Researchers complete first phase of models on the Physical Internet
The Physical Internet – a concept in which goods are handled, stored and transported in a shared network of manufacturers, retailers and the transportation industry – would benefit the U.S. economy and significantly reduce greenhouse gas emissions, according to a new study by engineers at the University of Arkansas and Virginia Tech University. If 25 percent of the U.S. supply chain operated with such an interconnected system, profits for participating firms would increase by $100 billion, carbon dioxide emissions from road-based freight would decrease by at least 33 percent and consumers would pay less for goods.
“Our results indicate that the Physical Internet represents a virtuous cycle in which manufacturers, retailers and transportation providers all benefit in terms of increased profit margins and smaller environmental footprints,” said Russ Meller, professor of industrial engineering and director of the Center for Excellence in Logistics and Distribution. “The transportation network that is anticipated to emerge will also create better network design and customer service and will help address the problem of driver shortages and turnover.”
Currently, the transportation industry – with an economic value of trillions of dollars annually – is mostly a segmented enterprise with roughly three-fourths of manufacturers or retailers transporting their own goods without integrating or combining logistics with other carriers, manufacturers or retailers. Although there has been some success at integrating resources, most manufacturers still transport their own goods, a wasteful and inefficient process. According to U.S. Department of Transportation statistics, average truck-trailer loads are less than 60 percent full, and at least one out of every five – and possibly one out of four – trips is made with an empty trailer. This means that overall efficiency rates are no greater than 50 percent.
This problem has a significant impact on the U.S. economy and the environment. In 2007, road-based freight carriers consumed nearly 30 billion gallons of fuel, and from 1990 to 2008, carbon dioxide emissions associated with road-based freight carriers increased by nearly 15 percent, up to 517 trillion grams per year.
As a potential solution, the Physical Internet proposes an efficient system in which global supply-chain logistics are enabled by an open, intermodal (transportation by land, rail, ship or barge) system that uses standard, modular and re-usable containers, real-time identification and coordinated routing through shared logistics facilities. In other words, all supply-chain stakeholders – manufacturers, transportation providers and retailers – act independently to use a shared logistics network that increases the size of trailer loads and reduces or eliminates miles traveled by empty trailers.
via University of Arkansas, Fayetteville
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