Delivering to the Cities of TomorrowGlobal Mega Trends and Impact on Future of Urban Logistics

Today’s Presenters

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Archana AmarnathProgram ManagerVisionary Innovation ResearchFrost & Sullivan

Archana VidyasekarSenior Research AnalystVisionary Innovation ResearchFrost & Sullivan

Agenda

Presentation of Top Mega Trends of the Future Influencing Urban LogisticsUrban Logistics : New Trends and Business ModelsMore About Visionary Innovation Group

Introduction and Definition of Urban Logistics

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Objectives of the Briefing

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• Defining and understanding the concept of urban logistics and the dynamics within the industry

• Understand impact of Mega Trends in driving new business models, new technologies and urban freight transport practices

• Gain insight into the use of information and communication in fleet management and robotics in warehousing

• Spot new business models and intelligent optimised solutions being deployed for urban logistics

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What is Urban Logistics?

Transportation & Distribution ActivitiesWarehousing Activities Value-Added Activities

Urban Logistics offers unique tailor-made solutions for the transport of goods in cities by consolidating & rationalizing the existing logistics platforms & creating innovative solutions for the future through the use of information and communication technologies

In-Bound TransportationOutbound Transportation

Storage

Inventory Management

Planning / MarketingOther Optimisation Techniques

Key Segments Within Urban Logistics

Global Mega Trends and Urban Logistics

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Mega Trends Driving Urban Logistics IndustryUrbanisation Connectivity and Convergence Bricks & Clicks Future Infrastructure Development1 2 3 4

There Will be 35 Mega Cities Globally By 2025 Demanding For Unique City Logistics Solutions

By 2025, each person will have a minimum of five connected devicesBy 2025, 20% of retail will happen through online channels

By 2025, globally over $800 billion will be spent on high speed rail projects.What does this mean for Urban Logistics?500 million deliveries per day to cities

‘On-the-fly’ deliveries will have to made anywhere, anyhow, faster and quickerDemand for urban parcel deliveries will increase – shipments to become smaller and frequent

An fuel and carbon efficient alternative to road and air transport and multi-modality.

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Mega Trend 1 : UrbanisationUrbanisation Will Compel Logistics Companies To Have More Spokes Near the CitiesThe Hubs:

Central Distribution Centres

Heavy Commercial Vehicles (double trailer trucks) will carry goods to big warehouses at outskirts

Spokes: Drop off-points for deliveries

near remote city areas

Medium and Light CVs will deliver goods to warehouses within

city

Outer Ring Road25 miles from City Centre

80% - 100% load factorIn-night services, Early-morning deliveriesReduce the number of trips by almost half100% on-time deliveries

Without Consolidation Centres

With Consolidation Centres

Distribution will be Shared and become more Consolidated

Consolidation centre

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Mega Trend 2 : Connectivity and Convergence

Reactive ProactiveTelematics

Intelligent Transport Systems

Social Media Integration

2010

Sensors and Terrain MappingTraffic Predicting Software

Real-time is Too Late…

201520202025 Cloud Logistics

‘On-the-Fly’ DeliveriesIndividually optimized transport solutionQuality Control ‘On the Move’Urban Lead Logistics

Urban logistics opportunities

Logistics Technology to Become More Proactive than Reactive

Global Online Retail Sales To Reach $4.3 Trillion By 2025 Accounting for 19% of Total Retail“More the ‘Clicks’ More the Truck Mileage”

$11.8 Trillion

$23 Trillion

$18.7Trillion$11.25 Trillion

$4.3Trillion$0.55 Trillion United States China United Kingdom Japan Germany

24% 18% 25% 10% 15%

1 2 3 4 5

$1.32Trillion $1.30 Trillion $0.19Trillion $0.17 Trillion $0.09 Trillion

% share of online in total retail, 2025Online Sales Non-Online Sales

5%

95%

19%

81%

Mega Trend 3 : Bricks and Clicks

112011 2025

The Retail Model Will Evolve From a Single/Multiple Channel Model to an Integrated Cross Channel Model Demanding For Multiple Delivery Options

Source: Frost & Sullivan Analysis

Department Stores

Supermarkets Hypermarkets Online Mobile PaymentsMobile Apps

Bricks (pre-2000) +Advent of Clicks (post-2000)

