The logistics and transportation industry were the first to implement connected systems even before the “Internet of Things” term was coined. Early adoption has enabled these businesses to gain elevated results and thrive faster than other sectors. And today, IoT, blockchain, and the cloud play a significant role in logistics development. Nevertheless, the industry faces enormous challenges, such as demanding global requirements, increased shipments, and staff shortages. That’s why it is constantly searching for solutions to optimize processes regarding planning, load capacity, and effectiveness.
So, with its capabilities, the Internet of things is the key to the successful and rapid transformation of the logistics sector. IoT technology is extremely important in helping businesses overcome today’s challenges. It brings supply chain transparency, ease of decision-making, continuous communication, and other benefits. Furthermore, with the 5G network and the rising scope for e-commerce, the adoption rate of IoT solutions in the industry is increasing. IoT in transport is expected to develop more due to changing consumer behavior and increasing levels of urbanization in developing countries.
This article takes a closer look at the current state of the logistics industry, its problems that can be solved with IoT, and the multiple advantages of technology adoption. Read until the end to discover which solutions will transform the market in the coming years.
Connected ecosystems were implemented in the shipping industry long before IoT emerged. They consist of four major aspects, which help track the whole shipment process and ensure on-time delivery. Let’s discuss each of them below.
Continuous and real-time communication between truckers, delivery men, and other employees is critical in the shipping process. Today, drivers usually communicate via mobile phones. But sometimes, the connection quality is quite poor in remote locations, which may affect delivery speed.
One more aspect is real-time monitoring of the supply chain. These activities support the optimization of the entire process, from resource supply to shipment of the finished production.
The modern logistics industry is nothing without GPS gadgets. They not only track the specific location of vehicles on the way but help calculate the estimated delivery time.
Transportation has to deal with various IT security threats like other industrial segments. And the number of cyber-attacks and data breaches is on the rise. Hackers attempt to gain access to a network, corrupt data, or steal confidential information. Ultimately, it may affect not only businesses but also third-party organizations and end customers.
The logistics processes are fairly complex and multi-stage. They require close attention and constant enhancement. Moreover, there are a lot of factors that impact operations, such as weather conditions and the number of controlled assets. But the Internet of things technologies have become a game changer in industry development, giving companies various solutions to overcome current challenges and new issues.
Logistics industry present deals with different challenges, from timely delivery difficulties because of increased demand to data theft. Let’s consider some major problems preventing logistics industries from expanding and growing in recent years.
In case when businesses don’t transfer their shipping information for some reason, it must be handed over by a service provider. And it can cause records errors. Unqualified specialists also impact on quality of transferred reports. This all results in shipping data failures and delayed delivery.
Estimated delivery time is usually based on the recipient’s preferences and booked in advance. Therefore, any updates in a schedule may cause significant inconvenience, and the delivery window becomes inflexible. This is reflected in customer expectations regarding service quality. And ensuring seamless service is difficult, as the shipment process is complex, with many moving parts that must be coordinated.
Logistics companies are required to transport an increasing number of goods over long distances day by day. And at the same time, the price of fuel is constantly growing. This has resulted in businesses raising their tariffs to cover the high costs associated with long-distance transportation. Sometimes, transportation expenses could be as high as half of the cost of transported goods.
Security is a significant concern in any logistics process. First, this applies to the protection of the goods and products that are being transported. They can be damaged at many stages along the entire supply chain process. Moreover, products are vulnerable to theft by both companies’ employees and third parties. Cybersecurity is no less important. Hackers pose a threat to the IoT network as they try to gain access to sensitive data or disrupt supply chain management. To counter this, companies must invest in high-level data protection and other strong cyber security measures.
Although adopting IoT in logistics does not solve all the problems, it is improving and making the industry more efficient. The Internet of things brings various solutions for each stage of the entire shipment process, enhancing supply chains and meeting customer demands.
So, as mentioned above, the Internet of things brings transparency to the supply chain. IoT devices provide companies with multiple insights. Because of big data, the logistics business obtains valuable information, for example, what vendors perform better or how to optimize deliveries and major procedures.
Additionally, with supply chain management, transportation companies can cut down carbon dioxide emissions by making shipping smarter. IoT technology makes the transportation and logistics industry more nature-friendly, minimizing the environmental footprint. Data analysis, in turn, reduces the chance of damage or total loss of goods and minimizes waste. This is especially important for the perishable goods industry, like fruit and vegetable transportation.
The logistics industry, like any other, must adapt to new technologies and the latest global market tendencies to remain competitive. Investment in the Internet of things helps businesses to be more efficient and provide a better customer experience. For example, companies can use IoT solutions to review processes to ensure they are customer-centric and user-friendly. Also, with the help of IoT software, logistics managers can provide training to their employees to supply the best possible service to their customers in the future.
