"ATLANTIC DISCUSSION PAPER OUTLINE"
WG 2.1 Discussion Paper Outline ATLANTIC A Thematic Long-term Approach to Networking for the Telematics & the ITS Community Work Group 2.1 Intermodal Freight, Pre-clearance, Logistics DISCUSSION PAPER OUTLINE Prepared by WG Leader: Teodor Gabriel Crainic, UQAM and C.R.T. Rapporteur: Lewis Sabounghi, Consultant, Montréal May 1, 2003 2003-11-03 1 WG 2.1 Discussion Paper Outline Work Group 2.1 TITLE Intermodal Freight, Pre-clearance & Logistics SCOPE Contributions of ITS to freight transportation, fleet management and logistics. We take the subject to encompass broadly the issues related to movements of freight. As for all aspects of the ATLANTIC project, the discussions and the corresponding papers must consider i) policy; ii) hardware and technology; iii) intelligence and software aspects. LEADER Teodor Gabriel Crainic, Professor Management et technologie, U.Q.A.M., and Director, ITS Laboratory Centre for Research on Transportation Université de Montréal 514 343 7143 (tel) 514 343 7121 (fax) email@example.com RAPPORTEUR Lewis Sabounghi Principal Sabounghi & Associates 514 867-5737 or 613 347-7345 (tel) firstname.lastname@example.org 2003-11-03 2 WG 2.1 Discussion Paper Outline Context and Proposed Topics The development of Intelligent Transportation Systems (ITS) and technologies dedicated to the movement of goods, freight vehicles and services is closely related to the evolution of the freight transportation industry, particularly relative to the penetration and utilisation of information technologies, in response to the tremendous shift in commercial and industrial practices of the last decade. New challenges for the transportation industry resulted from the major changes affecting supply chains and logistical processes in trade and commerce. The first change may be attributed to the impetus toward inventory reduction that led to the “Just-in- Time” procurement practices and, more recently, to just-in-time replenishment of goods in the retail industry. The procurement and distribution of goods has also been significantly influenced by the powerful trend toward the globalization and liberalisation of markets and the creation of free trade zones. Agreements between countries over wide geographical regions such as Europe and North America have already resulted in the creation of a number regional or continental free trade zones, such as the territory defined by the North American Free Trade Agreement (NAFTA) composed of Canada, USA, and Mexico. And the movement is far from exhausted. The liberalisation of markets has been accompanied by a restructuring of manufacturing and distribution channels worldwide. Production units are re-located and the components required for final assembly of complex industrial products might be brought in from many distant locations. In the same time, trans-national centralized warehousing facilities and value added distribution centres are changing the flows of goods on the American and European continents. These changes have certainly resulted in higher demand for transportation. They have also increased the requirements for freight transportation services in terms of enhanced customer value: reduce transportation and distribution costs, while responding to the customer needs in terms of delivery time and reliability. Moreover, events such as 9/11, the war on terrorism and the war on drugs have created potential impediments to the flow of goods due to safety and security threats that can only be mitigated through the use of technology and increases in efficiency. These factors have put, and continue to put, tremendous pressure on freight carriers (including management of fixed infrastructures such as ports, airports, inter-modal platforms, etc.) to reduce and control costs, to plan and operate efficient, timely, and reliable services, to react rapidly to new customer requests, emerging or shifting business opportunities, changes in the economic and regulatory environment. A significant part of the answer the freight transportation industry offers to these challenges is based on information and decision technologies: two-way communication, location and tracking devices, electronic data interchange, advanced planning and operation decision support systems, electronic business. Intelligent Transportation Systems integrate and enhance these technologies within the firm, as well as through the linkages and exchanges between the firm and its environment (customers, partners, regulators, etc.) 2003-11-03 3 WG 2.1 Discussion Paper Outline It is traditional to examine ITS for freight transportation according to the scope of the particular systems: Commercial Vehicle Operations (CVO) for system-wide, regional, national, or continental applications and Advanced Fleet Management Systems (AFMS) dedicated to the operations of a particular (group of) firm(s). Although different in scope, both categories of systems require a number of enabling technologies, some of which are already firmly established, some that are still emerging. We will partially follow this classical approach in defining the proposed discussion topics that aim to reflect current interests and challenges in freight transportation-related ITS (see appended introductory descriptions for each topic; more complete outlines are available from the WG leader or rapporteur): 1. Freight E-data and standards 2. CVO / CVISN 3. Border ITS 4. Intermodal facilities management and operations 5. Fleet management 6. City logistics 7. E-business, M-business, the E-society Experts Will be invited to join the discussion • Researchers from academia (as well as, eventually, other research institutions) • Members of the Ministries of transportation and other government ministries (e.g., Canada Customs, Industry and Commerce) and agencies (e.g. SAAQ) • Associations and interest groups (e.g. AQTR) • Carriers • Consulting firms and other industries 2003-11-03 4 WG 2.1 Discussion Paper Outline I. Freight E-data and Standards The procedures active within the international supply chain are complex, and often cumbersome. At work are numerous interactions between different parties, which are guided by many factors, including type of product, country, terms of business, and the methods of operation of both the buyer and the seller. Given the broad range of activities possible, it is hardly surprising that