Digital Transformation in Logistics took centre stage at Birmingham’s recent Tech Week. Stakeholders were invited by Logistics UK, the industry’s representative body, for the second annual Digital Transformation Conference. They debated relevant topics, from cyber security to container tracking, through to express parcels and modal shift, all conducted in the city that sits at the heart of Britain’s burgeoning cargo carrying industry.
“Logistics is a vital part of the skills sector for the West Midlands, says Helene Dearn, who heads up the Employment, Skills, Health and Communities directorate at the local government for the region, and delivered a keynote address to the conference. From her point of view, the industry needs to attract a younger generation – a recurring theme among thought leaders in the sector. Dearn says logistics can establish a pathway for young people to bring in new ideas.
Young people, who can relate to the remote working environment, can be attracted to the industry, if logistics gets its tech-savvy credentials out there, explained Helene Dearn. She said relating the world of logistics to their digitally native experiences, such as the fast-moving and decision-driven world of gaming, for example, would leave them hardly fazed by remotely operating a reachstacker from an office in Birmingham.
Logistics at the centre
That level of remote working may be in the future, but Kevin Green, Director of Policy, Marketing and Communications at conference hosts, Logistics UK, believes it’s not science fiction; it’s a matter of science future. Green is well aware of how important that is to the region. In Birmingham, logistics accounts for 12% of all employment. It has effectively usurped Birmingham’s ‘city of ten thousand trades’ reputation. The region now hosts 22% of the entire UK industry and is at the heart of what’s become the Logistics Golden Triangle.
Birmingham’s leading position is easily demonstrated. Three busy intermodal rail terminals fan out from the city centre. Freightliner Birmingham is almost adjacent to the huge HS2 high-speed rail development. Hams Hall (a former power station site) and a repurposed colliery site at Birch Coppice, both on the outskirts of the city, are also among the UK’s busiest inland intermodal facilities. There is also a huge effort underway to address a chronic shortage of warehouse supply.
The Office for National Statistics noted that, by 2021, the number of UK business premises classified as transport and storage was 88% higher than in 2011 and 21% higher than in 2019. Since then, rail-connected developments in excess of 100,000 square meters have become commonplace. Daventry Intermodal Rail Freight Terminal (DIRFT) and East Midlands Gateway are well-established examples. SEGRO Logistics Park Northampton is already partly sold or let, even though it’s still under construction. Even the hugely controversial redevelopment of Radlett military airfield near leafy St Albans has been given the green light for take off. Tracking all that traffic has never been more complex, nor has the logistics industry ever been more entwined in the health of the UK economy.
“It’s not just when the containers are moving around the world on ships,” says Kevin Green. “There is some quite sophisticated technology to do that, and monitoring where they are, docked and stacked, or at sea in the hold of a ship. They’re also passing up data, such as reefer performance and the condition of the cargo they’re carrying. That all gets linked up, and communicated by satellite back to the owners of the container. It’s all very smart stuff, advising on anything that may need attention while at sea or on arrival at the ports, which is just as vital,” he says.
Embrace generative AI
Improving data sharing and integration is the key to more coordinated planning and scheduling to unlock supply chain efficiencies. Kevin Green gives the most often quoted example. “Felixstowe is our biggest port in the UK,” he says. “They have a quite complex booking system for when an ultra large container vessel arrives. Felixstowe has to match up its alerts to the road transport providers and the rail operators, with their stacking protocols. They have to avoid placing tomorrow’s load at the bottom of a stack. It is challenging to match up stacking with the expected arrival of onward transport. Ports are now more adept at using computer-based modelling to direct their stacking for efficient retrievals. That may sound quite obvious, but it’s really complex in a busy port environment.”
Complexity is the daily diet for Nigel Rouch, Senior Vice President Technology – Europe, for XPO Logistics. With around 14,000 employees, and around 20,000 trucks and trailers constantly on the move, Nigel is convinced that innovation in the industry is a necessity. “It is absolutely crucial,” he says. “Logistics is a very low-margin industry, and we need to drive the value up in the industry by investing in innovation. Our customers demand it because, more and more, they are driven towards the need for visibility. They need to know what’s happening in their supply chain, across the world, from the delivery pick up in the warehouse in China through the ocean into the warehouse and on to the last mile.”
Embracing change
Nigel Rouch says that innovation in itself doesn’t just give his business an edge. It also improves the working environment, and makes the sector into a more appealing career. “Automation drives a safer environment and a more productive one,” he argues. “The reality is a lot of our employees are much more digital than they ever were before. When I started work, the only people who had computers were sitting at desks. Now we’re finding our drivers and warehouse people have more technology in their cabs or their hands than we have in the average office.”
