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1 ANSWERS FOR AN THE ACCELERATING WORLD 2020 Logistics Trends: Opportunity or Threat? Seminar 16th October Transport & Logistics Antwerp W AREHOUSES WITH BRAINS

2 On 16th October, WDP organised a seminar as part of the Transport & Logistics show in Antwerp. The subject was the trends of today that constitute opportunities (or threats?) for the future of the total logistics chain.

3 We cannot predict the future, because we don t know what will happen, states Nik Baerten, Future Explorer and co-founder of Pantopicon. But what we can do is look at today s developments, pick up on social signals and try to anticipate the effects that these shifts and changes will mean for the logistics sector. Using the question what if one day..., I invite you all to think about the consequences that current trends may have. Nik Baerten, Future Explorer Pantopicon and sell products themselves. Using a Square 1 card-reader connected to a smartphone, ordinary individuals are already able to sell goods and services quickly and cheaply. What if one day every consumer became a producer? Technology is becoming increasingly within the reach of consumers. It means that they can already do things at home that not long ago would have required a whole raft of machines and an expensive connection to do like payment terminals. Consumers can create The increasing growth of Fab Labs 2 brings us on to the next question: what if the majority of people also became producers? Logistics flows would undoubtedly take a completely different turn. Neighbours would be able to do the logistics for each other. The need for smaller warehouses would increase. The location of those warehouses could also then bring about a shift from out of town back to the city centre.

4 What if one day things could tell their own life story? Today, sensors are used for a whole range of purposes, such as looking under the skin of an apple to see what can t be seen with the naked eye: the apple has been damaged during transport and is going rotten here and there What if one day things could tell their own life creasingly critical consumer would be able to trace the entire life of the product being bought. In this scenario, for example, the product would itself be able to tell you about the conditions it was grown in, how many stops it made on the way to being delivered to the shopper, whether it suffered any water damage, how it can be recycled. In an age when sustainability and ecologically responsible choices are important for consumers, this type of ultra-transparency brings with it a great many challenges not only for the producer, but also for the logistics sector. What if one day most of us came to see our possessions as a weight around our neck? The number of people who ask themselves why they might buy and own things, whereas they only use them occasionally, is increasing. Possessions start to become a weight around our neck, partly because of increasing urbanisation, meaning that people simply don t have There s a shift from owning things to accessing them. story? The science-fiction writer, Bruce Sterling, started using the word spime 3 back in 2004 to describe this concept. Then, imagine that this technology also came into the hands of the general public. The in- the space to store this stuff. Parking in town is getting harder, apartment buildings offer smaller living areas with even less storage space. We re already seeing services, tools and even cars being shared or lent out more and more: you can now hire a bike or car instead of own-

5 Alain Coninx, former VRT journalist and moderator of the discussion panel

6 ing one yourself. There s a shift from owning things to accessing them. It s the same for software and music. You no longer need to own them. You can use cloud applications to access thousands of music and film libraries. And you can share duction, storage and transport, but also about repair and redistribution. We are at the beginning of a revolution in the production sector. These days, youngsters can have their own gadgets produced using 3D printing. In the healthcare sector, we have software instead of having to buy the whole package; better still, you get all the upgrades, too. These developments mean We are at the beginning of a revolution in the production sector. been suffering from a shortage of donors for years. By using 3D technology, it could become possible to print parts of organs from stem cells. Technology is creating a shift from evolution to revolution. a U-turn for the production sector: the designed for obsolescence concept 4 is fading away and making room for products that last longer. New logistics flows are being designed because logistics is no longer just about pro- This is having a major impact on the logistics flows that would otherwise have to be organised. If one of these days we only had to stock up on raw materials and made the products we need ourselves, either at home or in a small-scale factory located in town, logistics processes would have to be thought about differently, too. What if one day sketches could be turned into buildings at the press of a button? What if sketches of buildings at some stage could also be turned into physical structures just like that? If you could manipulate an image with one hand and use cutting-edge technology to feed the file into a machine that would simply build all the parts? And what if the assembly work could be done by drones?

