Looking back at the 5th Fraunhofer Alumni Summit “The Future of Logistics”

In line with the topic “The Future of Logistics”, the 5th Fraunhofer Alumni Summit was held at the Fraunhofer Institute for Material Flow and Logistics IML in Dortmund on November 5. For the first time, the Fraunhofer-Alumni e. V. hosted the summit as a hybrid event. The speakers were present on site, while spectators were able to stream the event digitally due to the current pandemic situation.

The Dortmund site was established in 1981 under the name “Fraunhofer Institute for Transport Technology and Goods Distribution ITW.” Today, more than 330 scientists and 250 doctoral candidates and students carry out their work and research there, with the support of still more colleagues in workshops, laboratories and service departments. Fraunhofer IML has given rise to developments ranging from electronics to sensors and new drive technologies, and from areas such as swarm robotics, artificial intelligence, image recognition and blockchain to standardization issues and open source. Many of these developments from the Dortmund-based institute are now on the market and are being put to positive uses.

“For the Fraunhofer-Gesellschaft, logistics is very important as a cross-sectional science,” explains Prof. Alexander Kurz, Executive Vice President of the Fraunhofer-Gesellschaft and Chair of the Executive Board of the Fraunhofer-Alumni e. V. “As one of the world’s leading logistical institutes, with research into areas such as artificial intelligence, deep learning blockchain and even materials and product sciences, Fraunhofer IML fits perfectly into the ‘expertise mix’ of the Fraunhofer-Gesellschaft,” continues Prof. Kurz.

“100 percent logistics”

“One-hundred percent logistics” is the claim made by Fraunhofer IML, according to Prof. Uwe Clausen, Institute Director of Fraunhofer IML. “Among other things, we deal with intralogistics, transportation, supply chain management and materials-cycle management, by land, water and air. We connect transport routes with innovative technologies,” Clausen concludes.

“The digitalization of everything and artificial intelligence in everything will change everything, including in logistics,” says Prof. Michael ten Hompel, Executive Director of Fraunhofer IML. He explains that the world is now divided into “digital and non-digital.” ten Hompel is convinced that, in an increasingly networked and digitalized world that is producing more and more data at an ever faster rate, logistics will continue to grow in importance. On the other hand, ten Hompel does not believe that individual players will be able to hold their ground in this new situation: “When it comes to data, it will be communities that strike gold.”

Researchers describe the interaction of technologies such as blockchain, digital ecosystems, humanoid robots and simulated and augmented realities collectively using the term “silicon economy.” Information is an essential part of this new economic system. Even today, intangible assets are already the most valuable items on the balance sheets of the world’s largest businesses. “Data is increasingly becoming a central asset. In the future, the logistics sector will be able to profit from what is known as information asymmetry,” ten Hompel predicts.

Platform economics, open innovation and silicon economy

This development is also an important element of platform economics, from which large digital platforms in the United States and China are drawing most of the benefits. European companies have a relatively small share of market capitalization in this area. “When it comes to digitalization, the playing field is increasingly being defined by AI, but also by open source,” ten Hompel emphasizes. Developer communities such as github, Pytorch or Tensorflow are predominantly influenced by the United States, for example. At the same time, however, ten Hompel believes that these types of community present opportunities for European initiatives, which can develop new business models more quickly on the basis of open platforms and interfaces.

There are many different developments underway simultaneously. Industrie 4.0, real-time-capable 5G networking, AI-based platforms, blockchain and other technologies are allowing products to negotiate with each other autonomously rather than needing to go through humans. The researchers’ vision is that, in the future, companies will buy and sell data, services and goods automatically via blockchain. Contracts will then be entered into by algorithms and not by humans.

For this to work, however, suitable standards and frameworks are needed to ensure data sovereignty. These could be established by initiatives like International Data Space or GAIA-X.

With the Rhenus level sensor ITCPRO (Intelligent Tracking Control Professional), Fraunhofer IML is showing how this kind of automated contract signing can work in practice today. The paper receptacles developed by Rhenus AG use a sensor developed by Fraunhofer IML to decide whether to order a truck to empty them. An invoice is then issued and paid automatically. “The receptacles are the administering authority in this example,” says ten Hompel.

