PIONEER project: Physical Internet for e-commerce retail

The Physical Internet (PI) is a future vision for fully open and connected logistics networks, in which physical, digital, operational and financial interconnectivity are central. Research has shown that PI offers opportunities for more efficient, bundled and shared, and sustainable logistics, also in urban areas.

University of Groningen (NL) is starting the PIONEER project: Physical Internet, an Outlook on Neighborhood and Environment for E-commerce Retail. The project is subsidized by TKI Dinalog (2019-2022). Consortium Partners are University of Groningen, Districon, ViaTim, Cycloon/, Wehkamp, DHL, Centric, IMCC, Dropper en ZUPR.

In the current development phase of e-commerce, the step towards introducing PI-based concepts is much smaller than in other markets where the logistics organization format has already crystallized out. Moreover, due to the growth of the market, even small logistical changes can have a major impact in the longer term. Because e-commerce mainly relates to the transport of packages, bundling of goods flows – on which many of the benefits of PI are based – is particularly relevant.

A core aspect of the PI is the multi-layered network structure, with different types of hubs where goods can be stored and transhipped. Micro hubs, small-scale logistics operations at fixed locations with a small geographical coverage (city center, residential area or street) play an important role in this. Micro hubs are not only a theoretical concept for PI, but are also increasingly used in today’s logistics market.

PIONEER project

The PIONEER project focuses on the development of PI-based concepts around micro-hubs for e-commerce, whereby a balance is sought between service orientation, efficiency, sustainability and quality of life.

Work package 1: Local resident serving as parcel delivery person

The smallest type of micro hub is the street hub. This is a distribution point for parcels that can be located in a residential home. ViaTim is a start-up that is setting up such street hubs. Parcels from web stores such as are delivered there by DHL. The street hub forms an extra link in the current logistics structure. But the street hub also saves on stops and kilometers of delivery vans. This work package examines the logistical value of street hubs and the impact on sustainability and quality of life. In addition, concepts are being developed for the integration of street hubs in PI-based logistics networks.

Work package 2: Multichannel logistics

The logistics of stores and web stores are now often still separated. Integration offers possibilities, for example for delivery of online orders from stores, or faster delivery from stores. This integration actually turns stores into micro hubs within the meaning of the Physical Internet. Districon, Centric, IMCC, and ZUPR are each working from a different specialty to bring logistics closer to each other for online and offline product sales. The focus is on chain management, transport, inventory management, and warehouse management. Furthermore, possibilities for predictive logistics are being explored.

Work package 3: Logistical network integration of cargobike couriers

More and more cargobike couriers are appearing in cities. These cargobike couriers work from a city hub from where they take over the last segment of delivery in an environmentally-friendly manner. With Cycloon/ and Dropper, this work package explores the possibilities for bicycle couriers in PI-based networks and experiments with various forms of organization and control of cargobike transport between micro hubs. In addition, algorithms for resource pooling and dynamic deployment for integration of these local services are being developed.

The research brings supply and demand closer together, optimizing warehouse operations, return logistics as a central business, reducing bottleneck last-mile delivery, effective multichannel sales strategies and bundling of orders. Furthermore, this project contributes by developing new supply chain management applications and an expected reduction in mileage and CO2 emissions through the use of micro hubs and cargobike couriers.

Working with start-ups

The chosen design of the project offers participating companies, including three start-ups, the possibility of directly implementing the knowledge that is being developed in this project on the basis of practical analyses, cases, theory development and pilots. Results will be shared outside the consortium through external communication, discussion and working groups. The knowledge developed about cooperation between start-ups and established parties can further the supply chain management concepts. Social effects are that new jobs are created, which also offer opportunities for people who are at a distance from the labor market.

Source: University of Groningen

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