Smart Logistics and Freight Villages Initiative

P3 Well-connected region

3.1. Improved transport flows of people and goods

Central Baltic

01.09.2016 - 31.05.2020

€2 191 918

€1 700 304

Project Summary:

The management of manufacturing, supply chain, logistics, and transportation industries are facing a substantial change, as new technologies are constantly developed. The change will affect how logistics providers of all sizes operate. Transportation cost and delivery time are critical aspects for most manufacturers as well as using technology to make transportation more efficient to help reduce overall costs and delivery time. Hence it is crucial for transportation management services, warehouse management systems, and other aspects of logistics to take Internet of Things (IoT) systems on board.
The project develops and tests IoT-solution within the logistics sector and logistic companies across the two corridors; ScanMed and North Sea-Baltic. The new solution will optimise all aspects of their integrated services (transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding) by creating a blockchain ledger for sharing the cargo transport status and location information across the transport corridors and giving companies access to vast amounts of anonymized data outside an organization.

This results on decreased operational costs of the companies as well as reduced time of delivery of goods.

Lead Partner

Kouvola Innovation

Country: FI

Partner budget: 1.353.067 EUR

Amount of ERDF funding: 1.014.800 EUR ERDF

Project Partners

Region Örebro län

Country: SE

Partner budget: 275.200 EUR

Amount of ERDF funding: 206.400 EUR ERDF

Transporta un sakaru institūts

Country: LV

Partner budget: 34.500 EUR

Amount of ERDF funding: 29.325 EUR ERDF

Valgamaa Arenguagentuur

Country: EE

Partner budget: 110.100 EUR

Amount of ERDF funding: 93.585 EUR ERDF

Sensei OÜ

Country: EE

Partner budget: 92.366 EUR

Amount of ERDF funding: 78.511 EUR ERDF

Logistika õppetool, Mehaanika ja tööstustehnika instituut, Tallinna Tehnikaülikool

Country: EE

Partner budget: 326.685 EUR

Amount of ERDF funding: 277.682 EUR ERDF

Expected results

The World Bank’s LPI 2018 ranks 160 countries on six dimensions of trade, which are recognized as important to development. The data in the ranking comes from a survey of logistics professionals who are interviewed about the foreign countries in which they operate. The components analyzed in the LPI are chosen based on recent theoretical and empirical research and on the practical experience of logistics professionals involved in international freight forwarding. The six dimensions are the Customs, Infrastructure, Ease of arranging shipments, Quality of logistics services, Tracking and tracing, and the Timeliness. The LPI uses statistical techniques to aggregate the data into a single indicator that is used for cross-country comparisons.
We will use the LPI framework to conduct a baseline survey. The targeted ScanMed- and NorthSea-Baltic corridors performance index is calculated from these indices. Another survey is conducted at a later stage in order to determine the effect of the project activities. Simultaneously, blockchain-based data is used to monitor the project activities effect from the baseline during pilot company participation. Corridors cannot be accurately measured because of the bottlenecks inherent within the structure of the corridors, i.e. train and ship timetables. Individual processes started after each transport order within the corridors can be enhanced, leading to improvements in the use of timetables.
We can simulate the blockhain data test results and extrapolate statistically valid models on how the change potential would be achieved in the near future, based on the measurements, analysis and experiences from the pilot companies.
Based on the understanding on the blockchain technology potential and the industry processes, and with the LPI 2018 indices, we project an 5% to 20% reduction in lead times in the corridors. The results will reflect the most accurate calulated lead time reduction achieved via the distributed network model.