s guess, but it is inevitable that supply chains progress toward greater efficiency. It’s a pretty good bet that PII is envisioning a future that will take shape in one form or another in the future.

A lifetime Institute of Packaging Professionals certified packaging professional, Chainalytics’ Senior Packaging Consultant Eric Carlson helps clients manage a high degree of complexity that stems from their unique combination of scale, variability and geography.

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