The Challenge

The growth of e-commerce and the increased expectation on the part of consumers to receive their purchases within hours of ordering has placed considerable pressure on the logistics industry to make more efficient deliveries within cities and expand their operations to rural areas. On the other hand, municipalities are concerned about the impacts caused by an increased volume of parcel deliveries by express couriers. They are looking for sustainable solutions to reduce traffic, congestion, and pollution within urban centres.

Collaborative micro-hubs (CMH) is a new logistical concept based on advanced game theory methodologies. Accordingly, a group of logistics companies (express and freight forwarders) collaborate among themselves by sharing means and resources for delivering parcels in a network of common logistic centres set up in strategic areas of urban centres. The main incentives for a logistics company to operate in CMHs is to reduce operating costs, improve the quality of service and cover a wider geographical area without significant initial investments and risks.

The optimization of logistic operations through collaborative processes also benefits the populations of the areas covered by promoting the reduction of urban traffic, improving air quality, and reducing the number of road accidents, therefore improving the quality of life in general.

Despite the evidence of advantages (commercial and environmental) recognized by collaborative micro-hubs, their implementation is a complex challenge in terms of business technology, whose success is based on the ability to implement credible solutions for different transport operators in the exchange of information and execution of operations shared with each other. Smart contracts (blockchain technology), by their nature, are chosen as essential elements to support the adherence of operators to the platform.

The Solution

This project aims to develop a practical solution by applying blockchain technology (distributed ledger technologies) to solve the collaboration and trust issues, which are at the base of the implementation limitation of collaborative micro-hubs.

This project’s scope in the i4Trust initiative is to provide a reliable data-sharing framework with trustworthy access control to that data. CollMi also respects its sovereignty by making sure that each retailer only has access to the package information of their orders or their client’s orders. Additionally, each logistics operator receives information relevant to their operation – concerning their orders or those they were subcontracted to deliver or to do part of such delivery.

Business projections – scalability

KPls at the end of the experiment:

• Number of packages processed by the micro-hub: 140 (expected to grow 250% one year after)
• Number of consumers served by the micro-hub: 100 (expected to grow 300% one year after)
• Number of retailers participating in the micro-hub: 1 (expected to grow 1000% one year after)