IoT solutions successfully cope with the considerable expense of logistics companies, which significantly impacts their bottom line. Measures such as predicting traffic conditions, shipment consolidation, and efficient coordination can cut costs. Data analysis helps businesses to save their financial resources by foreseeing vehicle movement and cutting down the number of empty cars on the road.
IoT technologies bring employee and product safety. For example, built-in sensors can track workers’ health indicators and identify potential hazards, reducing workplace injuries. In turn, solutions for real-time tracking notify drivers if they are not following safety standards, and real-time asset-tracking systems empower organizations to prevent theft. In addition, vehicle tracking ensures the safety of goods on the road.
In this block, you’ll learn about some use cases of implementing IoT technology using computer systems, environment sensors, and internet-connected smart containers. It’s time to analyze all advantages with specific examples.
A fleet monitoring system is one of the most commonly used IoT tools in the transportation sector. Thanks to embedded sensors, logistics managers can gather data about shipment vehicles’ condition and exact location, fuel consumption, or driver behavior. Therefore, specialists receive valuable insights which can be used for management strategy upgrades. In addition, tracking sensors can also transmit data like coolant level, tire pressure, cargo weight, temperature, and humidity within the truck. The last measurements, for example, are extremely important in transporting foods and medicines.
First, using a connected ecosystem, transportation and logistics companies can minimize the number of unexpected failures as maintenance becomes much easier and more effective. Stored data about drivers’ behavior, such as average vehicle speed and break time, helps to teach truckers how to drive more efficiently and use less fuel. And finally, with fleet management systems, companies can save money by reducing fleet downtime.
IoT in transportation isn’t limited by monitoring and management solutions. Technology is also a great assistant for logistic managers to identify bottlenecks that may result in asset breakdown. Companies, thus, jump on condition-based maintenance instead of depending on ineffective scheduled inspection procedures.
Machine learning allows searching for patterns of the logistics process and repetitive scenarios to predict issues. Then previous and real-time data is processed to identify possible future errors. In case of detection of malfunctions and probable breakdowns, the alert system notifies the user about the necessity of inspection or repair before defections become catastrophic. Predictive maintenance is a great way for fleet companies to reduce risks and downtime, resulting in seamless process execution, timely delivery operations, and cost efficiency.
According to statistics, more than 90% of all goods are transported by trucks at a minimum of one shipment stage. Therefore, the logistics industry requires systems that can help optimize traffic routes and manage cargo delivery. And IoT in logistics provides such solutions.
Location and route management systems are widespread in the transport sector. Such a GPS-based solution helps the logistics manager monitor trucks remotely. An application provides real-time data about driver activities, anomalies, traffic accidents, and other time-delaying barriers. These push notifications assist in the planning and management of delivery schedules. As a result, they may affect the shipment status and ensure timely delivery.
Inventory tracking and warehousing also play an essential role in the delivery rate. Implementing WMS or Warehouse Management System helps optimize warehouse storage space, locate packages in the most optimal place, and support seamless inventory organization. To manage products and warehouses, RFID tags are used. They provide warehouse managers with constant inventory monitoring along with items’ status and position. Thus, IoT sensors prevent losses, under- or overloading, and ensure safe storage. As a result, smart warehouses have reduced labor costs and increased efficiency due to fewer manual handling errors.
Autonomous driving is an IoT solution that ensures the safety of truck drivers and transported cargo. This is a real game-changer in logistics. It is based on such technologies as artificial intelligence and machine learning. Because of them, truckers can take passenger seats while cars will drive autonomously.
With self-driving vehicles, drivers’ workload is reduced, minimizing the risk of fatigue and preventing possible traffic accidents. But even with increased safety, we can’t discuss the complete exclusion of human input in the logistics process today. However, the right information at the right time is crucial to avoiding car accidents.
IoT in logistics is becoming more and more popular for several reasons. The Internet of things provides so many benefits and scalable cloud solutions, without which it is impossible to compete in the market today. Smart devices already supply companies with user-friendly communication networks, inventory management, drone-based delivery, improved resource allocation, and enhanced supply chain management. And this is just the beginning for IoT in logistics.
As for trends, uberization will dominate the logistics software market in the next few years. This is a mobile-based business model which allows users to easily get a wanted service via phones. Logistics uberization helps companies cope with high demands and offer advanced services. This cutting-edge software makes transportation more flexible.
The global market of connected logistics is already flourishing. And the use of IoT in the logistics industry today is developing at an unprecedented rate. Besides the fact that connected systems make transportation processes more efficient and cost-effective, they also enhance their existing rudimentary aspects.
But the Internet of things, along with dozens of benefits, brings unwanted attributes to the industry, such as security vulnerability. And it is critical to ensure IoT applications with high-level data protection to prevent theft and keep information safe.
Anyway, the forecast for IoT in logistics is optimistic. Reaching a new high-level service in the industry is inevitable. On a global scale, IoT-based solutions will continue to help to fight climate change and minimize the negative environmental impact of shipments. In addition, they will further strengthen cooperation between different sectors, increasing overall productivity.