Interactive StoresVirtual Stores Hyper Online Markets

The Future - Bricks and Clicks (2015 and Beyond)

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Same-Day Night Time Click ‘n’ Collect Locker Boxes

Inventory VisibilityCold Supply Chain Services

Multiple Delivery Options

Refrigerated Locker Boxes

Smaller ShipmentsUrban Logistics Solutions

Ecommerce pressures on the supply chainRetail Logistics Will Innovate Its Last Mile Offering Multiple Delivery Options From Home Delivery to Self-Collect

Frequent Deliveries

In Future, HS Rail will not only offer high speed personal mobility but will also transport cargo at a lesser fuel and carbon cost

What are the Opportunities?•Higher Speed Logistics•Intermodal Logistics•Next-day delivery between continents•More fuel-efficient than Air-Road Mix•Night-time multimodal logistics (e.g. no night time flight restrictions)

Project Examples:•Eurocarex – High Speed Freight Train Between Lyon and London•Bangalore-Chennai High Speed Freight Train•China’s Mixed Passenger-Freight High Speed Trains

Mega Trend 4 : Higher Speed Logistics

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Urban Logistics Trends

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$2.55 trillion $5.98 Trillion

50% 55%Transportation & DistributionWarehousingValue-Added

2011 20202.5xUrban Logistics Spending

How will demand for urban logistics affect the spending on logistics in urban environments ?

32%18%

23%22%

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How will urban freight transportation change?Road to remain the dominant mode of urban freight transport. Logistics Related Transport Will Account For Over 35% Of City Traffic B2C trips will Come to rival the current dominant segment, B2B by 2020 underpinned by growth in ecommerceAverage length of haul will decrease as warehouses and delivery spokes move further into cities100% Loading Factor of Trucks – Full OptimisationSmaller and more fuel-efficient vehicles will be used within cities which are seamlessly integrated with multi-modal functionalities (roll on-roll off)

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Future of Road Transport: Truck Concept 2020

Engine & Fuel

Design

Driver Support

Connectivity • Lighter weight vehicles (Plastic Shell)• Low loading floor constructions• Roll on-roll off systems

• Tire Pressure Monitoring System,• Driver Distraction Warning, Adaptive cruise control

• Vehicle to grid Communication Navigation• Green routing, terrain mapping • On-Board Traffic analysing tools, • Geo-fencing, and Smart sensors

• Electric• Hybrids/Fuel cell Fleets

• CNG• HCCI

The Concept of future delivery vans will revolve around technology, carbon footprint, fuel efficiency and Aerodynamics

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Future Generation of WarehousesRobotic, Automated and Intelligent Warehouse Picking

Picking Robots (Kiva) Augmented Reality Picking ‘Autostore’

Robotic Unmanned Forklifts

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Urban Transhipment AreasUrban Consolidation Centres Urban Intermodal Hubs

Locker BoxesMicrodistribution

Future of Consolidation and Last Mile DeliveryMore Bundling and Innovative Last Mile Deliveries in Urban AreasTypes of Urban Distribution

Types of Urban Last-mile Deliveries

Mobile CollectionNational Postal Service

Urban Logistics Policies and Measures

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How are Cities managing Urban Logistics?Through vehicle access restriction, economic instruments, and special infrastructure, city governments and municipalities are planning for an urban future

Access Restriction Economic InstrumentsSpecial Infrastructure

Low Emission ZonesTime WindowsVehicle Weight Restrictions

Congestion ChargingIncentives & Subsidies

Freight LanesUrban Consolidation CentreLoading / Unloading Areas

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City of Paris Parking Bays

Barcelona Night Time Window Italy’s Urban Consolidation Centres

Examples of Cities experimenting with Urban Freight MeasuresSwitzerland Subsidy for Intermodal Transport

Urban Business Models From LSPs

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Emerging and Future Urban Logistics Business Models

Transportation Value-added services2008

Distribution

2010

2012

2015

2020

Off-Peak Deliveries

Multimodal Deliveries

Hybrid / Electric Fleet / Shared Fleet

Autonomous Fleet (Self-Monitoring Vehicles)

Consolidation Centres

Locker Boxes

Pick-Up Vans / Self- Collection Points

Lifestyle Carriers

Proprietary EDI

Telematics / Real Time Solution

Logistics Planning and Forecasting

Cloud Logistics

Future

Past

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Examples of Logistics Service Providers Experimenting with Urban Logistics Models

