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The Dawn of the Distribution Revolution

By Hendrik Kleinsmiede, Director of Innovation • Visa Europe

April 19, 2016

One theme common to the digital and tech conference circuit over the last few years can be loosely termed “the Distribution Revolution”. What does this signal? Nothing short of a reinvention of logistics.

It is driven (if you’ll pardon the terrible pun) by three high-profile technologies:

  • Drones
  • Driverless cars
  • 3D printers

Two years ago, drones hovered in the massive hangars of the Le Web conference in Paris. Since then, on the conference circuit at least, drones have mostly been “caged” in transparent perspex cages (to the chagrin of enthusiasts and the relief of Health & Safety officers everywhere). Drones are posed to disrupt the traditional lines of logistics by providing a direct rooftop-to-rooftop (or garden) delivery service. Imagine ordering an item on clothing at Amazon and having it delivered directly into your back yard by “Amazon Prime Air”, the future distribution service Amazon have very publicly envisioned.

“Driverless cars” are the second string to the “distribution revolution”. The characteristic bubble-shaped self-driving Google cars are a regular feature of the Silicone Valley thoroughfares and trade shows and have been joined more recently by models created by rival car manufacturers from Nissan to Tesla. The revolutionary thing about these vehicles is not just that they are autonomous (though that in itself is a remarkable feat of engineering). Their real potential lies in their efficiency and their potential to herald a new type of economy — a leasing (rather than ownership) based capitalism.

Currently, most cars spend less than 2% of their time on the roads — our urban centres are cluttered with parked cars and our roads gridlocked with vehicles (many occupied by a single person). The self-driving car will literally manoeuvre itself from one fare to the next, staying on the road north of 90% of the time. It could even anticipate its own repairs, proactively ordering and having parts replaced before they become faulty. The end result? A massively reduced number of stationary vehicles (whether parked, broken down or in gridlock),and unblocked roads. At least in theory!

The third — and arguably most revolutionary — element of “the distribution revolution” is 3D printing. Now, rather than having to evoke logistics — physically moving goods from A to B — we simply create the goods in situ. Soon there will be no need for the paraphernalia of transportation — roads; trucks; refineries. All you will need is a simple 3D printer. Already these printers are becoming increasingly more sophisticated, using sturdier carbon metallic to print away from plastic. In some cases it’s even becoming possible to print proteins – 3D printed food!

Will these three innovations challenge legacy logistics in a meaningful way? Can we imagine a future where the sky is buzzing with drones; driverless cars zip around, delivering people and packages to their destinations; and a myriad of 3D printers print everything from machine parts to meat? Very likely we can. The “distribution revolution” is underway…

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