CO 2 reduction in logistics: How AI and augmented reality make the transport of goods more efficient
The goods transport sector is one of the largest CO 2 emitters worldwide. Companies and politicians are finding it difficult to take effective measures to make this sector more environmentally friendly. Thanks to intelligent digitalization and the latest technology, enormous potential for CO 2 reduction and cost savings can be leveraged immediately and without expensive investments.The start-up Alpha Augmented Services from Switzerland has developed a software solution that uses AI and augmented reality to make the movement of goods less CO 2 . The packaging and shipping process is optimized to avoid empty space in air freight and ship areas. In fact, more than 30 percent of air is often shipped in these areas because existing transport volumes are not optimally utilized. We’re talking about these topics today with Massimo Rossetti, CEO & co-founder of Alpha Augmented Services.
Mr. Rossetti, you have founded a company that can reduce costs and, not least, CO 2 emissions in logistics and transport by around 20 percent through intelligent digitalization. This is a software solution that can optimize the movement of goods. First, explain how this idea came about?
I know all areas of the logistics industry very well from my 20 years of experience. Then a few years ago the completely correct discussion began about sustainability, decarbonization of the global economy and resource conservation. At the same time, I experienced that the logistics industry was not using enormous potential in the area of capacity optimization when looking for solutions. With an expert team of like-minded people and high-profile investors from the industry, we decided to change that. We developed a software solution based on artificial intelligence and brought it to market. Large, globally active companies are currently using our software, which realizes potential savings in costs and the CO 2 footprint across the entire transport chain of goods.
How can digitalization and use of the latest technology in the goods transport sector help to reduce CO2 emissions
Our software identifies and eliminates inefficiencies throughout the supply chain. Almost 90 percent of all shipments are currently not optimally packaged. Material is wasted and “packaged air” is sent. And here we work on the entire delivery and order chain to optimize the ordering process for products. To do this, we analyze the upcoming orders and bundle them with other product groups. We also take a close look at the product and shipping packaging and avoid empty space on pallets or in containers. Last but not least, we also optimize product packaging and packaging processes. We identify the ideal packaging and packaging materials. Efficiency increases through the utilization of the available space. This reduces, on the one hand, transport costs and, on the other hand, the CO 2 footprint in the entire transport chain.
The logistics industry is looking for solutions to reduce CO 2 emissions
What do you estimate is the share of the global goods transport sector in CO 2 emissions?
More than 22 percent of global CO 2 emissions are caused in supply chains. World trade and thus the global transport of goods will continue to increase. At the same time, the logistics industry is desperately looking for efficient solutions to reduce CO 2 emissions quickly, cheaply and sustainably. This is where our approach comes in at just the right time. We must not only rely on emission-free vehicle drives and fuels, but we must now make optimal use of the existing capacities. This means we are already a whole step further in the decarbonization of the goods transport sector.
How does the ALPHA Augmented Services solution work?
It is a pure software solution that is integrated into the ordering and transport process. The whole thing is a SaaS solution that can be implemented without high initial investments for the customer. The customer sends us his data with every order and receives from us very quickly, very detailed and immediately implementable suggestions for the optimal processing of the orders and transports. This is an ongoing process. This runs silently in the background and optimizes the existing processes and flow of goods. No special technology is required for companies and suppliers
How high are the possible savings as a result?
The savings are a good 20 percent of CO 2 emissions. It is very important to me that there is a real and immediate reduction in CO 2 emissions and not just compensation through the financing of other projects, as is often the case. The cost reduction is of a similar magnitude. The good 20 percent there is made up of reduced shipping and handling costs and a reduction in the use of materials. This harmony of CO 2 and cost reduction is of course excellent for the acceptance of the solution, because CO 2 reduction normally costs money. In our case it saves money.
How many shipping simulations does ALPHA Augmented Services use to eliminate inefficiencies in the movement of goods?
This depends entirely on the product in question and the complexity of the supply chain. To give you a number: 19,000 calculations for one shipment of goods is not unusual. Assuming 17,000 air freight shipments from a single company in Southeast Asia, the calculations add up to several hundred million per year. If the overall situation becomes more complex due to more operating locations and many business rules, we will then have an exponential growth in simulations. This is not a problem for us, but it also shows that this cannot be done with an Excel sheet.
How exactly does the solution from ALPHA Augmented Services help to avoid empty space in air freight and shipping?
First, we recognize the empty space and literally make it visible. This helps to improve the configuration of goods and shipping. We respond to different types of pallets and containers with an optimized composition. In short, we manage to get more goods onto the pallet or into the container. To achieve this, we also optimize the order process. We combine orders or split them to determine the best possible order size based on pattern recognition and shipping costs. But the actual product packaging also offers significant savings potential.
Take action against “packaged air”.
I recently ordered a shoehorn privately. When I saw the postman I thought he was bringing a TV. ALPHA Augmented Services also works with the term “packaged air,” and I got plenty of it in this package. How could shipping be optimized using this small example?
The example shows very clearly what still needs to be optimized. What you have experienced is the inefficiency in packaging. Even the right packaging solution provides plenty of scope for optimizing product packaging and packaging processes. Often there is no need for extra packaging because the device is already well packaged. A lot can be gained with ideal packaging and the right packaging materials that are tailored to the contents. We also optimize this part of the process chain with our solution.
How long does it usually take for investments in the movement of goods to have an impact?
There is currently discussion about making the transport of goods by ships, planes and trucks CO 2 neutral using alternative types of drive and fuels such as hydrogen or batteries . This will take a very long time, probably decades, and will cost billions to develop and build new infrastructure. But we have to act now to release less CO 2 . And this requires optimization solutions that quickly achieve an effect. Our solution has almost zero investment costs with an immediately measurable and verifiable effect.
Why do companies and politicians find it difficult to take measures in the area of goods transport?
Companies in particular are not having a hard time. They are all almost desperately looking for efficient and cost-effective solutions. In this respect, there is demand and willingness. However, the introduction of a comprehensive innovation takes a certain amount of time, especially for large corporations. I understand that, but I would wish if decision-making processes were even quicker.
What helps is the regulatory pressure to make CO 2 emissions transparent and to increase the corresponding savings potential. This also brings the transport of goods into the awareness of companies, which have to give an account of their supply chains in their sustainability reports.
What measures would you like to see?
Anything that can be done quickly and costs little to actually reduce CO2 emissions and not just compensate for them is good. We can achieve so much when we optimize. The combination of digitalization and sustainability offers an enormous opportunity to do a lot in terms of environmental protection. The use of artificial intelligence can become a game changer at the interface between digitalization and CO2 avoidance.
Thank you for the interview!
