DHL Trend Report: Implementation of digital twins to significantly improve logistics operations

Falling costs of key technologies opening the door for widespread adoption
Variety of applications for digital twins in logistics
DHL invites its customers and partners to jointly explore full potential of digital twins

DHL has released a new Trend Report on "Digital Twins in Logistics" at the inaugural Internet of Things (IoT) Day, at DHL's Innovation Center in Germany. The report explains the concept and rise of digital twins as well as how it creates value. The technology, which involves using digital models to better understand and manage physical assets is already well established in some industries and has the potential to significantly change logistics operations.

A digital twin is a unique, virtual representation of a physical thing that monitors and simulates both the physical state and behavior of the thing. The digital copy is continually connected to the physical object(s) and updates itself to reflect real-world changes. Applied to products, machines and even entire business ecosystems, digital twins can reveal insights from the past, optimize the present and even predict future performance.

"The market for digital twins is expected to grow more than 38 percent each year, passing the $26 billion mark by 2025," explains Matthias Heutger, Senior Vice President, Global Head of Innovation & Commercial Development at DHL. "Digital twins offer unparalleled capabilities to track, monitor, and diagnose assets. They will change traditional supply chains, with a range of options to facilitate data-driven decision making and collaboration, streamlined business processes, and new business models. We are keen to work with our customers and partners to jointly explore applications in our industry."

Logistics applications of digital twins

In logistics digital twins could be used in a variety of applications along the entire value chain, including the management of container fleets, monitoring of shipments or the design of logistics systems. IoT sensors on individual containers for example, show their location and monitor for damage or contamination. This data flows into a digital twin of the container network, which uses machine learning to ensure that containers are being deployed as efficiently as possible. Digital twins can be applied not only for individual assets but entire networks and ecosystems such as warehouses, combining a 3D model of a facility with inventory and operational data. The system would be able to provide an overview of the state of machines and product availability and could make predictions and autonomous decisions about stock or deliveries. The same principle applies to major logistics hubs or global logistics networks.

Markus Kückelhaus, Vice President, Innovation and Trend Research, DHL Customer Solutions & Innovation, adds: "Powered by IoT, cloud computing, artificial intelligence and advanced visualization tools, digital twins are becoming a more attractive and accessible option for companies. However, bringing these and other relevant technologies together into a full digital twin implementation is a complex and challenging task. Close collaboration between all partners along the value chain is therefore essential to fully capture the potential."

In the Trend Report, DHL examines the challenges to implementation, such as cyber security concerns, but stresses that business cases for implementing digital things are becoming more compelling. As related technologies get to be more dependable and affordable, businesses in a number of industries will find digital twins invaluable in managing complex systems of assets in real time and increasing efficiency in their processes. The report concludes by considering the investments and changes necessary for the successful implementation of digital twins in logistics.

The Trend Report: "Digital Twins in Logistics - A DHL perspective on the impact of digital twins on logistics" is available for free download at logistics.dhl/digitaltwins


DHL Global Trade Barometer: World trade momentum weaker but growing

Indices for all seven countries indicate further growth
Pace slows down in all index countries - particularly in Asia
India continues to grow most dynamically; weakest trade growth in the UK
Tim Scharwath, CEO DHL Global Forwarding, Freight: "The DHL Global Trade Barometer shows that global trade continues growth, but at a slower pace"
Bonn, New York - Global trade will continue to grow over the next three months. This is the conclusion of the latest DHL Global Trade Barometer (GTB). With an overall index of 61 points, the GTB's analysis of international air and containerized ocean trade flows indicates that the development of the previous quarters will continue: Indices for all seven countries that constitute the GTB index are above 50 points, which corresponds to a positive growth forecast according to the underlying methodology. The pace of growth, however, is further slowing in all index countries. This deceleration will be particularly strong in Asia (except for China): Index values for India, Japan and South Korea have dropped by eight, six and five points respectively compared to the previous release of the GTB in September. With an overall index of 75 points, India, however, continues to be the country with the strongest trade growth forecast.
"The DHL Global Trade Barometer clearly shows that the state of global trade remains solid. Both, air and ocean trade, continue to grow around the world. However, given the smoldering trade conflicts, especially between the US and China, and economists' expectations that the global economy could cool down, it is not entirely surprising that trade momentum has weakened slightly", said Tim Scharwath, CEO of DHL Global Forwarding, Freight.

Trade growth in the US (61 points) and China (58 points) remains solid. Both countries' momentum of growth is slowing only moderately by two and one points, respectively - even though both countries would have much to lose if their trade conflict escalated.
With a two-point decline and an index value of 56 points, Germany's loss of trade growth momentum turns out to be moderate, too, compared to September. While the UK was able to keep its GTB index unchanged in the previous release, its growth forecast has now deteriorated noticeably by four points. This makes it the index country with the weakest growth forecast: With 53 points, the UK is only slightly above the 50-point mark, which indicates stagnation in trade growth.

The worldwide deceleration of trade growth is attributable to declines in both containerized ocean freight and international air trade - with last year being a peak year with exceptionally high volumes. South Korea is the only country whose growth forecast for ocean trade remains unchanged. In all the other countries, the outlook for ocean trade is declining. Furthermore, the air trade outlook is going down in every index country. With an eye to individual sector developments, Industrial Raw Materials contributed most to international trade growth, followed by Machine Parts and Basic Raw Materials. The weakest growing categories were Consumer & Household Goods, Capital Equipment and Machinery Parts.

Launched in January 2018, the DHL Global Trade Barometer is an innovative and unique early indicator for the current state and future development of global trade. It is based on large amounts of logistics data that are evaluated with the help of artificial intelligence. The indicator has been developed in cooperation between DHL, the world's leading logistics company, and IT service provider Accenture. It is published four times a year. The next release date is scheduled for March 27, 2019.



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