The 2016 Techgistics Year in Review

2016 was an incredible year for tech in logistics as companies both large and small are working on some transformative technologies not just for logistics, but for society as a whole. Here’s a few interesting tech advancements in 2016 that were important for the year, but could also point to what’s to come in the near and long-term future.

Self driving Vehicles are no Longer Just Science Fiction

In 2016 there seemed to be a new story every week about self-driving cars. Ford announced plans for self-driving cars, Uber launched trials in Pittsburgh and San Francisco, acquired self-driving truck startup OTTO, Google spun off their self-driving car group into Waymo, and Elon Musk wrote his Master Plan Part Deux on self-driving cars. In addition, a self-driving OTTO truck completed the first autonomous commercial delivery in the U.S foreshadowing the potential of self-driving trucks in logistics. 2016 made it crystal clear that fully autonomous self-driving cars and trucks are no longer the realm of sci-fi fantasy. The software and hardware is available now. Long-haul trucks is one of the most compelling areas for the application of self-driving technology and will likely be adopted far faster than passenger self-driving cars. The big question will be what is the future for truck drivers, of which there are 3.4 million in America.

Drones for Good

Like self-driving vehicles, there was plenty of press surrounding drones in 2016. 7-Eleven and Google teamed up for drone deliveries from a 7-Eleven store in Nevada, Amazon delivered an order via drone in the UK, Domino’s delivered a pizza by drone in New Zealand, and JD.com delivered orders in rural China via drone. Mercedes and Matternet, a drone startup, collaborated on a concept delivery van where drones can be launched from the van to make deliveries autonomously. The drones can track the van as it moves along the delivery route and the van acts as a launch and landing pad for the drones. Tons of potential here and it's not a stretch to imagine a “swarm” of drones launching from a single truck which would effectively solve the last mile delivery problem. Imagine the efficiency gain in a scenario where 20 drones are launched from one truck.

While most of the drone-based advancements are trials (and possibly gimmicks), the real focus for drones should be for urgent, lightweight shipments in heavily congested mega-cities or in areas that have either poor infrastructure, such as rural Africa, or have geographic constraints, such as mountain communities that prevent efficient cargo delivery. Zipline and Matternet are two drone startups focusing on urgent and life-saving shipments.

Moving for forward, companies that have an interest in drones for the commercial sector need to take the lead in shifting the public perception of drones away from hackable, privacy-invasive, killing machines to something a bit more altruistic like making people’s lives better by supplying critical supplies and life-saving drugs. Put less focus on pizza deliveries and more focus on life-saving applications and the public's perception can be swayed, which will help pave the way to acceptance for drone package deliveries at scale.

Pokemon Go and Augmented Reality

The Pokémon Go craze highlighted the potential of augmented reality (AR) not just for gaming, but also for industrial applications. AR is a technology that superimposes a computer-generated sensory input such as sound, video, graphics, or GPS data into a user’s real view of the world. A good starting point for AR in the supply chain is in warehouses where workers are equipped with small glasses, like Google Glass, where the user will see a “digital pick-list” in their field of vision. The glasses offer real-time object recognition, navigation, barcode reading, and integration with the warehouse management system. DHL announced in 2016 that they will continue to expand their augmented reality program globally across several industry sectors.

There are other interesting use cases for AR in the warehouse here.

Robot Revolution

We are in the midst of a major sea-change in logistics where robots will increasingly play a central role in warehouses and last mile delivery. The rise of eCommerce has led to the need for logistics operators to rapidly fulfill and deliver small orders. This in turn, has led to advancements in robotics to support flexible and efficient warehouse order processing and last mile delivery. Amazon has about 30,000 Kiva robots in their warehouses. These robots locate the right shelving and move the shelving to a picking station, where workers take what is needed. The next generation robots, some of which participated in the Amazon Picking challenge in June, actually pick from the shelves and this technology is advancing rapidly.

It's not just Amazon working on robots, Fetch Robotics, is taking a collaborative approach where robots work alongside human workers. A robot, named Freight, follows a human worker around the warehouse and the worker packs items into totes. When a tote is complete, Freight takes the totes to it’s next destination and another Freight robot is dispatched to the human worker to continue picking.

inVia, another startup, claims to be the first goods to box picking robot where the robot picks from the shelf and places directly into a shipping box. Interestingly inVia offers a ‘robot-as-a-service’ model where instead of making a large capital investment in automation, customers pay a monthly service fee akin to a mobile phone plan. This provides a huge opportunity for small and medium-sized eCommerce companies to take advantage of automation without having to make massive capital investments. This has the potential to level the playing field with the large scale retailers in terms of order fulfillment costs and productivity.

My Five Most-Viewed Articles

Ways to Think About Last Mile Delivery - Last mile delivery is going to change significantly over the next decade(s). The rise of customer-centric supply chains and emerging tech are accelerating the pace of change.

Pokemon Go is Coming to a Warehouse near you! - DHL are expanding their testing of augmented reality (vision picking) in warehouses for picking. AR has massive opportunity to finally replace clunky handheld scanners and provide a compelling hands-free option for picking.

Amazon, FedEx, and Adjacent Innovation - Amazon’s previous forays into adjacent businesses (Marketplace, AWS, Fulfillment by Amazon) explain why they may get into the Logistics business.

Uber is a Platform for Logistics, not a Car Service - Uber is not interested in being just the car, truck, bus etc., they want to own the technology, data, infrastructure, and services required to optimally transport people and things. The Otto acquisition further strengthens the blatantly obvious - Uber is far more than just a taxi replacement.

Amazon Go and the Jobless Future in Retail - Amazon is attempting to completely reinvent how goods are purchased in retail stores. Just as Amazon transformed online retail with ‘one click’ purchases, there is the potential to transform brick and mortar retail with ‘just walk out’ purchases. Old jobs will be displaced and new jobs will be created, but what will be done to ensure a smooth transition from old jobs to new ones?

My favorite drawings

For clarification, the bar is incredibly low to quality for this list.

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