The Physical Internet proposes an efficient system in which global supply-chain logistics are enabled by an open, intermodal system.

Boxes_on_BeltThe Physical Internet – a concept in which goods are handled, stored and transported in a shared network of manufacturers, retailers and the transportation industry – would benefit the U.S. economy and significantly reduce greenhouse gas emissions, according to a new study by engineers at the University of Arkansas and Virginia Tech University. If 25 percent of the U.S. supply chain operated with such an interconnected system, profits for participating firms would increase by $100 billion, carbon dioxide emissions from road-based freight would decrease by at least 33 percent and consumers would pay less for goods.

“Our results indicate that the Physical Internet represents a virtuous cycle in which manufacturers, retailers and transportation providers all benefit in terms of increased profit margins and smaller environmental footprints,” said Russ Meller, professor of industrial engineering and director of the Center for Excellence in Logistics and Distribution. “The transportation network that is anticipated to emerge will also create better network design and customer service and will help address the problem of driver shortages and turnover.”

Currently, the transportation industry – with an economic value of trillions of dollars annually – is mostly a segmented enterprise with roughly three-fourths of manufacturers or retailers transporting their own goods without integrating or combining logistics with other carriers, manufacturers or retailers.

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Source: University of Arkansas | Phys.org