Putting that technology to more innovative use is something Nigel encourages the sector to do. “Understand how to make the most of the advantages that [technology] affords to them,” he says. “It’s about investing in the user experience. We invest effort in explaining technology to our own colleagues and customers, so that concepts like generative AI are not scary. They are concepts that we can all embrace and make our industry more productive, and give our customers a better experience. Technology is not a threat. It makes our jobs safer – and more secure – and gives our customers a better reason to conduct business with us.”
Threat as an opportunity
“Being able to understand where a product is in the supply chain in 2024 is a basic necessity for me,” says Katherine Skidmore, the Supply Chain Engineering & Innovation Director for Unipart, a British company with its origins in car parts. Today, Unipart provides supply chain and performance improvement technologies services in several sectors. Its logistics concern is a global player, operating throughout worldwide industry. “Visibility of the supply chain is the biggest opportunity for the logistics industry, says Skidmore. “This can be anything from a child eager to know when their new toy will arrive, to clinicians and patients managing their health while tracking the progress of medical supplies.”
Putting it all out there, in data terms, has given rise to some concerns about the security of shipments, when the discrete interior of a container may be exposed to prying digital eyes.
“It would be interesting to know what’s inside lots of containers,” says Kevin Green from Logistics UK. “However, as we’ve heard at our conference on digital transition within the industry, there are security risks, but all companies operating in the connected world are aware that with cloud-based data flowing around the world, you seal the borders of your network and have the right security and training in place. I don’t think you could operate as a disconnected company in a connected world, so it’s a risk we have to live with.”
However, Kevin Green says that the cost of digitally securing a container is unlikely to be an issue. “The costs make sense, especially when you are condition monitoring goods within containers. There’s a need for communication. You want to be able to track valuable goods as they cross the ocean,” he points out.
Security can mean more than stout locks on the digital doors. It can also be about anticipating risks, and avoiding them. Tom Coker specialises in the field, in designing predictive AI systems for vehicles. His company, Intangles, is all about identifying problems before they manifest as a warning light. He says there is no question about the value of deep monitoring. “There is so much data within the logistics sector that it can be used to increase efficiency, to increase transparency, for the customer and also for the fleet operator.
“People always talk about risk, but that is both threat and opportunity. One could hide behind one’s walls and be considered totally safe, but of course, that would not be a particularly good entrepreneurial business. There are always vulnerabilities in any system, but provided the policies, the right procedures, and most importantly, the right training is put in place, then you’ll be as protected as you can be.”
Digitally native industry
“There isn’t just one particular technology which will disrupt the logistics business,” says Katherine Skidmore from Unipart. “It will be the orchestration of many strands of technological innovation and the meaningful harnessing of the data available to us. That will drive the best benefits across the whole supply chain. We are entering new realms of possibilities with technology, including Gen AI, but what I want to talk about is robotics and automation. In the warehouse [and on the quayside], goods-to-person solutions and automating the ‘picking process’, which otherwise involves colleagues walking miles, makes efficient sense. Nevertheless, there is still so much more we can do. In the global economy at large, it is still one robot to every one thousand people.”
Agreeing with Helene Dearn’s earlier observations, a more tech savvy workforce is the answer, says Nigel Rouch at XPO. “The average age of our drivers is in their fifties, and they’re not going to be here forever. The need for and use of transport logistics is, however, going to keep growing,” he says. “We need to change the demographic of our drivers – getting new recruits in – which, in turn, means a generation that’s digitally native will be behind the wheels of our business. We need our education system to reflect the needs of industry – which is far more technologically advanced than public perception gives us credit for. Picker and packer jobs are going. We need young people educated in the skills that match the modern requirements of the industry.”
Katherine Skidmore notes that the logistics sector is being proactive. “All the progressive players in the logistics industry and all the third-party logistics operators have innovation centres,” she explains. “Unipart has one in Oxford, otherwise known as the Advanced Supply Chain Institute. That’s the opportunity to build a platform where technology partners, academia and industry can come together and debate the complexities and the opportunities – and what are the solutions that keep our industry at the forefront and competitive.”
In the world of logistics, people make the industry move, but there is one other commodity that is indispensable. “Logistics doesn’t work without data,” says Nigel Rouch from XPO. “We speak now about large language models, but we used to speak about big data. That hasn’t gone away. Without the organisation of data, we don’t work very efficiently at all. None of our businesses start from scratch. We have a fifty-year legacy of systems that don’t lend themselves to integration very efficiently. That transition is key, and how we manage data is absolutely key to being able to exploit innovation in the future. It’s not very sexy, but it is key.”
“Outwardly, the logistics industry seems unreconstructed,” concludes Tom Coker from Intangles AI. The public perception might still be simply a matter of planes, trains and trucks, and ships, covering land, sea and air as fast as possible, but Tom Coker peers inside the big box logistics parks and sees a somewhat more hi-tech approach.“Change is afoot,” he says. “The world over, those who are best placed to take advantage [of the technology available to them] are those who will reap the biggest rewards.”
*This story first appeared in the November print issue of WorldCargo News