Logistics affects our everyday life, no matter where we live. Whether we are moving people from one location to another or packets from factory to their final destination, it is all about logistics.
In the past ten years, I have been visiting China almost on a monthly basis. It has been amazing to see how especially Shenzhen has grown at every level. From no drones to the world’s leading city of drones and unmanned systems, and from a city of 5-6 million to a megacity of around 15 million.
This has changed Shenzhen’s way of moving parcels and people. 10 years ago there were no high-speed trains, but now you can reach neighboring cities like Dongguan, Guangdong in a matter of 15-20 minutes on a train that travels over 300km/h. The number of packets and people moved every day is just overwhelming.
Our logistic needs as a global society is growing exponentially. Every year global shipping keeps increasing. If we look at normal postal parcels, global shipping has been growing around 20% annually for the last 6 years. It has been estimated that global parcels will hit the 250 billion parcels/year mark by 2025.
2.6 Billion Orders In One Day
In 2020, Alibaba has reported that it has about 770 million active customers. This is about the same as the population of the European Union and the United States combined.
COVID-19 has caused an extra leap for parcel logistics. In November 2020, Alibaba had record-breaking 11.11. Singles Day sales spree. Normally, their annual growth has been 25-30%, but in 2020 they almost doubled their sales from 38,4 billion to 78,1 billion USD. That would mean roughly 2.6 billion orders. In just one day.
The order quantities are getting unimaginable. Already in 2018, Alibaba Singles Day amounted to 1 Billion orders in 24 hours, about 70% (700 million) of those being physical packets.
Sorting this type of quantity with human labor is already impossible. It has to be done with automated systems. Currently the most efficient automated sorting facility in China’s Hangzhou can handle around half a million parcels per day.
700 Million packets with half a million sorting capacity would take around 1,400 days from a single logistic center. That is 3.8 years of delivery work from one single company and from one single shopping spree day.
To prepare and to handle these increasing quantities, Alibaba’s Singles Day 2020 event had 3 million extra workers, 4,000 airplanes, trucks, and ships to clear all their orders.
Cainiao, one of Alibaba’s logistics partners, deployed close to 10,000 mobile unmanned vehicles with delivery lockers around the biggest cities in mainland China.
To overcome these challenges, covernments, corporations and private companies need to enhance their logistic systems. This is happening already at full speed here in Asia. Companies like Alibaba and JD.COM have their own massive internal logistics operations running 24/7. Products are transferred around the continent by robots and unmanned systems in great quantities every day.
For companies like Alibaba and AliExpress, it is cost-effective to have their own container ship fleets to deliver parcels from Hong Kong to Singapore just in about 72 hours. From there they ship most parcels out via airfreight.
Another possibility for them would be to ship all out from China or Hong Kong directly. But with current volumes that is already too much load for shipping operators.
JD.COM Pioneering in Indonesia
Companies in the western world are mulling over aerial delivery systems, and governments are trying to figure regulations needed for unmanned delivery systems.
Companies like JD.COM have already been using unmanned air and ground delivery systems since early 2015. Now they have hundreds of delivery depots in mainland China for serving all their delivery needs.
JD was the first company to get governmental approval for unmanned delivery systems in Indonesia. Right now, they are already building their new infrastructure. Global travel restrictions have naturally been slowing down this process but, as we all know, this is just temporary.
In 2020, JD announced that a new delivery system was deployed on the streets of Changshu city in Jiangshu province, starting their operations in August 2020. This first fleet consists of 100 minivan type unmanned delivery vehicles that will travel among normal traffic. In the coming years, vehicle quantity will grow to 100,000 vehicles and to every major city in mainland China.
This same Level-4 autonomous system was used earlier this year in Wuhan city during the COVID-19 outbreak and while the whole city was in total lockout.
Autonomous vehicle levels are categorized from 0 to 5. Level 0 has no automation, whereas Level 4 is already defined as High Driving Automation. This level, however, is allowed only to operate on GeoFenced areas using speeds less than 40km/h.
Parcel Deliveries Will Double by 2025
Pitney Bowes estimates that global parcel volumes will double by 2025. How can we handle this globally? Answers are automation, and also unmanned delivery systems. We are at the beginning of logistic revolution. This upcoming revolution will affect practically every person on this planet.
In the coming years, we will see a lot of new and different unmanned logistic operations. One example is the U-Space project which is an EU/SESAR project to create safe and secure ways to do aerial delivery and other operations in low altitude areas with different types of drones.
On top of aerial systems, ground and underground systems are rolling out. Companies like FedEX, Amazon and many more have been testing several types of ground and aerial systems for several years already.
JD, Alibaba, and Cainiao are already doing unmanned deliveries on a massive scale in Asia, because these types of operations are easier and faster to deploy in this part of the world than in the Western countries.
Aerial Systems Dominate in Rural Areas
Most visible unmanned solutions will be the aerial delivery vehicles that are easy and fast to deploy. Aerial vehicles are especially good in rural areas where you don’t have high rise buildings or other obstacles. Some will be short range systems and some for long range operations. Rural area medical deliveries are one that especially benefit from this type of operation.
Cities with highrise buildings are more challenging for aerial devices, and that way the majority of delivery systems in cities will be ground or underground based systems.
In the near future, we will start to see new types of logistic centers forming up in our cities. Aerial hubs will be in the areas closed from public and with good visibility around their flight pads. These can be built next to big parks and similar spaces. Ground vehicles depots can be basically everywhere in the city.
Ground Systems Pose Lower Risk
Unmanned logistics systems will be split between city-to-city operations and inner city operations. The latter will consist of self driving trucks, trains, and other vehicles. On areas where roads and other tracks do not exist, inner city operations will be mostly based on the aerial systems.
Roughly 80% of the future systems will be ground-based, because these are easier and friendlier to use than aerial systems that pose high operational risks. Moreover, our energy storage technologies are not good enough for long aerial operations. It will take another 5 to 50 years for these innovations to emerge.
The next few years will be exciting. It will be interesting to see how autonomous systems will start taking care of our logistic needs and how this will change the way we live.
More information here.
About the author:
Jani Hirvinen is an award-winning unmanned developer, co-founder of the ArduPilot, DroneCode and several other international unmanned development organizations. He is also Vice-Chairman of the World UAV Federation and board member of the Shenzhen UAV Industry Association. His companies are located in Thailand, Hong Kong and Finland.
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