5 IoT lessons taken from the logistics industry

Want proof that IoT addresses current business cases and generates new use cases? Just look at transportation companies.

Technology drives business strategy now more than ever — and nowhere is this more apparent than in the logistics industry. The logistics industry was an early adopter of the Internet of Things, and the stories of truck fleet digital transformation are numerous. They include chronicling the adoption of sensor-based technology and analytics to track where trucks are en route, whether they meet deadlines, what road repair and weather conditions look like, and even the safety habits of drivers.

Virtually every industry sector can learn from the success that logistics companies have experienced with IoT and analytics. Below are five business lessons learned from logistics.

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Top 5 logistics industry lessons for IoT

1. Your customers drive the market

Major transportation companies like UPS and FedEx felt pressure during the holiday season to make more deliveries as consumers continued to migrate toward online ordering.

These e-commerce consumers expected immediate order satisfaction, and the only way that transporters could achieve this was with the help of mobile technology. GPS-centric applications provided tracking and data about routes, the ability to reroute vehicles and the condition of goods on trucks.

In this environment, even a cautious CIO can’t help a business survive without taking a hard look at IoT, analytics and the ability to use both for a business transformation.

SEE: Hiring Kit: IoT developer (TechRepublic Premium)

2. Self-service is important

Using IoT to track goods during transport, combined with IoT sensors’ ability to monitor the condition of perishable goods, achieves efficiency and reliability. IoT becomes an indispensable technology that delivers quality service, which is now expected by consumers.

Equally important is consumers’ desire for more self-service options and for direct control over the flow of their goods. For example, a customer can order an item at an online e-commerce portal, receive updates on their smartphone about the arrival status of the item and then receive the item.

If there is a problem with the item, automated systems allow the customer to pre-print or store on a smartphone the return shipment sticker complete with barcode. This code can be scanned with a handheld IoT device at a return product outlet such as UPS or FedEx, where a return label can immediately be printed and affixed to the package that is going back.

IoT and mobility technologies facilitate self-service processes like this, and they also integrate with handheld IoT devices, such as the smartphones that consumers use to store or print return labels and to track goods throughout the logistics process.

3. End-to-end transparency of operations is the new normal

With everyone engaged in the logistics process wanting end-to-end visibility of goods and transport, corporate silos of information must be eliminated to meet the pace of business and to ensure that everyone operates with a single data source of truth.

IoT provides this. For example, if a driver breaks down in the middle of nowhere in the dead of night, someone at headquarters can see this and dispatch help. If a load of produce is in danger of perishing, sensors can flag environmental irregularities and a dispatcher can reroute goods to nearby markets. None of this could happen in the pre-sensor analytics world.

4. New safety and compliance requirements provide new benefits

Logistics providers have found safety and compliance requirements challenging to keep up with, but these requirements also provide new benefits.

In 2022, for example, the U.S. mandated that trucks transporting goods could not exceed 65 miles per hour. Additionally, restricted greenhouse gas emissions, automatic braking and training for drivers were either being implemented or discussed. 

These and future regulations have motivated the logistics industry to consider IoT technology that can be deployed on trucks to monitor and report on speeds, fuel consumption, emissions and even driver behavior such as braking habits.

Collectively, IoT is assisting logistics companies in meeting new government regulations and also in training and working with drivers to improve safety and performance.

5. IoT and analytics doesn’t mean overturning legacy systems

A common complaint across industry sectors is that IoT and analytics don’t work well with legacy systems and that it forces costly rip-and-replace data center plans. This is not true. In most cases, there are common APIs that can get disparate systems to work together. This enables companies to move forward at the same time that they continue to derive business benefits from their legacy systems.

Closing remarks

Every industry has cost, revenue, performance and customer satisfaction goals. What we have learned from industries like logistics, an early IoT adopter, is that IoT not only addresses current business cases but also generates new use cases as companies understand it and its potential.

The potential that IoT unlocks for logistics is visibility — not only of shipments, but of driving performance, routes and the environmental conditions that perishable cargo is being carried with.

The IoT experiment has been a win-win for everyone: Both for logistics companies that want to improve performance and manage costs, and for their end customers, who want visibility of their purchases every step of the way.

Read more about IoT with a look at how it is automating warehouse operations and the top five trends to watch in industrial IoT.