7 Imagine if new methods of transport started appearing, such as the use of drones? Drones are already used in other countries, for example to take defibrillators to patients if there is an incident in a remote area where ((click to view the film or go to JnkMyfQ5YfY) All of these developments would have a huge impact on the way we consume and hence also on logistics. Transport would become faster and more efficient. We would use fewer materials. Production and storage could even come back into town albeit on a smaller scale and these sectors could What is currently more an exception than a rule could become more a rule than an exception in the future also play a different, more positive role for the environment where they establish themselves. no immediate help can be provided. In China, courier services in skyscrapers are already handled using drones. Or you could go even further. Swiss students have come up with a concept for having people, products and goods come to a single local station and be carried together, all under one wing. What if one day bad choices could be scrapped? What if unsustainable choices were no longer allowed, because there was a more sustainable alternative? Imagine if you could no longer fly for a distance of under 1000 km. The government is considering stepping its sustainability policy up a gear and giving a helping What if one day new modes of transport appeared on the scene? hand to greener alternatives. Electric boats, the revival of transporting goods by ship, ban- Old transport systems are currently being rediscovered. There are the studies into using airships at the port of Antwerp, or the waste cartage system in Sweden that uses compressed air to carry waste underground through pipelines.

8 ning ordinary cars from city centres and hiring out electric vehicles, etc. These are just some Or if production flows were geared to one another to create new value chains? of the initiatives currently being studied by the government. Companies will also get together physically to form ecological systems or integrate their business fully into the environment. Google s datacentre is in Finland because the climate provides the necessary cooling for the equipment. A company in Japan supplies its catering needs by growing fruit and vegetables in a high-tech way in its own basement. What is currently more an exception than a rule could become more a rule than an exception in the future. The reason for this aboutturn is not so much about window-dressing or brand image, but it s an idea underpinned by the economic gains that such a decision would bring with it. What if one day value chains were ultra-local? In Sweden there s a tower block that handles the entire production process from sowing, through to harvesting and distribution. In this case, the value chain is ultra-local and creates its own ecosystem. Imagine if only eco-positive listed companies were eligible for settling in a particular area?

9 THE FUTURE: A NONE-OF-MY- BUSINESS STORY? Are these predictions a none-of-my-business story or more like science-fiction? Only the future will tell. What is already a reality today is the increase in purchases made via the web. In the Netherlands, 10% of the retail sector is online; the value is estimated at 11 billion. So says Andries van Daalen, Programme Director at Wehkamp.nl. In Belgium, the figures are a good deal lower, at 3%. So there is a huge more in the foreground, because the sector stands or falls by what happens logistically. At WDP, we re working on multipurpose buildings that can be adjusted to the automation needs of e-commerce. In e-commerce, logistics are vitally important, continues Andries Van Daalen. On the web, it s difficult to stand out from your rivals in terms of the product offered, or the price. But you can through the service linked to the product being bought. How quickly can the product be delivered? How reliable is the payment system? How good is the after-sales difference in consumer behaviour over a distance of not much more than 60 km. Forecasts e-commerce has a lot more to do with logistics than with retail. service? So it is important to invest in this service to created added value. say that by 2025, 50% of purchases will be online. So there are lots of opportunities open for e-commerce. Joost Uwents, CEO WDP: This is definitely good news, including for the logistics sector, because e-commerce is much more involved with logistics than with retail. There are genuine growth opportunities and the reason why the figures in Belgium are lower than in the Netherlands has something to do with our mentality: the Belgians are much more conservative and perhaps also somewhat more mistrustful about the new systems. They re happy to buy film and concert tickets without a problem via the net, but retail is another story. With e-commerce, the supply chain is much

