Delivering to the Cities of Tomorrow
Global Mega Trends and the Future of Urban Logistics
Agenda
Introduction and Definition of Urban Logistics
Presentation of Top Mega Trends of the Future
Influencing Urban Logistics
Urban Logistics Business Models of the Future
Macro to Micro : How To Apply Mega Trends Within Your
Organisation to Develop Growth Strategies
2
“Only those who will risk
going too far can possibly
find out how far one can go.”
– T.S. Eliot
What are Mega Trends
It can happen without you noticing it !!!
4
African Mega Trends
Social Trends
Bricks and Clicks
Urbanisation
Smart is the new green
New Business Models
Connecting the
Unconnected
Future Infrastructure
Source: Frost & Sullivan
5
What is Urban Logistics?
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
Examples of typical urban logistics activities
Transportation
& Distribution
Activities
Warehousing
Activities
Value-Added
Activities
In-Bound
Transportation
Storage
Planning /
Marketing
Outbound
Transportation
Inventory
Management
Other
Optimisation
Techniques
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Global Mega Trends
and Urban Logistics
Mega Trends Driving Urban Logistics Industry
1
Urbanisation
2
By 2025, 3 out of 5
people will live in cities
globally
Connectivity and
Convergence
By 2025, each person
will have a minimum of
five connected devices
3
Bricks & Clicks
By 2025, 20% of retail
will happen through
online channels
Future Infrastructure
Development
4
By 2025, globally over
$800 billion will be
spent on high speed rail
projects.
What does this mean for Urban Logistics?
500 million deliveries
per person per day to
cities
‘On-the-fly’ deliveries
will have to made
anywhere, anyhow,
faster and quicker
Demand for urban
parcel deliveries will
increase – shipments to
become smaller and
frequent
An fuel and carbon
efficient alternative to
road and air transport
and muti-modality.
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Top Mega Trends in Africa
3 Mega Cities by 2025
8 Mega Corridors by
2025
4 Mega Regions by
2025
70 Satellite Towns by
2025
Source: Frost & Sullivan
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Mega Trend 1 : Urbanisation
Mega Cities in Africa: Engines of Economic Growth
253.2
Mega Cities, City –level GDP and
Population, Africa, 2014-2025
Alexandria
6.2 Million
68.4
(2025)
31.7
101.0
Cairo
14.7 Million
(2025)
48.4
30.5
124.6
47.9
35.2
12.1
Abidjan
7 Million
(2025)
Lagos
18.8 Million
(2025)
87.6
21.6
57.7
24.5
Kinshasa
14.5 Million
(2025)
Luanda
8.9 Million
(2025)
Khartoum
7.1 Million
(2025)
103.0
19.5
5.8
47.3
164.1
Nairobi
7 Million
(2025)
Dar es Salaam
7.2 Million
(2025)
79.5
GDP (Nominal) ($ Billion) by 2025
GDP (Nominal) ($ Billion) in 2014
Mega Cities
Cities >6 million population by 2025
Johannesburg
10 Million
(2025)
Mega City is defined as a city
with population of over 8
million
> 75% Urbanization rate by 2025
Source: Business Insider; UN population Database, 2014 Revision; African Development Bank; Frost & Sullivan
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Mega Trend 1 : Urbanisation
Mega Corridors: Reconfiguring Africa’s Space and Economy
Mega Corridors, Africa, 2025
The North Delta
Region
Future Corridor
Development
B
B
a
Combined
population of
77.0 million
1,000 km AbidjanOuagadougou Corridor
b
$
Trans-Cunene Corridor
between DRC with SA
through Angola and
Namibia.
More than 50%
of National GDP
Ouagadougou
a
C
Ibadan
Addis Ababa
Abidjan
c
c
Accra
Kampala-NairobiMombasa urban corridor
(900 km )
A
Nairobi
Kinshasa
North-South
Corridor
Dar es Salaam
Luanda
C
The Greater Ibadan
Lagos Accra
(GILA) Corridor
b
Combined
Population: 533.0
Million
Johannesburg
Combined
population >18.0
million
A
Durban
$
Combined GDP of
$127,592,000.
$
Combined GDP of
$833.00 billion or
58% of Africa’s
GDP
Cape Town
Source: UN-Habitat, 2014; Frost & Sullivan analysis.
