Decoding The Physical Internet - Global Trade Magazine
  July 26th, 2016 | Written by

Decoding The Physical Internet

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  • The PI vision: Millions of π-containers effortlessly gliding through transportation networks directed by algorithms.
  • The big question for PI: When will the economic advantages outweigh the expenses of redesigning supply chains?
  • Convincing established carriers to share resources will be an uphill battle for the physical internet.

The first email was sent in 1971, and many people look to this as a pivotal moment in the history of the internet.

Flag day, which occurred in 1983, was arguably even more important to enabling the modern internet because that’s when ARPANET switched over to TCP/IP. This is the protocol that standardized data packets in a way that made it possible to transmit information to and from a wide variety of computers and networks.

Standardization is the core of what makes the internet so robust, and we continue to see the implications of that today as the Internet of Things brings a huge number of disparate devices online each day.

What if the same principle could be applied to logistics, enabling supply chains to operate with the same speed and efficiency as the internet? It would require a complete overhaul in how products and information are together moved, stored, realized, and supplied throughout the world. That is precisely what the Physical Internet Initiative (PII) envisions in a model it calls the physical internet (PI). With involvement from companies like Boeing, CHEP, P&G, Volvo, HP, Walmart, and J.B. Hunt, PI may not be as far-fetched as it sounds.

Standardizing the Wild West

Much like the internet, PI relies upon a set of rigorous standardization protocols that must be adhered to in order to make the system work. The resulting logistics web cuts out waste at every turn; this will put an end to proprietary systems and networks. Goods would move through the logistics web through a series of shared networks of lanes and distribution centers, equipped with continually connected technology for visibility and trackability in real-time. The ultimate goal is for PI to become smart enough so that it can automatically route each shipment on its optimal path, making changes as conditions dictate instantly.

The core of every aspect of PI standardization lies in new shipping units dubbed π-containers. These containers are envisioned to be modular and can be configured in multitude ways to accommodate most any freight. Able to communicate with each other and every node of the logistics web, these containers encapsulate goods so the network would be designed to handle exclusively π-containers. Similar to the current intermodal containers, π-containers would be interchangeable globally for every step of the logistics journey.

Can it really be done?

Millions of π-containers effortlessly gliding through transportation networks directed by algorithms certainly seems like a utopian vision, but the benefits in terms of cost and speed could fuel adoption. The economic, environmental, and social benefits laid out in the PI Manifesto are compelling. There is no denying that we ship too much air, goods spend too long in transit, spoilage is too high, and transportation in dense urban areas is challenging. Economic drivers are PI’s biggest allies and as cost goes down and throughput increases positive sustainability metrics are simultaneously achieved.

The big question is, when will the economic advantages outweigh the time, expense, and cooperation required to completely redesign supply chains? In this regard, there is really no comparison to the digital internet because it was designed by governmental and academic organizations. Convincing established parcel carriers like UPS and FedEx to start sharing resources will definitely be an uphill battle and the benefits of doing so will have to be compelling.

For now, PI is an interesting idea with a lot of smart and powerful people on board. The ultimate realization of the logistics web will likely look considerably different than the current PI Manifesto dictates, but the journey and incremental manifestations will prove interesting.

Eric Carlson is senior packaging consultant at Chainalytics.

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