within the context of actually transporting goods, a single transaction may involve many languages (both electronic and human), standards, and operational practices. If a supply chain is to operate efficiently and effectively, the relationships, actions, and terms used by the different participants to effect trade must be understood. Seamless exchange of accurate, complete, and timely data at transportation hand-offs has always been important for efficiency and accountability. In addition there is now a growing understanding of needs for security of transport information, and for transfer of information related to security against terrorism as well as theft and traditional contraband. It is imperative that standards be developed to address and facilitate dealing with these needs. Several international organizations and committees focus on these issues for various types of transportation-related activities. It is imperative, however, that the standards developed for various modes and types of terminals be compatible such that a coherent set of standards be developed for ITS and the entire logistics chain. II. CVO / CVISN The Commercial Vehicle Operations (CVO) area of ITS has been defined as “Advanced systems aimed at simplifying and automating freight and fleet management operations at the institutional level”. National or regional authorities, in collaboration with carriers and firms that propose the required technologies, usually initiate CVO projects. The goal is to increase the performance of the highway and customs systems and to enhance the efficiency of commercial vehicle operations by offering seamless operations through vehicle and cargo identification, location and tracking, pre-clearance and in-motion verifications. The importance of CVO type of applications has been acknowledged quite early on in ITS history, and a significant number of CVO projects have been undertaken or are currently under way. CVO systems have come a long way in the last years. Many technologies are now accepted and deployed on a regular basis. Several issues have still to be addressed, however: • Standardisation and inter-operability. The issue becomes even more sensitive when examined at the continental and world-wide level. • The information to register on the automatic vehicle identification devices for maximum system efficiency while accounting both for the needs of the authorities, the privacy concerns of the firms and people. 2003-11-03 5 WG 2.1 Discussion Paper Outline • The costs associated to such systems. Several business models have been proposed and experimented in the U. S. and elsewhere and the relative merits must be evaluated. • How CVO (as well ad AFMS) systems are integrated into and articulated with the national ITS architectures and with the other components of ITS. • How well are the CVO concepts, technologies, and practices understood and accepted by the various actors, such as shippers and carriers. III. Border ITS A major class of CVO projects, particularly active in North America, concerns the operations of border crossings. The main goal is to clear drivers, vehicles, and cargo in order to speed up the passage of trucks carrying manufactured and agricultural goods between Canada and the United States and between the U.S.A. and Mexico. This has to be achieved without jeopardising the main role of the border controls regarding immigration, security, illicit cargo, agricultural controls, etc. Several projects undertaken in the 90’s have addressed the issue of the harmonization of technologies and procedures at borders between the United States and Canada (as well as between the U.S.A. and Mexico). The current international context has brought to the forefront the issues related to the crossing of the Canada - U.S.A. border. However, all the previous issues of compatibility, interoperability, efficiency, costs, etc., are still very relevant. The main issue, however, is how to decrease, or at least control, the waiting time at the border within the need for increased security verification. This theme is strongly related to the others. From a government investment and policy perspective, this dovetails into themes II and IV. From a carrier management and integrated logistics points of view it is related to themes V and VII. Yet, given its particular relevance in the current political and economic context, we believe that it should be looked at in its own right. IV. Intermodal Facilities Management and Operations Terminals play a central role in freight transportation and logistics activities. All consolidation-type carriers, less-than-truckload motor carriers, railways, express mail services, regular container navigation lines, container transportation, etc., rely on consolidation operations: of freight into vehicles and of vehicles into convoys (e.g., trains, road or barge trains, ships). Many of these terminals are intermodal terminals, that is, they are designed to accommodate vehicles of at least two different transportation modes and to facilitate the transfer of freight, possibly following classification and consolidation activities, from one transportation mode to another. Ports, airports, rail terminals, motor carrier break-bulk facilities are typical intermodal terminals. Terminals also play an essential role in the performance of intermodal transportation and, more generally, the performance of logistics chains and on-time deliveries, as 2003-11-03 6 WG 2.1 Discussion Paper Outline emphasized by the particular research and development programs dedicated to these issues with the European Framework Programs. Last, but not least, terminals play a central role in ensuring the security and integrity of shipments. See theme III. Significant progress has been accomplished in introducing advanced information and decision technologies to freight terminals, particularly ports. Considerable efforts are still being undertaken, while many innovative projects are proposed around the world. V. Fleet Management This type of ITS applications corresponds to “Advanced systems aimed at simplifying and automating freight and fleet management operations at the carrier or business-to- business level”, or AFMS for short. Similar to many other ITS areas, development proceeds along two major, parallel but complementary, directions. The first concerns the electronics, location, tracking, and communication