I wonder how many readers are familiar with the Physical Internet concept, or PI for short. As the name suggests, it would be a physical manifestation of the digital internet applying similar organisational principles to the movement of freight as to the flow of emails. According to a 2014 book on the subject by Ballot et al, it would create a ‘global logistics system based on the interconnection of logistics networks by a standardized set of collaboration protocols, modular containers and smart interfaces for increased efficiency and sustainability’.
The original term appeared in an Economist article back in 2006, but the early development of the concept is mainly attributed to a French Canadian professor called Benoit Montreuil. His initial papers and a much-viewed TEDx talk on the subject spawned a literature of around 190 publications between 2008 and 2019, a third of them academic. What seemed at first a rather far-fetched idea, gained credibility and traction when the PI was adopted by the European Technology Platform for Logistics (ALICE) as its 2050 vision of European logistics.
The PI has been variously described as a ‘new supply chain paradigm’, ‘probably the most ambitious concept towards efficiency and sustainability in transport and logistics’ and even ‘the logistics innovation of the century’. So why is it not featuring more prominently in logistics discussions and business plans? I would suggest for four inter-related reasons.
First, although ALICE and others have been busily raising the profile of the PI through reports, videos, webinars and conferences, it takes time to spread the word. It is also difficult to draw the attention of managers to a concept that many may perceive as being rather academic and still more theoretical than practical. Third, the concept itself is so radically different from current logistics practice that most businesses probably regard it as well beyond their planning horizon. Finally, there is the question of how existing logistics systems will migrate to a PI world of open, re-modularised systems, shared assets and devolved control.
In response to this question, ALICE has plotted a series of roadmaps showing how nodes, networks, access and governance can be transformed to realise the PI vision. The case for this transition has been greatly strengthened by EU and UK climate change targets. By offering the prospect of much higher utilisation of vehicle and warehouse capacity, the PI could be critical to the decarbonisation of logistics, possibly cutting its energy consumption and emissions by 30% by 2030.
The need for deep and rapid decarbonisation coupled with faster-than-expected digitalisation of logistics has compressed PI time-scales. ‘Advanced pilot implementations’ are now expected by 2030 with ‘full Physical Internet implementation’ by 2040. Even if the PI is to be the logistical holy grail, this 10-20 year time-frame probably seems an eternity to managers who in 2-3 years have had to wrestle with Brexit, the pandemic, the worst global trade disruptions in a generation, acute labour shortages and now the supply chain impacts of the war in Ukraine.