PIONEER: Physical Internet, an Outlook on Neighborhood and Environment for E-commerce Retail

Main applicant

Subsidy from: TKI Dinalog
Time period: 2019-2022
Budget : €500,000

Consortium Partners: University of Groningen, Districon, ViaTim, Cycloon/Fietskoeriers.nl, Wehkamp, DHL, Centric, IMCC, Dropper, ZUPR.

The Physical Internet (PI) is a future vision for fully open and connected logistics networks, in which physical, digital, operational and financial interconnectivity are central. Research has shown that PI offers opportunities for more efficient and sustainable logistics. Exchange and bundling of deliveries, and the sharing of storage and transport capacity between logistics parties becomes a matter of course with the realization of PI-based networks.

In the current development phase of e-commerce, where much is being experimented with new logistics concepts, the step towards introducing PI-based concepts is much smaller than in other markets where the logistics organization format has already crystallized out. Moreover, due to the growth of the market, even small logistical changes can have a major impact in the longer term. Because e-commerce mainly relates to the transport of packages, bundling of goods flows - on which many of the benefits of PI are based - is particularly relevant.

A core aspect of the Physical Internet is the multi-layered network structure, with different types of hubs where goods can be stored and transhipped. Micro hubs, small-scale logistics operations at fixed locations with a small geographical coverage (city center, residential area or street) play an important role in this. Micro hubs are not only a theoretical concept for PI, but are also increasingly used in today's logistics market.

This project focuses on the development of PI-based concepts around micro-hubs for e-commerce, whereby a balance is sought between service orientation, efficiency, sustainability and quality of life.

Work package 1: Local resident serving as package delivery person. The smallest type of micro hub is the street hub. This is a distribution point for packages that can be located in a residential home. ViaTim is a start-up that is setting up such street hubs. Packages from web stores such as wehkamp.nl are delivered there by DHL. The street hub forms an extra link in the current logistics structure. But the street hub also saves on stops and kilometers of delivery vans. This work package examines the logistical value of street hubs and the impact on sustainability and quality of life. In addition, concepts are being developed for the integration of street hubs in PI-based logistics networks.

Work package 2: Multichannel logistics. The logistics of stores and web stores are now often still separated. Integration offers possibilities, for example for delivery of online orders from stores, or faster delivery from stores. This integration actually turns stores into micro hubs within the meaning of the Physical Internet. Districon, Centric, IMCC and ZUPR are each working from a different specialty to bring logistics closer to each other for online and offline product sales. The focus is on chain management, transport, inventory management and warehouse management. Furthermore, possibilities for predictive logistics are being explored.

Work package 3: Logistical network integration of bicycle couriers. More and more bicycle couriers are appearing in cities. These bicycle couriers work from a city hub from where they take over the last segment of delivery in an environmentally-friendly manner. With Cycloon / Fietskoeriers.nl and Dropper, this work package explores the possibilities for bicycle couriers in PI-based networks and experiments with various forms of organization and control of bicycle transport between micro hubs. In addition, algorithms for resource pooling and dynamic deployment for integration of these local services are being developed.

The research brings supply and demand closer together, optimizing warehouse operations, return logistics as a central business, reducing bottleneck last-mile delivery, effective multichannel sales strategies and bundling of orders. Furthermore, this project contributes by developing new supply chain management applications and an expected reduction in mileage and CO2 emissions through the use of micro hubs and bicycle couriers. Participating master's students, as young professionals, will immediately take the knowledge they have acquired into practice.

The chosen design of the project offers participating companies, including three start-ups, the possibility of directly implementing the knowledge that is being developed in this project on the basis of practical analyses, cases, theory development and pilots. Results will be shared outside the consortium through external communication, discussion and working groups. The knowledge developed about cooperation between start-ups and established parties can further the supply chain management concepts. Social effects are that new jobs are created, which also offer opportunities for people who are at a distance from the labor market.