Mega Trend 1 : Urbanisation
Urbanisation Will Compel Logistics Companies To Have More
Spokes in the Cities and Lesser Hubs
The Hubs:
Central Distribution Centres in
the outskirts
80% - 100% load factor
Spokes:
Drop off-points for deliveries
in city centres
Medium and Light
CVs will deliver goods
In-night services, Earlymorning deliveries
to warehouses within
city
Reduce the number of
trips by almost half
100% on-time deliveries
Heavy Commercial
Vehicles (double trailer
trucks) will carry goods to
big warehouses at outskirts
Outer Ring Road
25 miles from City
Centre
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Mega Trend 2 : Connectivity and Convergence
Logistics Technology to Become More Proactive than Reactive
Urban logistics
opportunities
Real-time is Too Late…
Social Media
Integration
2025
Cloud Logistics
Intelligent
Transport
Systems
2020
‘On-the-Fly’ Deliveries
Sensors and
Terrain
Mapping
2015
2010
Individually optimized
transport solution
Traffic
Predicting
Software
Quality Control ‘On the
Move’
Urban Lead Logistics
Telematics
Reactive
Proactive
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Mega Trend 3 : Bricks and Clicks
Global Online Retail Sales To Reach $4.3 Trillion By 2025
Accounting for 19% of Total Retail
“More the ‘Clicks’ More the Truck Mileage”
Online Sales
$23
Trillion
Non-Online Sales
% share of online in total retail
$11.8
Trillion
95%
5%
24%
25%
10%
15%
$18.7
Trillion
81%
$4.3
Trillion
19%
$1.32
Trillion
$11.25
Trillion
$0.55
Trillion
18%
$1.30
Trillion
1
United
States
2 China
$0.19
Trillion
3
United
Kingdom
$0.17
Trillion
4
Japan
$0.95
Trillion
5
Germany
The Retail Model Will Evolve From a Single/Multiple Channel Model to an
Integrated Cross Channel Model Demanding For Multiple Delivery Options
Bricks (pre-2000)
Department
Stores
Supermarkets
+Advent of Clicks (post-2000)
Online
Hypermarkets
Mobile Payments Mobile Apps
The Future - Bricks and Clicks (2015 and Beyond)
Virtual Stores
Interactive Stores
Hyper Online
Markets
Source: Frost &
Sullivan Analysis
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Retail Logistics Will Innovate Its Last Mile Offering Multiple
Delivery Options From Home Delivery to Self-Collect
Ecommerce pressures on the supply chain
Smaller
Shipments
Frequent
Deliveries
Inventory
Visibility
Multiple
Delivery
Options
Cold
Supply
Chain
Services
Urban Logistics Solutions
Same-Day
Night Time
Click ‘n’ Collect
Locker Boxes
Refrigerated
Locker Boxes
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Mega Trend 4 : Higher Speed Logistics
In Future, HS Rail will not only offer high speed personal mobility
but will also transport cargo at a lesser fuel and carbon cost
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
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)
Urban Logistics
Trends and Business
Models
How will demand for urban logistics affect the spending on
logistics in urban environments ?
2011
Urban Logistics Spending
$2.55
trillion
2020
2.5x
$5.98
Trillion
Transportation & Distribution
50%
55%
Warehousing
32%
23%
Value-Added
18%
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 Urban Freight Traffic
B2C trips will Come to rival the current dominant segment, B2B by 2020
underpinned by growth in ecommerce
Average length of haul will decrease as warehouses and delivery spokes move
further into cities
100% Loading Factor of Trucks – Full Optimisation
Smaller 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
The Concept of future delivery vans will revolve around
technology, carbon footprint, fuel efficiency and Aerodynamics
•
Vehicle to grid
Communication,
Navigation, green
routing, terrain
mapping, OnBoard Traffic
analysing tools,
Geo-fencing, and
Smart sensors
Connectivity
•
•
Engine &
Fuel
•
•
•
•
Design
•
Electric
Hybrids/Fuel cell
Fleets
CNG
HCCI
Lighter weight
vehicles (Plastic
Shell)
Low loading floor
constructions
Roll on-roll off
systems
Driver
Support
•
Tire Pressure
Monitoring
System, Driver
Distraction
Warning, Adaptive
cruise control
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Distribution will become more Consolidated and Move Toward the
City Centre
Without Consolidation Centres
With Consolidation Centres
Consolidation centre
Future of Consolidation and Last Mile Delivery
More Bundling, Intermodality and Microdistribution in Urban
Areas
Types of Urban Distribution
Urban Consolidation
Centres
Urban Transhipment
Areas
Urban Intermodal
Hubs
Mobile Depots / Freight
Buses
Types of Urban Last-mile Deliveries
Microdistribution
Locker Boxes
Mobile Collection
Postal Service
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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
Low Emission Zones
Time Windows
Vehicle Weight
Restrictions
Economic
Instruments
Special
Infrastructure
Congestion Charging
Freight Lanes
Incentives & Subsidies
Urban Consolidation
Centre
Loading /
Unloading Areas
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Examples of Cities experimenting with Urban Freight Measures
City of Paris Parking Bays
London Congestion Zone
Barcelona Night Time Window
Italy’s Urban Consolidation Centres
25
How are Logistics Services Providers Scaling up to meet demand for
Urban Logistics?
