SMART LOGISTICS IN THE SMART CITY

Although the term “smart city” is not entirely new and has appeared in the public space a good dozen years ago, it is difficult to pin down and adopt a single definition. We can look at smart cities in terms of sustainability, efficient use of infrastructure, ability to quickly adapt to the ever emerging climate, social, economic, as well as epidemiological challenges, but also considering innovation and implementation of new solutions. The last criterion according to the Urban Movement Congress can be divided into several stages, actually generations, among which we can distinguish:

• Smart City 1.0 – an approach that has a focus on new technologies and implementing them without full awareness of the benefits and potential risks. Strong business and technology lobby, focus on technology development, business facilitation. Most completed smart city projects around the world fall into this category. This approach is now being heavily criticized.
• Smart Cities 2.0 – in this generation, a much greater role is played by city governments, they are the initiators of change and choose technologies and solutions that they consider beneficial for the city. City officials are partners in deployments, not just passive recipients. This is the model used by Barcelona or Rio.
• Smart Cities 3.0 – a model that has been in operation for a relatively short time, since ca. 2015. In this variant, it is the citizens of the cities who are the focus. All implemented solutions should respond to residents’ concerns and be consulted with them. Technology and business are receding into the background, and the priority is on participation and solving specific problems raised by residents in a way that suits them.

No matter what criterion we use to verify a city as smart, and no matter what generation of smart city the locality we live in is, we can’t pass by last-mile logistics solutions, which are, after all, inextricably linked to technological solutions, often implemented in partnership with local governments, and certainly beneficial to them, if only in terms of sustainability and responding to the problems of residents and ensuring their convenience.

Before we address the elements of smart logistics in the smart city, it is worth taking a cross-sectional look at how much e-commerce has changed the structure of delivery in urban centers and how much the last mile supply chain model has had to be refined, although it is not actually a completed process, if only because the development of e-commerce is also not an activity that has its finality, and e-commerce is undergoing constant transformation, and this must be followed, after all, by the CEP industry, which is also related to the requirements of customers, city dwellers and cunsumers who pay attention to the speed of delivery. Poles have been condemned for years as the most impatient consumers, and the Direct Link E-Commerce in Europe survey indicates that fast delivery is more important to us than its cost, or even the ability to choose where it is delivered.

Before the advent of online shopping, urban distribution was practically limited to transportation between a distribution center and a shopping mall or stationary store. For the suppliers, the end customer and his place of residence was not important, as the place of purchase was the store. Figuratively, we could prxed it as in the graphic below.

The situation was somewhat different not long ago, after the advent of e-commerce, not only in our consciousness, but also in our shopping habits. Last-mile distribution is not only the movement of goods from distribution centers to points of sale so that consumers can make their purchases there, but also to private homes for delivery of orders or to pick up returns. Suddenly, in a very short period of time, city centers were overflowing with courier vans squeezing through narrow streets, stopping at emergency lights in out-of-the-way places, or turning around where they couldn’t in time to distribute a large number of packages and meet high KPI requirements. The plan of the city center from the point of view of delivery addresses has changed dramatically, and vividly I tried to show this in the graphic below.

It seems that urban infrastructure development has not kept pace with the rapid growth of e-commerce. In every aspect. Overcrowded streets, unaccustomed supply chains, confused customers who, in search of their package, did not always end their steps at a neighbor’s apartment, and very often visited unspecified pick-up points or even company headquarters outside the city. It quickly became clear that a logistics organization focusing only on the distribution center as the last link in the supply chain was fine for stationary trade, but certainly not enough for e-commerce, which is demanding in this respect. This is why, like mushrooms after the rain, we have begun to notice not only the consolidation of courier companies and their acquisition by global giants (who among us still remembers such brands as Siódemka, Masterlink, Servisco, Spedpol, or Opek), but also more and more warehouse space created as courier sorting centers, significantly different from typical distribution centers. The sorting system separated the packages in terms of where they should go, they were sorted using tapes and terminals, and the whole process was supervised by scanners that read the data from the labels. The sorting facility itself is also smaller in area than a typical warehouse and is unlikely to exceed 5,000 – 8,000 sqm. It is most effective when it is a separate building, with plenty of gates for courier vans, so other than the typical truck ramps, and a system of outdoor shelters under which to load.

In the diagram below, I have also included not only courier sorting facilities, or urban warehouses, but also areas that are already seen in many countries in cities, the so-called “urban warehouses. microhubs.

We have already briefly characterized courier sorting facilities above, so let’s move on to briefly detail the elements that describe urban warehouses and microhubs. The former range in size from several hundred to several thousand square meters. Such modules are already being built in major metropolitan areas (Warsaw, Lodz, Wroclaw, Gdansk, Szczecin). They are also a good option in such locations as Bialystok, Czestochowa, Bydgoszcz, Rzeszow and Torun. They are a good answer not only to the pressure of prganizing logistics closer to the end customer, but also to the development of various types of new businesses and start-ups. Since entrepreneurs can lease up to several hundred meters of space in such projects, smaller and medium-sized companies, able to offer individual customers more personalized and dedicated services in modern spaces, will become more competitive. In addition, the option of convenient public transportation will facilitate recruitment, provide access to human resources and improve employee retention, which is especially important precisely for small and medium-sized companies.

