How IoT in Logistics Changes the World

IoT in logistics is a win-win trend. Companies get full control of goods and fleet, while customers get lower prices.

Mankind has lived through several industrial revolutions. From the steam engines and the telegraph to the rise of electronics, science has made tremendous progress over the span of just a few centuries.

The advent of the Internet brought about the fourth industrial revolution, which has dramatically transformed our economies and everyday lives. It all started with computers and continued with smartphones. Now, almost any physical object can be connected to the global network to receive and transmit data. This technology is known as the Internet of Things or IoT.

While every industry can take advantage of IoT, its benefits are particularly tangible in the fields of logistics and transportation. Read on to learn what gains IoT can bring to both delivery companies and their customers.

IoT: Invisible Threads Connecting Everything

First, let’s dive into some technical aspects so that you know exactly what is IoT and what underlying technologies it employs.

IoT Defined

There’s nothing fancy about the concept of the Internet of Things. It simply implies all devices connected to the Internet and capable of receiving or transmitting data to a centralized platform or to another object within the IoT network. What’s particularly valuable is that all these objects do their jobs without human intervention.

The first person who used the term “Internet of Things” was Kevin Ashton in 1999. However, it was not until around ten years later that the term was universally adopted.

Along with IoT, other words were initially used to describe various objects that could send and receive data over a network. For example, “blogjects” or “ubicomp”. In the end, it was IoT that celebrated the victory.

Can we call every Internet-connected data-receiving or data-sending object an IoT device? No. An IoT device is something that normally has no access to the Internet, such as a hair dryer or microwave oven. For that reason, laptops, tablets, smartphones, or PCs don’t belong to the IoT cast.

What makes IoT devices really powerful is not their functionality but their connection to an IoT platform, where they can send and obtain data or perform power-intensive calculations.

Categories of IoT Devices

We can divide IoT devices into three broad categories:

1. Those that monitor an environment and send data to a remote source. It’s all kinds of sensors, starting from air quality monitoring sensors and ending with temperature sensors.
2. Those that receive data and do something with it. Example: an IoT-powered bulb that automatically turns on when someone walks past the lamp post.
3. Those that serve both as data transmitters and data receptors. These are IoT devices capable of evaluating data they obtain and performing appropriate actions based on it. Example: a self-driving car that changes its route once it learns about a traffic jam ahead over the Internet.

It’s the last category that makes IoT especially desirable for businesses and individual consumers, giving them almost unlimited possibilities.

Technologies Behind IoT

Several important innovations have contributed to the development of the IoT industry.

1. Connectivity technologies. There’s a bunch of options for various IoT devices to connect and exchange data with one another:
   Bluetooth Low Energy, Wi-fi, LTE, Ethernet and Satellite.
2. 5G Networks. This high-speed mobile network makes it possible to use a huge number of IoT devices within a limited space (up to one million to a square kilometer).
3. RFID (Radio Frequency Identification) tags. These are chips attached to various objects like machinery. They consume little energy and require no wires to transmit data.
4. IPv6. Using this Internet protocol, we can obtain an almost unlimited number of IP addresses for each and every IoT device on the planet.
5. AI. Artificial Intelligence technology is capable of “digesting” huge volumes of data that IoT devices collect and transmit. After processing this information, AI systems can make predictions regarding various industrial processes.

Popularity of IoT

Experts predict a huge growth of IoT. IDC forecasts the global spending on the Internet of Things to equal $745 billion in 2019. According to Statista, the worldwide expenditures for the Internet of Things will reach the 1 trillion dollars mark in 2022.
Many industries have introduced IoT into their business processes including the following:

• Defense
• Agriculture
• Healthcare
• Retail
• Oil, gas, and mining
• Infrastructure
• Hospitality.

One of the sectors where the Internet of Things is also widely used is logistics. Let’s review the main applications of this technology in the logistics industry and discuss the benefits it provides for delivery companies and their customers.

IoT in Logistics

The logistics industry is the economy’s locomotive. Manufacturers need their products to be delivered at the optimal price, at the exact time, and in the necessary quantity and condition.

A logistics company will most certainly fail if…

• it can’t manage its inventory efficiently
• its warehouse is a mess
• its internal processes are not automated
• it can’t deliver goods fast enough
• it can’t ensure that goods will be delivered to customers safely and their quality will be perfect.