10 Andries van Daalen, Programme Director, Wehkamp.nl

11 THE LAST MILE Alex Van Breedam, teacher and CEO of TRI-VISOR: When making purchases online, you often see free delivery being offered. If there is one thing that is absolutely not free, it s the cost of transport. In fact, transport is very expensive, not to mention the pollution to classify transport and service: do you want the product tomorrow? If you do, it will cost you more than if you can wait a little longer. Consumers today are not sufficiently aware of the cost and effects that transport and e-commerce have. That s right, says Mario Fleurinck, CEO at Melotte. We re switching from an analogue economy to a digital one where we create new transport flows that are different to the old ones from the past. We have created a new type of economy that runs via the Internet and where ordering in zeros and ones is qualified in a totally different way than ordering physical products. But we don t always realise what impact it will have. Should we talk about harmful side-effects when using e-commerce? Sustainability has been lumped in with global warming, so that no one actually realises what impact his or her individual part is in it all, continues Mario Fleurinck. Which is why transport has to be peer-to-peer 5, so that the impact is kept as low as possible. Look at the people who are here today. They ve been caught in the traffic for two it causes. Which is why the last mile is a complex and expensive matter. In actual fact, you need Als er iets is dat absoluut niet gratis zou mogen zijn, dan is het transport wel. hours and at the next election, they ll be asked whether they agree with investing in analogue transport projects, such as widening the Antwerp ring road. If you put this question to someone under 35, the answer is no because the younger generation is much more flexible. They live in Antwerp, study in Leuven and work in Eindhoven; so it s not surprising that they don t want to pay for an infrastructure that they won t use. How does government react to this trend? Ilse Hoet, Department Head for Mobility and Infrastructure: Infrastructure is still important and having the right infrastructure is a basic requirement. However, we are looking more and more closely at what this infrastructure means in terms of capitalising as much as possible on these flows and playing a directional role. We will also be making a big effort to involve inland waterways and the railways in the flow of goods to help us achieve this shift. But the information flow that goes with the goods flow is also important. So, should warehouses be in strategic locations? Yes, they should, claims Alex Van

12 Professor Alex Van Breedam, teacher and CEO of TRI-VISOR

13 Breedam. E-commerce gives buyers the impression that the warehouse is just round the corner, whereas often it involves a foreign distribution centre and overnight transport to be able to deliver on time. There are even analysts who say that the traffic congestion that Flanders delivered by drone transport within 6 months. This method of transport is still a leisure time thing and the government doesn t have a policy on it yet. In terms of infrastructure, a radar unit needs to be installed every 15 km with our clients so that the drones can we have experienced on a Monday for the past few months whereas it only used to be on a Tuesday and Thursday is a direct effect of consumers changing purchasing habits as they do all their e-commerce at We aim to have our dental prostheses in Flanders delivered by drone transport within 6 months. talk to one another and we can deliver within a radius of 150 the weekend. Joost Uwents: Which is why going multimodal is definitely important for combining all of the various modes of transport. Soon we won t be looking at the number of square metres your warehouse needs, but how we can get all of the logistics flows to dovetail with one another. Where do the products come from? Are there flows from Asia and e-commerce flows,...? The government is working on developing these changes. For example, it just invested 200 million in the project to turn the port of Ghent into a fantastic multimodal logistics hotspot. So we should be seeing a The traffic congestion on a Monday is directly related to purchasing behaviour using e-commerce at the weekend. return on these investments by now. Mario Fleurinck: As an alternative goods flow, we aim to have our dental prostheses in km. To achieve this, we re talking about an investment of 3.5 million. These devices are very good in terms of the impact they have on the environment: 60 drones consume less than 2 smelting furnaces; the noise impact is just 16 db, and given that they fly at a height of 21 metres, that noise will be very limited. But the likelihood of a Flemish policy on this type of transport being approved within 6 months is extremely limited, but I live in hope. They once said to me that I would never be able to produce prostheses using 3D printing. Now we re making 40,000 a year. But what would happen tomorrow if 1,000 people also wanted to use drones? The drones are in contact with one another and even at a speed of 250 km/h, they could never collide. This is a mature technology and is being integrated today so that within 5 years it will be in effective use. I also think that this will be something for a small niche market. Last week, Obama released 50 billion to make

