DHL and Cargotec are among the companies using IoT in logistics to streamline operations, increase visibility and save costs, according to a new report by data and analytics company GlobalData
From tracking lorries in real-time to predicting demand for certain goods in warehouses, IoT in logistics is helping the sector to keep up with the ever-changing face of online sales.
The Internet of Things – or IoT – connects various web-enabled devices and can be used by businesses to streamline operations and reduce costs.
In a report titled IoT in Logistics: Technologies and Usage Cases, data and analytics company GlobalData has assessed how companies are adopting “smart logistics for a smarter supply chain”.
It estimates that the global IoT devices market in the logistics sector is expected to grow from $90m (£70m) in 2015 to $2.44bn (£1.89bn) by 2020, with a 93.5% compound annual growth rate from 2016 to 2020.
During the same period, the number of IoT connections is expected to increase from 15 million to 255.5 million.
Senior technology analyst Alok Singh, who authored the report, said technology with connecting capabilities can help to hurdle the age-old challenge of keeping track of vehicle and parcel locations in real-time.
It also enables logistics organisations to accomplish transparency, efficiency, maintenance, automation, freight safety and cost optimisation throughout supply chain processes.
“Integration of IoT and big data in logistics is expected to be a game-changer, which can enhance the accuracy of organisations’ demand forecasts, discover new demand patterns, and develop new services by sharing data with partners across the supply chain,” said Mr Singh.
In the report, he picks out some of the key technology that is transforming the sector and offers examples of how it IoT in logistics has been adopted.
IoT in logistics: Technologies and opportunities
Real-time fleet management
By far the largest and most mature use case across the IoT market, real-time fleet management and telematics play a vital role in handling maintenance schedules, vehicle usage and suggested routes.
Growing emphasis on energy savings, and reducing overall fleet budgets such as maintenance costs and fuel spend, is pushing the logistics operators to implement fleet management solutions to improve the efficiency and safety of fleet operations.
Fleet management encompasses live fleet monitoring, smart deliveries, fuel cost monitoring, diagnostics, preventive maintenance and driver behaviour improvements.
Real-time visibility into driver and vehicle performance and health is critical to increase the safety of technicians, reduce inventory damage, and decrease insurance-related costs.
Additionally, with real-time insight, technicians and drivers can respond to customer service enquiries on time.
Predictive maintenance allows logistics organisations to monitor machines, predict quality issues and upcoming maintenance, while repairing on schedule to help minimise disruptions to normal operations – instead of forcing the company to react to sudden, unexpected breakdowns.
It provides insights into when and where parts are needed, thereby helping to reduce expensive expedited shipping costs for spares and making it easier to save money by reducing the number of spare parts required.
Predictive maintenance can also help to reduce overtime expenses by providing precise insights into probable upcoming issues by scheduling more accurately and necessary skilled personnel.
By reducing time-consuming routine maintenance, predictive maintenance systems can increase fleet availability.
IoT plays an important role in creating smarter warehouse management through the use of intelligent devices, sensors and radio frequency identification.
Connected technology provides visibility to the third-party logistics providers and customers regarding the transit and cargo available in the warehouse, which helps them streamline the planning and ordering pattern.
Greater stock visibility will minimise theft from warehouses and track the movements, which might even prevent the occurrence of accidents.
IoT enables warehouse managers to pinpoint the exact location and progress of any item at any given time – significantly enhancing warehouse efficiency by reducing manual labour intervention and increasing the speed of operations.
IoT in logistics: Examples of connected technology being used
DHL app reduces delays for lorry drivers
DHL Supply Chain, a division of Deutsche Post DHL that provides contract logistics services along the entire supply chain, has designed and developed a Narrowband Internet of Things (NB-IoT) app in association with Huawei Technologies.
It facilitates and streamlines yard management for inbound-to-manufacturing logistics, leading to noteworthy improvements in inbound processing time at the site.
By deploying the NB-IoT solution over a high-speed wireless connection, DHL Supply Chain is now able to automatically collect dock availability data in real-time, which in return provides visibility to the dispatcher and lorry drivers.
The yard management system then automatically screens the docks for the availability, providing each driver with real-time status updates visible via the app.
The NB-IoT solution helps inbound trucks to prioritise the needs of the manufacturing site and helps shipments to be unloaded at the appropriate dock.
It also halves waiting time for drivers from an average waiting time of 40 minutes, thereby reducing the risks of manufacturing delays as materials arrive on time and resources are optimised appropriately.
Digital transformation of the Port of Rotterdam
The Port of Rotterdam, in the Netherlands, handles more than 461 million tonnes of cargo.
It wanted to optimise traffic management to improve efficiency and become the model for ports of the future.
The Port of Rotterdam implemented IBM’s IoT and artificial intelligence (AI) technologies to collect water and weather data, as well as information about docking berths.
Sensors are being deployed across 42km of land and sea to collect and process the information through a centralised dashboard application.
The data collected will be analysed by IBM’s cloud-based IoT technology to manage vessel traffic efficiently in order to maximise cargo loading.
IoT in logistics will also connect ship captains with the port and operators of the arrival terminals, and monitor the communications data.
With the technology, the port expects a reduction in time spent berthed by the ship in port, which will in turn reduce costs by about $80,000 (£62,000) an hour.
Furthermore, 3D metal printing in the shipyards of RDM Rotterdam will use cognitive IoT technology from IBM in a production process that will create ship components such as propellers in just 200 hours, rather than over six weeks.
Leveraging digital solutions to transform cargo handling operation of Cargotec
Cargotec, a Finnish company that makes cargo-handling machinery for ships, ports, terminals and local distribution with a vision to be the leader in intelligent cargo-handling, plans to connect its entire fleet.
Working with Tata Consultancy Services (TCS), Cargotec developed an IoT in logistics platform to collect, store and analyse sensory data.
Data lake and big data platforms enable storage and reporting of large quantities of data, algorithm-driven actions, business process automation and data publication through APIs (application programming interfaces).
Web portals and business intelligence-based reports for KPIs (key performance indicators), alerts, notifications and performance-related metrics provide internal and external support to clients.
TCS facilitated process automation, operational lifetime value, cargo flow optimisation, predictive maintenance, diagnostics and new advisory services.
Cargotec was able to improve productivity and machine utilisation, leading to cost savings that enabled the company to deliver unique value to customers.