"Physical Internet" for Business Could Reduce Carbon Emissions and Increase Profits
psiaki at Flickr/CC BY 3.0
Businesses are great at building systems -- systems for manufacturing, transporting, and retailing their products -- but most of the time, they build standalone systems, which require separate processes and infrastructure. However, if some of these businesses could work together to use a "physical internet," or shared network, in their supply chains, not only could they lower the consumer price points and boost their profits, but they could also significantly lower their carbon emissions, according to a study by engineers at Virginia Tech University and the University of Arkansas.
Chances are, unless we're involved in logistics, you and I don't even consider how a product gets from the manufacturer to the retailer, but managing the flow of products and raw materials takes enormous amounts of energy and produces quite a bit of greenhouse gases in the process.
The authors of the study, from the CELDi (Center for Excellence in Logistics and Distribution) Physical Internet Project, claim that:
We believe the annual impact of the Physical Internet, even when serving only a subset of the principal freight flows in the U.S. (say, 25 percent of all freight flows in the U.S.), would be $100 billion, 200 trillion grams of carbon dioxide emissions, and a reduced turnover rate of long-haul truck drivers (up to a 75 percent reduction).
That's a significant impact, considering that it only takes into consideration a subset (25%) of the entire supply chain in the US. But how would something like this work?
In a nutshell, the freight could be sent with a shared distribution system, including cargo trailers and storage warehouses. Suppliers could share physical space (and the distributed costs), so that tractor trailers are filled fuller (it's estimated that trailers carrying freight are just a little over half full, and 25% of the trailers on the road are empty) and the products are housed closer to where they will eventually end up. In addition, the transportation piece of the puzzle could utilize a '"relay system," which would transfer loads to trailers to move them more efficiently along the route (instead of using long-haul drivers to transport a single trailer from coast to coast, for example).
In addition, the Physical Internet Project suggest that logistics systems use a set of standard containers that could “snap together like Legos," which would fill trailers more efficiently -- possibly saving as much as 20% more space.
"The technology to make this happen is currently available," says Russ Meller, project researcher and UA Department of Industrial Engineering professor. "All parties, including the consumer, will benefit. Now we need industry partners to pilot a mini-physical internet and allow us to share those results with others in the industry."
Learn more about the CELDi Physical Internet Project at its web home at the University of Arkansas.
Hat tip to Sustainable Brands