14 Mario Fleurinck, CEO Melotte

15 drone applications usable in the private market as well, continues Mario Fleurinck. Urban distribution as it is today makes no sense, believes Alex Van Breedam. Even if around 5 traders get together, the cost of Andries van Daalen: If e-commerce in Belgium rises to 10%, there will be many more transport is still high. But when you get lots of retailers together, then that cost will be much delivery vans on the road. The government lower. And you could give city distribution centres other functions, too, such as returning needs to focus on this now, because people won t tolerate it for long. packaging materials or providing automatic When you look at the level of urbanisation e-commerce will attract greater flow into town centres and if you want to keep the cities liveable, you ll also have to start organising city distribution centres. ahead because people are going to be living more and more in cities this risk certainly needs to be anticipated, says Alex Van Breedam. Happenstance dictates that city people will use e-commerce more. So they will attract greater flow into town centres and if you want to keep the cities liveable, you ll also have to start organising city distribution centres. The government will have to orchestrate some sort of system to stop people being able to drive into the city whenever they want. Otherwise towns and cities will soon become unliveable. One solution might be to develop urban distribution flows at the entrance to built-up areas. In this scenario, older, smaller warehouses on the edge of town could be given a new lease of life, continues Joost Uwents. restocking of shelves so that you no longer need reserves. That would make it possible to stock up your store in a more controlled way. Ilse Hoet: In government, we are involved in various initiatives on this issue. Right now we re busy gathering information about it, because the numbers tell the tale. I believe that for some people the problem is not yet big enough for them to focus on it properly. However, there are some municipal projects running in conjunction with the government. There are projects for regulating delivery times or for taking deliveries away from the rush hour. For example, the drones concept also fits in perfectly with ViA 6. Work needs to be done on a consolidated logistics flow We have a similar problem in the Netherlands, says Andries Van Daalen. We are working with the various courier services to establish picking-points. These are developments in the shorter term than 3D printing and the drones concept. Look at the new food flows in Japan since

16 Joost Uwents, CEO WDP the disaster at Fukushima: crops are being grown on roofs (rooftop farming) by using hydroponics 7. This development not only has an effect on the flow of goods in cities, but when you think that 50% of children are born with food allergies and that intestinal cancer is on the increase caused by our way of eating and growing crops then this new way of farming certainly has a future. Better still, our smartphone will soon be able to tell us when we really need to eat based on our activity which will have a positive effect on sustainability, overproduction and logistics flows, says Mario Fleurinck. Joost Uwents adds: All of these things demonstrate that logistics as a whole is gaining in importance. Sustainability in our warehouses is not just about using solar panels and optimising vacancy rates it s also about insulating the building, the heating or cooling and the choice of lighting, such as the use of LEDs. In the Netherlands, for example, we have installed heat pumps to bring the warmth from the ground into the building. But sustainability is an item we need to be constantly involved in. Alex Van Breedam: There is still plenty of room for improvement. When you consider that 1 in 4 trucks drives around empty because we have excess capacity, then work really needs to be done on consolidating flows. That s right it is a major challenge to tackle more efficient ways of transport, adds Ilse Hoet. The government wants to send logistics specialists out to small companies to conduct quickscans on their logistics flows. Then we can analyse the results of opportunities for improving logistics flows and the overall ecological footprint.

17 3D PRINTING: A SOLUTION FOR EVERY COMPLAINT? printing: not just new employment opportunities, but 3D will also an enormous impact on increasing the comfort of our elderly citizens. In optimising the logistics flow, 3D printing will soon also be able to play an important role. 3D printing is an ecosystem you go to out of necessity, explains Mario Fleurinck. You only have to get together and assemble what you need. If you can manufacture a machine part weighing 160 grams instead of 2 kg, you will only look at the operational function of the product. This means that parts no longer need to come from China because they can be produced locally, which will also totally change the supply chain. So will that mean a whole different way of warehousing? Joost Uwents: Certainly, but we view it as a challenge and not as a threat. But it will mean major changes in the In the short term, 3D printing will certainly be a solution for producing spare parts. We have a demographic deficit in which we have to ask ourselves how we will be able to provide for the future greying of the population in terms of their care. For example, we could develop exoskeletons 8 that would enable them to keep mobile in a comfortable way until the end of their lives. Another example is dental prostheses. We can already deliver these within 24 hours. Using the conventional method, patients have to wait 6 to 8 weeks for a set of teeth. Which naturally makes quite a difference in terms of comfort. 3D technology also has a major impact on rehabilitation after an area of stock handling. But not everything can be made using 3D printing. Such as a designer table with leather upholstery. So will we have to adjust to the capabilities of this technology? Will we still be able to choose what we think is beautiful? Yes and no; there will certainly have to be a change in mindset. Mario Fleurinck: When you look at the automotive sector, cars 60 years ago were made from steel, wood and leather. Today, just 5% of a car is made from steel. The rest is all composite. So we will have to make choices. accident. The difference in rehab for people who have been in a coma for 24 hours or for 6 days is a good 6 months. So we need to use technology to the full and not see it as a threat. The growth of Melotte has not meant a single job being lost. People are conservative by nature and are afraid of change. When you look back at our history, people have always been mistrustful where new technologies have been involved, whereas the reasons have not always been justified. But is there a real likelihood that soon we will only be using 3D printing products? There are lots of advantages to using 3D Over the next 5 years, we will be offering 2 to 3% of the products in Belgium using this tech-