Although a lot of money has been invested in this development, Rhenus AG will be making it generally available as an open source technology. “We aim to establish common standards through open interfaces. We are pursuing new forms of collaboration, because no business can implement the silicon economy on its own. That can only be done in a federal ecosystem of industry and science and on the basis of de facto standards and open source,” explains ten Hompel.

The founding of the Open Logistics Foundation, which Fraunhofer IML was involved in initiating, was a logical step toward achieving this. The purpose of this charitable foundation is to promote a European open source community for digitalization in logistics and supply chain management and to establish de facto standards for logistical processes. ten Hompel summarizes it as follows: “Let’s work together to find solutions. There are major challenges facing us, and it’s time to come together.”

The Port of Hamburg’s status as a gateway to the future is in no small part thanks to the Fraunhofer-Gesellschaft and its work on a joint project that has developed, among other things, an image recognition system to monitor the status of containers.

The Port of Hamburg, gateway to the future

Another example of the interplay between science and industry is described by Angela Titzrath, CEO of Hamburger Hafen und Logistik AG (HHLA), in her keynote COOKIE. This joint project by HHLA and the Fraunhofer Center for Maritime Logistics and Services CML aims to optimize processes in an empty container yard. Container availability forecasts, cleaning process optimization and automated damage identification and evaluation are all done by artificial intelligence. In addition to this, the Port of Hamburg has worked with Fraunhofer to simulate what traffic flows through the port could look like in the future. They also had joint success in proving that empty containers can be transported with drones. However, Angela Titzrath notes that they still emit too much noise to be suitable for practical use.

The HHLA subsidiary Sky has developed a control station that can manage 100 drones in different locations simultaneously. Drones use artificial intelligence to check the condition of container cranes. They can identify the finest of hairline fractures in the colossal steel structures on the quay wall.

Digitalizing a 130-year-old start-up

The above projects are just some examples of the development and digitalization of the Port of Hamburg. “We are a start-up that launched 136 years ago in Hamburg’s warehouse district,” says Angela Titzrath, summarizing the focus of this leading European logistics group. The historic warehouse district, which today is a World Heritage site, revolutionized logistics by efficiently bringing the storage and handling of goods together in one place. Twenty years ago, Container Terminal Altenwerder became the first extensively automated container handling facility, and today it is the world’s first and only certified CO₂-neutral terminal, a feat achieved in part through consistent electrification and a strong railway connection.

HHLA is continuing to invest in the digitalization and automation of processes. Examples include projects for autonomous trucks, automated train stations or even goods transport using Hyperloop high-speed trains, on which HHLA has been working since 2018 as part of a joint venture with HyperloopTT. The internationally seasoned economist and philologist summarizes the partnership between HHLA and Fraunhofer as follows: “Our country’s most important raw material is a spirit of innovation, and it is important to make use of that raw material and develop it, including at the industrial level.”

Resilience in logistics

Nothing gets shipped from China if its factories or ports are closed for weeks. For a long time, material bottlenecks seemed unthinkable in a society characterized by abundance, but supply bottlenecks such as those seen at the start of the pandemic with personal protective equipment and masks, for example, have made it clear how networked today’s economy is. This is what has brought the importance of logistics into sharper focus, explains Angela Titzrath. “We’ve been paying particular attention to resilience in recent months. Even in these exceptional conditions, we have not had a single COVID-related stoppage,” Angela Titzrath emphasizes. It is not just the coronavirus pandemic that has led to changes in the framework for logistics, she continues. For a number of years, the exchange of data and services has been growing faster than trade in goods. “This means fewer containers and a greater international exchange of knowledge, information and data,” says Titzrath in summary. For a business like HHLA, this prompts the question: “What will this give rise to in addition to containers? What system, what digital solutions will be established?”

In the podium discussion, Erich Malitzke, CEO of DPD Germany, also makes it clear that his business is facing new challenges. “In the past few months, it has become clear to trading businesses and manufacturers alike that the supply chain is a huge part of succeeding on the market. For that reason, many players, including us at DPD, are thinking about demand networks so we can consider resilience differently from the way we would view it in a linear supply chain.”