Internet of Things (IoT) is not just a buzzword today. There are multiple sectors that are undergoing rapid transformations with the adoption of IoT. As per a study conducted by AT Kearney, IoT’s impact on the transportation and logistics sector is set to touch the mark of $18 billion by 2025. Today, IoT is already expanding the way these firms function—cutting costs, increasing efficiency, and creating new revenue possibilities. Its biggest use case can be seen in sensor technologies like smart sensors that include location-based (such as GPS) and fuel sensors, radio frequency identification chips (RFID), and cloud-based GPS-enabled trackers. These enable real-time ambient data collection, collaborative information sharing, enhanced capacity utilization, and process automation as well as higher overall efficiency. Location-based sensors embedded in freight provide complete visibility of the vehicle during transit, thereby helping transport companies ensure their products reach the destination on time. They also play a major role in enabling preventative maintenance, by observing driver behavior and monitoring vehicle security. Many companies are also leveraging data from GPS and fuel sensors to build algorithms to optimize refueling points, and track fuel pilferage. Fuel comprises about 40 percent of the running cost in logistics, but IoT can reduce that by half, ultimately providing a potential bottom-line benefit of approximately 2-3 percent to logistics companies.
Another division of logistics that benefits greatly from IoT is fleet management. Intelligent dispatching and real-time access through IoT connectivity help fleet management companies to ensure their vehicles are operating at optimum levels. Further, IoT solutions also help fleets make informed business decisions to forecast and meet the demands of their customers. While logistics has been one of the first few industries to adopt IoT, the technology’s application in the sector is still in the nascent stage.
IoT-enabled mobile devices also facilitate tracking of inventory data, equipment, and vehicles. Yard personnel in warehouses frequently move around on foot or in vehicles, manually carrying out their routine tasks. The process is time-intensive and also leads to fuel wastage. To address these, organizations implement RFID systems in their supply chain to automate asset and location tracking. This reduces human intervention and enables more machine-to-machine information sharing, which greatly increases efficiency and accuracy.
To remain competitive and enhance efficiency, keeping up with the latest technology is imperative. And, the logistics and transportation industry is benefiting immensely from these advancements and will continue to grow as more innovations come.
Check out: Retail Tech Insights