What’s different are the microhubs, which will play a role testifying, so to speak, to perfectly organized supply chains that are also ready to implement the latest solutions related to AGVs and, in the future, perhaps even drones. Such units can perform the function:

• modern, PUDO (pick up drop off point) agnostic, that is, a place where we not only pick up the package, regardless of the courier company we choose, but also send a return, or immediately after collection we can unpack the package and decide whether we take the purchase home. In Poland, of course, we associate parcel pick-up with parcel cameras and parcel machines, and according to a Kantar survey published in July of this year, up to 94 percent. online shoppers choose Parcel Post as their delivery method, and as many as 82 percent. Online sellers choose it as a form of shipping. In addition, as much as 82 percent. Polish Internet users believe that Parcel Machine is the most environmentally friendly form of delivery. Poland is also the European market leader in this type of solution and the second global market after China, as there are nearly 30,000 parcel vending machines in our country, but nevertheless it is not impossible that new concepts will emerge, such as in Finland, where Posti has opened a space where it is possible to pick up a parcel, check or try on the contents, return it, leave the packaging for recycling, or even take a photograph that we can post on social media,

• the location from which cargo bikes will leave for customers, which are gaining popularity within urban logistics, with industry experts suggesting that they deliver shipments in city centers 60% faster than courier vans. Such bikes have a higher average speed and can be used to deliver 10 packages per hour (6 for vans). The bikes also reduce carbon dioxide emissions by 90% compared to diesel vans and by a third compared to electric vans. Vans can, of course, move at higher speeds than cargo bikes, but they are slowed down by traffic jams and the need to find a place to park. Cargo bikes bypass traffic jams, take shortcuts on streets closed to automobile traffic, and drive to customers’ doors. Incredibly important is also the fact that the bicycle is able to transport the same volume of shipments that delivery trucks are filled with. Recent estimates from the University of Westminster show that up to 51% of all urban freight trips could be replaced by cargo bikes. So if even just a portion of the deliveries were made by cargo bicycles, this would be accompanied by a dramatic reduction in CO2 emissions, as well as contributing to a significant reduction in air pollution hazards and traffic collisions, while providing an efficient, fast and reliable urban freight transportation system. The 100,000 cargo bikes introduced in Europe between 2018 and 2020 save the same amount of CO2 per month as it takes to fly about 24,000 people from London to New York and back.

• A location that is a loading area for AGVs, or what is known as. autonomous guided vehicles. Vehicles called “Xiaomanlv” are currently driving for Alibaba Group, which has already delivered more than 10 million shipments between August 2020 and March 2022. One such vehicle, which has a range of about 100 kilometers, can carry 50 packages. It will be able to transport up to 500 packages in a full day’s work. This is not the only type of AGV in the network operated by Cainiao, Alibaba’s logistics sister. The Xiaomanlv also has a smaller brother, the XIAO G, which communicates with the recipient via SMS (it sends one when it leaves the base informing that the package is on its way, and another when it arrives at the location indicated in the order). If the building has solutions for the handicapped (entrance ramps) Little “G” is able to deliver the shipment “to your own hands”. Currently, versions of the robot are being tested that allow you to “send” a package (on a similar basis to parcel cameras). The average time it takes Xiao G to dispatch all the shipments on its board is about 60 minutes. Similar vehicles deliver shipments both in China for JD.com and in Japan for the Rakuten platform, which boasts the ability to deliver in as little as 30 minutes, and the vehicles can travel on public roads. The entire process, from placing the order to successfully receiving the shipment, is shown in an interesting video at the link https://youtu.be/n8ncNUzILl0. Not far behind, of course, is Amazon, whose Scout vehicle regularly delivers packages to customers in several US states. Deliveries by autonomous vehicles are not just the domain of Far Eastern countries. In Poland, delivery by a robot constructed by the Lublin-based Delivery Couple company can be ordered, for example, by customers of the FitCake confectionery chain – https://youtu.be/RJvauPL7PNU. The robot was created over a period of about four months, and is largely autonomous, equipped with a camera and GPS, so it can react quickly to what is happening on the road. However, in case of unforeseen circumstances, remote control can be taken over by a café employee who monitors where they are in real time. Charging the device is enough for 6-8 hours. Its driving range is about 3 kilometers (soon even 5 kilometers), which it can cover in 15 minutes. Only a few models have been produced so far, although earlier this year the company secured nearly 1.5 million in funding from several funds to develop and popularize the project.

AGV robots are not only the domain of start-ups or Far Eastern giants, but also European players. A few weeks ago, DPD confirmed the deployment of autonomous robot deliveries in ten British cities over the next 12 months. More than 30 microhubs will have just been opened for this porject alone, which will serve as a warehouse, as well as a robot charging point. I also couldn’t mention our Lithuanian neighbors, where the LastMile courier platform organizes deliveries by three robots along the city’s public streets in Vilnius. Thus, the city became the first European capital to issue such a permit.However, the robots do not move at speeds higher than 25 km/h, have a sophisticated camera system, and have already traveled more than 2,000 km in three months of testing.

It can be said with certainty that we do not yet know all the functionalities of microhubs. Certainly, they will also be able to support delivery drones (although deliveries using them will be rather limited to the cooperation of laboratories and hospitals – if we wanted to deliver packages by drones, there would already have to be several thousand of such devices in the sky in large cities), to be a place for ordering 3D prints, to act as a place for consolidating returns, or to be a dark store, or even a base for underground deliveries (the curious are referred to the Magway project, which has already produced special tubes and created a test section for underground transport with a length of 30 km). A smart city is a city that is comfortable for people and perfectly organized in terms of last mile strategies. Time shows that its evolution is moving us from the level of Distribution Centers as the last warehouse link to an elaborate structure of courier sorting plants, urban warehouses, as well as microhubs, which will play a key role in the logistics of the smart city.This, in a way, confirms the thesis that 2D logistics is moving into three-dimensional logistics, and as a result, not only the goods themselves and where they are delivered, but also where they are shipped to the final customer, is becoming more and more important.