hardware and associated information technology software. The second, the methodologies – models and algorithms – required to process the data and transform it into timely and meaningful information and intelligent advice for advanced fleet and operations planning, management, and control systems. Once the fleet is equipped and linked to the dispatchers’ computers and company’s data processing and storage infrastructure a huge quantity of data becomes available for immediate decisions and background analysis and planning activities. Advanced Fleet Planning and Operation Systems aim to process this information and to integrate it to the current transportation plan and customer requests to achieve a more timely operation, efficient allocation and utilization of the fleet, and satisfaction of customer requests. Differently put, similarly to other ITS areas, there is the need to infuse these systems with Intelligence. This need is more and more widely acknowledged and it is directly reflected in the national ITS architecture proposals. Developments, challenges, and opportunities occur both at the level of a carrier and for groups of carriers, shippers, and agencies joined together through business-to- business networks. Here are a few important research and development directions: • Real-time management of operations. • The trade off between accuracy of results and response time in real-time settings. • Interactions among and integration of the information obtained in real-time, the planning methods and tools, and the actual implementation of transportation plans in an ITS environment. • Integration of planning and operations along the logistics network (chain). VI. City Logistics 2003-11-03 7 WG 2.1 Discussion Paper Outline The transportation of goods constitutes an extremely important activity taking place in urban areas. For people, it directly ensures adequate supplies to stores as well as delivery of goods at home. For firms established within city limits, it forms a vital link with suppliers and customers. There are few activities going on in a city that do not require at least some commodities being moved. Moreover, the urban freight transportation industry is a major source of employment. Yet, freight transportation is also a disturbing activity in urban centres. Vehicles carrying freight move on the same streets and arteries as the private and public vehicles transporting people. These vehicles make a significant contribution to congestion and environmental nuisances, such as emissions, noise, and so on, that impact adversely the quality of life in urban centres. Freight traffic also contributes to the belief that “cities are not safe” that pushes numerous citizens to move out of the city limits. One thus assists at the emergence of an acknowledged need to analyze and eventually control the movements of freight vehicles in cities. The goals are: 1. Reduce congestion and increase mobility; 2. Reduce pollution and noise; Contribute to reach the Kyoto targets; Improve the life conditions of the city inhabitants; 3. Do not unduly penalize the city centre activities such as not to “empty” it. New organizational models for the management of freight movements within the city limits are called for. Clean city logistics implies the utilization of clean-emission vehicles, at least for part of the operations. Efficient city logistics passes through freight consolidation of various shippers within the same vehicles and an integrated planning of operations and deliveries. These models therefore challenge the city authorities, businesses, carriers, and citizens and require public-private understanding, collaboration, and innovative partnerships. Intelligent Transportation Systems should prove a significant enabling factor towards the conception and deployment of such advanced urban freight management policies and systems. VII. E-business, M-business, the E-Society The current volatility of the stock exchange notwithstanding, the development and utilization trend of e-business is clear and strong. This signals to transportation firms, as to other economic agents, that significant opportunities exist in terms of larger and stronger business partnerships, more streamlined, rapid, and demand-responsive decision processes, improved operations and service levels, enhanced customer satisfaction and, ultimately, profitability. To reap the benefits of these opportunities, transportation carriers may take advantage of the convergence between ITS and e-business technologies. The definition and development of Intelligent Transportation Systems concepts and technologies started well before the business community realized the potential of Internet-based operations, and electronic commerce started to penetrate the business-to- consumer and business-to-business exchange world. The two application domains share several characteristics and enabling technologies, however. Thus, ITS and, in particular, Commercial Vehicle Operations and Advanced Fleet Management Systems, rely on 2003-11-03 8 WG 2.1 Discussion Paper Outline information and decision technologies, two-way communications, electronic data interchange, computing and data handling technologies, advanced planning and operation decision support systems, that are the same as used for many e-business processes. We focus on electronic auctions and integrated logistics. Electronic auctions are virtual market places that implement freight exchanges offering carriers the perspective of easier access to loads and smoother operations. Tools, advisors, are needed, however, to identify which loads offered on the market are interesting and at what price, and to eventually combine them into profitable routes. These advisors are closely related to the AFMS developments of ITS. Electronic business is strongly related to logistics. The vast majority of business transactions are part of logistics activities. E-logistics aims to perform the traditional logistics goals (plan, manage, and control the efficient movement of goods, information, and money) within the “new” environment of partner integration and seamless electronic exchanges. The strong links to ITS are obvious, particularly for international intermodal freight (intermodal terminals and border crossings). The models and methods to analyze, plan and perform these operations fall within the scope of this theme. 2003-11-03 9