Commentary: IoT and Analytics to Usher in New Era in Logistics

With millions of shipments being moved, tracked, and stowed by a variety of vehicles and people each day, it is no surprise that logistics and the Internet of Things (IoT) form a promising partnership.

Trucks need smarter management systems that will help in increasing their utilization, reduce downtime, lower costs, and increase revenues. The movement of empty trucks alone results in 15-percent additional operational costs. Disruptive technology can play a critical role in optimizing usage and costs. These losses can be addressed by marrying the operations with IoT and process automation, supported by analytics and artificial intelligence (AI).

Where is the opportunity?

The American Trucking Associations recently published a forecast, which predicted that the industry will enjoy a 29-percent increase in freight volumes by 2026. An immediate solution is the creation of a digital platform that will help in creating opportunities for short-haul trips, from courier companies, niche entrepreneurial industries, and even individuals.


The short-haul LTL business has revenues of about $77-billion-a-year, on journeys of 200 miles or less. “We are getting to the point that, in the not-too-distant future, through vehicle-to-vehicle and vehicle-to-infrastructure technologies and sensors and the ability to detect where things are, every vehicle will know where every other vehicle is, as well as where they are in relationship to the fixed environment they’re moving in,” predicts Scott Corwin, managing director with Deloitte Consulting and leader of Deloitte’s Future of Mobility initiative.

Service at a click

Let us consider a trucking scenario to understand how technology is going to change the logistics space.

  • A shipping app connects shippers and truckers
  • The app alerts the shipper about the available trucks in his/her vicinity for rental
  • The shipper posts his/her requirement in terms of capacities, destination, and type of goods
  • Shippers are given a choice of either hiring an entire truck or sharing a truck
  • The app helps in calculating capacity available in the trucks and also capacity required by the shipper
  • It then matches these requirements and sends the information to the truckers
  • Truckers can accept the job on a first-come-first-serve basis
  • The trucks can be tracked through the app by providing real-time driving locations
  • Payments can be made online through the app with real-time pricing and payments options

Such an app would eliminate the need for third-party brokers, typically charging about 15-20 percent for acting as the middleman during the shipping process.

Collaborating with IoT and Analytics for smarter logistics

IoT could populate a central dashboard that focuses on identifying spare capacity on particular routes or destination pairs, and data analytics could make recommendations for consolidating and optimizing the route.

This additional visibility would create fleet efficiencies, improve fuel economy, and reduce deadhead miles. “The Internet of Things represents $1.9 trillion in value at stake for the logistics industry over the next 10 years. Bountiful opportunities therefore exist for logistics providers to leverage IoT in their organizations in order to increase productivity, reengineer existing processes, and provide new services that challenge traditional business models,” says Rob Siegers, president, global technology, at DHL Customer Solutions & Innovation.

IoT can be further expanded into AI to ensure that trucks meet the revenue demands while still staying in compliance with federal regulations on rest for drivers, miles per day, and load capacities. Amid the hype surrounding IoT today, one thing is clear: The logistics industry is a key player poised to benefit from the IoT revolution.

Analytics is required to understand the sort of loads that are required to be carried and the kind of distances that need to be covered including last mile deliveries and reverse logistics. “We have never been closer to independent logistics grids; driven by digital technologies, a flexible plug-and-play network of logistics partners that drives maximum efficiency is becoming reality,” says Ralph de Kok, senior manager at Accenture Strategy, specialized in supply chain management.

A constraint in achieving high operational efficiency in freight transport occurs at the last mile, which can be optimized to drive down operational costs by using big data analytics techniques. “By connecting the previously unconnected, we create incredible potential for businesses to improve the speed and accuracy of decision making through the analysis and application of digital information. It enables dramatically faster cycle times, highly dynamic processes, adaptive customer experiences, and, through the ecosystem of people and technology, the potential for breakthrough performance gains,” says Edzard Overbeek, senior vice president, Cisco Services.

The ultimate way to transform the business is by improving its efficiencies through the help of IoT, analytics, and intelligent platforms that run independently. Applications such as UBERCargo in Hong Kong, LYNK in India, Dashhaul and Transfix from the United States are already ushering in a new era. But all these applications are still in nascent stages of testing and assessment to understand what it really takes to run such applications for a regulated industry that needs to find untapped business.

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