18 Ilse Hoet, Department Head Mobility and Infrastructure Water and Port Policy Department nology. So there is still time to redesign ecosystems and employment. Alex van Breedam: In the short term, 3D printing will certainly offer a solution for producing spare parts. This will have a direct major impact of the issues of costs, sustainability ment of these new technologies will undoubtedly have an impact on logistics and will create fantastic opportunities. New ecosystems possibilities for us to work together will also see the light of day. But first we need to focus on the growth of e-commerce in Belgium before these views of the future can become reality. and transport that logistics has to struggle with. In short, it will already take much of the pressure of the logistics system. Soon we will have our cartridges of raw materials delivered to home and will be able to print them out ourselves. This should also reduce pressure in the production sector. As a final conclusion, our panel members all agreed that there is a definite case for supporting innovative technology. The develop- Text & Layout: Sandrine Roux Photography: Rudi Van Beek Film: Steven Stockbroekx With thanks to: Alain Coninx, Andries van Daalen, Mario Fleurinck, Ilse Hoet and Alex Van Breedam All rights reserved. No part of this publication may be duplicated and/or made public in any form or in any way, be it electronic, mechanical, by photocopying, recording or in any other way, without the prior written consent of the publisher.

19 END NOTES 1 Square Square is a card-reader that can be connected to a smartphone. Provided you are a member of the system and download the corresponding application, you can pay by credit card and be paid through M-commerce (make purchases via mobile devices). More information: https//squareup.com. 2 Fab Labs A fab lab (abbreviation of fabrication laboratory ), is a cooperative workplace where inventors and developers can use a collective infrastructure that includes computers, 3D printers, laser cutters and milling machines. To be able to call itself a fab lab, this workplace must meet the terms of the Fab Lab Charter. At the larger fab labs, such as the ones in Amsterdam, Utrecht, Tilburg and Maastricht, training is also provided in the form of courses and workshops linked to the digital workplace. As a result, total concepts are able to slowly emerge from fab labs, including the entire process of learning, producing, disseminating and presenting. (source: Wikipedia) More information: 3 Spime Spime is a neologism for an object that can be traced through time and space during its lifetime. The concept was thought up by the writer, Bruce Sterling. Sterling sees spimes as the result of the convergence of six up-and-coming technologies that relate to the production process for consumer goods and which use identification and location data technology: identification via radiofrequency, GPS location, Internet search engines, computer-aided design, 3D printing, cradle-to-cradle lifetime of objects. (source: Wikipedia) 4 Obsolescence Obsolescence or planned ageing is the concept whereby a product is designed as such and manufactured in such as way that its lifetime is limited. Hence the product is programmed to fail. This planned obsolescence has potential benefits for a manufacturer because the consumer comes to the same manufacturers for replacement parts or even to buy an entirely new device. Competitors can also take advantage of this planned obsolescence to get their own products into the market. 5 Peer-to-peer (P2P) A peer-to-peer network is a decentralised, distributed network in which nodes (called peers ) act as both supplier and consumer. 6 ViA (Vlaanderen in Actie) Vlaanderen in Actie (ViA) is the project for the future for Flanders. By 2020, Flanders aims to excel as an economically innovative, sustainable and socially warm society. More information: 7 Hydroponics Hydroponics is a method based on hydroculture for growing plants using mineral nutrients, dissolved in water and by using an inert medium for soil, such as perlite, gravel, mineral wool, clay pebbles or coconut shavings. 8 Exoskeletons An exoskeleton is a hard external structure that serves to protect the body of an organism. People have long used harnesses as artificial exoskeletons for protection, especially during fighting. Exoskeleton machines are gradually also being used for medical and industrial purposes. Ortheses are a limited medical form of an exoskeleton that is applied to a limb or the trunk to support the working or shape of the limb or backbone. (source: Wikipedia)

20 Pictures WAREHOUSES WITH BRAINS

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