The Internet of Things addresses all of those challenges, bringing the logistics up to a completely new level. Here are the main benefits of IoT for delivery firms.

1. More Efficient Management of Vehicles
   Different logistics companies have variously-sized fleets of delivery trucks. Even with a small number of cars, though, it’s often hard to track their location and condition on the road. IoT simplifies and streamlines this process:
   • It uses GPS or similar location-detection technologies to collect data about the exact place and maneuvers of a vehicle as it’s moving from point 1 to point 2.
   • It automatically sends a push notification to a manager once a vehicle arrives at the destination. This helps the manager plan deliveries more accurately and promptly.
   • It enables trucks to exchange information about their locations in real time. Thus, they can move in groups, adjusting their speed and keeping the optimal distance between themselves.
     As such, more road space is available to other vehicles. It also reduces the amount of exhaust gases and contributes to more efficient fuel consumption. Business Insider predicts that 98% of all new cars will have an Internet connection by 2020.
   • IoT devices installed inside vehicles notify technicians of any problems with the engine or other parts even before those occur. Thus, managers can immediately react to all kinds of issues to avoid or significantly reduce downtimes.
2. Better Inventory and Warehouse Administration
   Efficient warehouse and inventory management is of paramount importance to any logistics company. The number of goods could be huge. Tracking them manually is prone to numerous errors that may cost too much in the end.IoT has made the life of warehouse administrators much easier. By attaching minute, cheap sensors to the stored items, managers can monitor the availability of goods and quickly find them.Information about the stock is sent to the cloud. Managers can retrieve it at any given moment wherever they are and use it for accurate planning. As a result, there’s no shortage of popular goods, while losing items is almost excluded.
3. Better Quality of Delivered Products
   IoT devices can also ensure that the conditions inside vehicles that transport delicate or perishable products such as fruit, vegetables, or flowers are optimal throughout the route. That reduces the amount of wastage and contributes to higher customer satisfaction.
4. Property Theft Prevention
   Stealing freight is not a rare occurrence in the United States. According to a report from Statista, in 2017 U.S. transport companies lost cargo worth almost $2.6 million due to theft. IoT can effectively prevent stealing property. One example: the SmarSensor solution from DHL. It can detect any temperature fluctuations, changes in the light intensity, or register any abnormal events during a trip. That helps managers immediately react to the alarm and avoid the loss of goods.
   It’s also good from the insurance perspective. Thanks to IoT, logistics companies can exactly identify the time and location of the theft. That simplifies recovering costs through insurance policies.

Benefits of IoT for Consumers

The new technology is advantageous not only for logistics companies themselves. It also contributes to higher customer satisfaction.

Real-Time Tracking

Customers can follow the entire path of their goods from the warehouse to the final destination. They can do it via one of the numerous tracking apps such as this to know when to expect their goods precisely.

Reduced Costs

IoT devices enable drivers of delivery vehicles to find the best routes. The data about the traffic situation, road condition, and relief is stored in the cloud and can be used by all other vehicles moving in the same direction. That contributes to lower fuel consumption. Customers pay less than they did before.

No Lost Merchandise

Thanks to the sensors that control the temperature, light, and humidity inside delivery trucks, customers get all their merchandise without wastage.

Real World Examples of IoT Usage in Logistics

A huge number of shipping companies have already believed in the advantages of IoT for their businesses. Here are a couple of examples to illustrate this.

Maersk

The company from Scandinavia is one of the largest shippers on the planet. Around 7 years ago Maersk struck a partnership with Ericsson for the installation of satellite and mobile equipment to track the gigantic fleet of its containers on the move.

Ericsson’s devices send data about all parameters (current position, temperature, humidity, etc.) to the servers, where it’s analyzed by managers.

DHL

In 2018, the largest logistics and mail company on Earth introduced the IoT-based solution SmarTrucking to its business processes. The sensors installed inside DHL’s trucks now allow managers to determine the best routes and track deliveries in real time. Since then, transit times have decreased by half, while the movement of goods can be tracked with nearly 100% precision.

Conclusion

The future of the logistics industry belongs to IoT. Companies can track the movement of goods in real time, predict problems with vehicles, prevent property theft, and reduce fuel consumption. The customers’ main benefit is a lower price they have to pay for the shipment of their goods. So, if you’re still doing your business the old-fashioned way, it’s time to try out the new technology.

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