Autonomous
Fleet (SelfMonitoring
Vehicles)
Future
2020
Cloud Logistics
Lifestyle Carriers
2015
Hybrid / Electric
Fleet / Shared
Fleet
Vehicle Tech
(Smart Trucks
with Sensors)
Pick-Up Vans /
Self- Collection
Points
2012
Multimodal
Deliveries
Telematics / Real
Time Solution
Locker Boxes
Past
2010
2008
Off-Peak
Deliveries
Transportation
Consolidation
Centres
Distribution
Proprietary EDI
Technology
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Examples of Logistics Service Providers Experimenting with Urban
Logistics Models
DHL Consolidation Centre
Fedex Smart Ecommerce
Solutions
TNT Express Tricycles
UPS-Kiala
TNT Express Bento Box
Geodis Distropolis
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Top Industries Using Urban Logistics Services in the Future
Retail
Pharmaceutical
Food &
Beverages
Apparel
Industry
Trend
Smaller Stores
Generic Medicines
Chilled and Frozen
Food
Bricks and Clicks
Urban
Logistics
Implication
Smaller shelf size –
need for constant
replenishment
No more
homogenous single
supply chain model
Chilled and Frozen
Food
Free Shipping –
Low cost services
Urban
Logistics
Services
Retail
Consolidation
Centres
Pack-to-order
Cold Supply Chain
Services
Self-pickups
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So what will the future of Urban Logistics look like in 2025
1. 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
couriers
3. Access to cities in the future will be guided by Smart Cards and e-Tags
4. Information Driven Logistics will become the norm with providers planning
delivery trips even before orders are placed through predictive analysis and
social media integration
5. Logistics companies will innovate to overcome the future urban challenge
introducing hybrid fleets, consolidated deliveries and locker boxes among others
innovations for cities
6. 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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From Macro to Micro: Taking Mega Trends from Information to
Strategy Implementation
To
Macro
Micro
Mega Trend
Analysis of Opportunities and
Unmet Needs
Selected trends that impact your
business and markets
Sub Trend
Impact on Future Product/
Technology
A sub-layer of trends that has a
wide ranging impact
Impact to Your Industry
Visualising the roadmap of these
critical forces through scenariobuilding and macro economic
forecasts
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Learn More About “New Mega Trends”
Upcoming Book:
New Mega Trends
Implications for our Future Lives
By Sarwant Singh
Publisher: Palgrave Macmillan
http://www.palgrave.com/products/title.aspx?pid=5774
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Join Our Mega Trend Group On
Mega Trends: Strategic Planning and Innovation Based on
Frost & Sullivan Research
31
Frost & Sullivan’s Visionary Innovation Subscription
Provides Global Mega Trends Analysis, Regional Implications and a Deep Dive into Specific
Topics by Industry Verticals
B
A
C
Global Mega Trends
Analysis
Regional Mega Trends
and Implications
• Featuring global study updates
annually and analysis of key
topics like Urbanisation, Smart is
the New Green, Health, Wellness
and Well Being
• Analysis of global Mega Trends in
key geographies such as
1. Africa
2. India
3. China
4. Latin America
• Identification of specific
regional trends (e.g.,
beneficiation in Africa)
Focus 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
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Contact Information
Mani James
Commercial Director, Africa
+27 21 680 3208
mani.james@frost.com
33