MHI Solutions

Sustainability

Smart City Logistics at the Crossroads of Emerging Collaborations

As traffic in cities increases, strategic urban logistics planning that leverages technology to combat congestion, noise and pollution will be key.

By Brian Reaves

Although still very much in its infancy, developments within Smart City Logistics continue to occur as municipalities, businesses and academia explore the ways connected technologies can help urban areas address the increasing challenges of congestion, noise and pollution associated with more frequent last mile deliveries to their growing populations.

But let’s back up a second. You might be wondering what exactly Smart City Logistics is, and why you should care. Don’t worry—you’re not alone in those sentiments. In developing MHI’s fourth Annual Industry Report, Thomas Boykin, leader of strategy and operations for Deloitte Consulting’s Supply Chain and Manufacturing Operations practice, discovered that 50 percent of the 1,100 manufacturing and supply chain industry leaders surveyed weren’t aware of Smart City Logistics either.

The 2016 Annual Industry Report (available as a free download at MHI.org) defines a Smart City as “an urban area that uses information to design policies and procedures that benefit its citizens.” It further describes Smart City Logistics as “the idea that logistics providers can leverage many innovations and technologies…to find solutions to this issue that work for government, businesses, consumers and the environment.”

“Although MHI has been ahead of the curve in highlighting Smart City Logistics—even devoting an entire section to it in the 2016 Annual Industry Report—awareness here in the U.S. is just not as widespread as in places like Europe and Asia, where space is much more confined,” Boykin notes.

MHI has focused on Smart City Logistics for three reasons:

  • The United Nations says 54 percent of the global population currently lives in urban areas, and by 2050 nearly 86 percent of developed countries’ populations—and 64 percent of developing countries’ populations—will too. Domestically, 65 percent of the current U.S. population lives in cities of more than 50,000 people.
  • The ranks of online shoppers grew by nearly 20 million people from 2015 to 2016, according to the National Retail Federation reports. E-commerce consumers are spending more and ordering more frequently online too.
  • In the U.S., goods transport via freight and delivery truck courier dominates 25 percent of urban road capacity.

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According to the recently released 2018 MHI Annual Industry Report, “Overcoming Barriers to NextGen Supply Chain Adoption,” eight out of ten survey respondents believe these supply chains will be the predominant model within just five years. However, the report found that the adoption of some of these technologies was slower than originally reported when MHI started the annual report in 2014. The report cites three top barriers to adoption of these technologies: 1. Making the business case for NextGen supply chain investments. 2. Tackling the supply chain skills gap and workforce shortage. 3. Building trust and security in digital, always-on supply chains. This issue of MHI Solutions focuses on the adoption of these digital solutions, from best practices in robotics and artificial intelligence to blockchain and innovations in last mile delivery.

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