Potential of the Physical Internet (CSA)

Ongoing research efforts show that the translation of the working principles of the Digital Internet to the routing of freight, thus creating the Physical Internet (PI), has the potential to be a real game-changer. In the PI world freight travels from hub to hub in an open network rather than from origin to destination directly. Each parcel is routed automatically and at each section it is bundled for efficiency. In the PI network of networks many (if not all) transport and logistics services would be accessible on demand to all users.

This will however require the successful integration of many innovative concepts and non-the-least the mental-shift to adopt a very different governance structure. The Internet of Things for example, which could link every future container, load unit or parcel to the internet, can be considered a pre-requisite for the Physical Internet to work as there will be an increased need to track all goods in a freight environment lacking a fixed and known transport route. The main challenge is to model a future Physical Internet network topology and assess the benefits it could generate in terms of carbon footprint, throughput times and cost reductions. Additionally the concept of the Physical Internet, already identified by ALICE[1], needs to be detailed into a strategic and operational vision which has the capability to get industry-wide endorsement of all stakeholders.

Scope

This topic will be implemented through two types of actions:

1) Research and Innovation Actions. Proposals should cover all the following issues:

• Set up a case study to identify the position, size and number of hubs needed for efficiently linking the long distance network and providing sufficient access points to urban areas.
• Map the influence sphere of each node and its benefits across borders to fuel future shared investments.
• Develop simulation and modelling tools to assess the possible impact of the PI, including the socio-economic aspects.

2) Coordination and Support Actions. Proposals should cover all the following issues:

• Develop a roadmap towards the Physical Internet (milestones, first implementation opportunities, etc.) defining which changes are required for migrating to a PI and how these could take place (e.g. current vs future logistic practices, IT applications and enabling technologies, business models, mental shift, integration of SMEs, customer behaviour, etc.).
• Monitor logistics and freight transport initiatives and research projects from relevant European programmes (H2020, TEN-T, etc.), and their impacts and contributions to Physical Internet. Fostering the links between ALICE and other transport and manufacturing focused ETPs with the aim to identify barriers and opportunities for the deployment of research results and improvement of framework conditions.
• Create support and consensus between public bodies, research and industry stakeholders on opportunities, barriers and next steps towards a PI. Organise workshops to present and discuss results, trends, exchange experience and foster innovation aspects
• Explore the need for legislative initiatives by authorities, including a legal contractual framework for participants to the Physical Internet.

The Commission considers that proposals requesting a contribution from the EU of between EUR 2 to 3 million each for Research and Innovation Actions, and between EUR 0.5 to 1 million for Coordination and Support Actions would allow this specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Expected Impact

To achieve the benefits resulting from the paradigm change proposed by the Physical Internet, actions are expected to demonstrate how the following aspects can be achieved:

• Kick-Start the development of the Physical Internet through building industry-wide support.
• Improved asset utilisation.
• 30% reduction in terms of congestion, emissions and energy consumption.

Delegation Exception Footnote:

The Coordination and Support Actions of this activity, directly aimed at supporting the development and implementation of evidence base for R&I policies and supporting various groups of stakeholders, are excluded from the delegation to the Innovation and Networks Executive Agency (INEA) and will be implemented by the Commission services.

[1]Alliance for Logistics Innovation through Collaboration in Europe