DHL Consolidation Centre TNT Express Tricycles

TNT Express Bento BoxFedex Smart Ecommerce Solutions

UPS-Kiala

Geodis Distropolis

Top Urban Logistics Industries

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Top Industries Using Urban Logistics Services in the Future

Retail Pharmaceutical Food & BeveragesSmaller Stores Generic Medicines Chilled and Frozen FoodIndustry Trend

Urban Logistics ImplicationSmaller shelf size – need for constant replenishment

No more homogenous single supply chain modelNeed for Cold Supply Chain Services

Urban Logistics ServicesRetail Consolidation Centres Pack-to-order Refrigerated Locker Boxes

So what will the future of Urban Logistics look like in 20251. A minimum of 500 million deliveries per day will be made within cities by 2025. 2. People will volunteer to deliver goods on their way home becoming lifestyle couriers3. Access to cities in the future will be guided by Smart Cards and e-Tags4. Information Driven Logistics will become the norm with providers planning delivery trips even before orders are placed through predictive analysis and social media integration5. Logistics companies will innovate to overcome the future urban challenge introducing hybrid fleets, consolidated deliveries and locker boxes among others innovations for cities6. City planners will reinforce and introduce new policy measures to control vehicle access, provide economic incentive for sustainable freight deliveries, and invest in infrastructure such as freight villages

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Visionary Innovation Research

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2012 TopicsUrbanization – City as a CustomerSmart is the New GreenSocial Trends

Connectivity and Convergence

Bricks and ClicksInnovating to Zero

New Business Models: Value for ManyBeyond BRIC: The Next Game Changers

Future Infrastructure DevelopmentHealth, Wellness and Well BeingFuture of Mobility Upcoming Topics - 2013

Top Mega Trends That We Track• Global Mega Trends and its Implications to Urban Logistics to 2020• Urbanisation and Mega Cities and Impact on Industries and Business• New Business Models of the Future• Bricks and Clicks: Macro to Micro Implications of Connectivity and Convergence In Retail Industry• Macro to Micro Implications of Convergence on Industries, Products and Technologies• 3D printing and its Macro to Micro Impact on Manufacturing and Supply Chain Management• Macro to Micro Implications of Robotics and Artificial Intelligence on Industries

Frost & Sullivan’s Visionary Innovation SubscriptionProvides Global Mega Trends Analysis, Regional Implications and a Deep Dive into Specific Topics by Industry Verticals

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A Global Mega Trends Analysis• Featuring global study updates annually and analysis of key topics like Urbanisation, Smart is the New Green, Health, Wellness and Well Being

BRegional Mega Trends and Implications

• Analysis of global Mega Trends in key geographies such as1. Africa2. India3. China 4. Latin America• Identification of specific regional trends (e.g., beneficiation in Africa)

CFocus on Specific Mega Trends and Their Impact by Industry•Focus on specific Topics e.g. the Impact of Connectivity and Convergence on Healthcare Devices, Urban Logistics . • There will be over 30 such topics completed in next 12 months

360 Degree Perspective of Global Mega Trends and Analysis of their Impact on Industries

Macro Micro

From Macro to Micro: Taking Mega Trends from Information to Strategy Implementation

Mega TrendSelected trends that impact your business and markets

Sub TrendA sub-layer of trends that has a wide ranging impact Impact to Your IndustryVisualising the roadmap of these critical forces through scenario-building and macro economic forecasts

Impact on Future Product/ Technology

Analysis of Opportunities and Unmet Needs

To

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Learn More About “New Mega Trends”Published Book:New Mega Trends Implications for our Future Lives By Sarwant Singh     Publisher: Palgrave Macmillanhttp://www.palgrave.com/products/title.aspx?pid=577423

Join Our Mega Trend Group OnMega Trends: Strategic Planning and Innovation Based on Frost & Sullivan Research

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Contact Information

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Archana Devi VidyasekarSenior Research Analyst, Visionary Innovation Research Group

(+91) 4466814216

ArchanaV@frost.com

Archana Devi VidyasekarSenior Research Analyst, Visionary Innovation Research Group

(+91) 4466814216

ArchanaV@frost.com