Impact of IoT on Global Logistics Development

The logistics market is dynamic and competitive. Over the past year, it has been “reformatted” not only due to the situation in the world but also because the Internet of Things has entered further into the logistics niche.

According to KPMG reports, market challenges are forcing participants to find new growth points for their business and rebuild existing supply chains, like rail transit in the Asia-Europe direction. A high empty mileage reduces the efficiency of cargo transportation and creates congestion on key routes.

In this article you will learn about the modern IoT logistics solutions and the ways they affect international logistics and transport.

What Is IoT in Logistics Solutions?

“The Internet of Things is a stylish smart refrigerator door that orders a delivery of your favorite Pepperoni pizza, or an understanding kettle that boils water in one click from a smartphone. These are smart sensors in agricultural fields and drones with powerful cameras, which enable us to monitor the state of the soil. In a couple more years, the world around us will become a total Internet of Things.”

When we talk about the Internet of Things, the first association arises with smart devices and tools that can be physically touched. This is the Internet of Things, right? But is it only limited to devices? The Internet of Things goes far beyond, especially in the world of global logistics.

What does IoT in the logistics and transpotation market include?

IoT Logistics Examples

DHL, the global logistics leader, recognizes that as technology costs decrease, so does the size of IoT devices. It turns out that the market is growing, while the instruments are getting smaller. Such a dissonance. Smaller sensors collect a larger amount of data through creative and non-destructive placement. Let’s consider what exactly modern developments have prepared for us, apart from the sensors.

 Warehouse and inventory logistics management with smart pallets and super racks

IoT sensors track inventory and provide data that can be used in trend analysis to predict future inventory requirements. Goods are automatically moved with the help of stacker cranes; production time and labor costs are reduced; the human factor is leveled off because the robot doesn’t “stop to yawn”.

What does it lead to? This will help avoid under-stock and over-stock situations.

Tracking the path of goods from the moment of purchase to delivery

Traditional monitoring lies in scanning an order between points of delivery. RFID, or Radio Frequency Identification, are special tags that  simplify the tracking process by connecting to the cloud and sending location data more often than scanning. You could remind me of QR codes or Data Matrix here. Yes, they can also be used by analogy, but unlike RFID, optical codes have to be scanned for each item separately, which takes time.

What does it lead to? RFID tags reduce unnecessary costs. On average, the accuracy of inventory level is about 65 %. Using RFID increases it up to 95 %. BigData monitoring under RFID will make it possible to identify the most effective couriers and truckers, determine the most efficient delivery routes, etc. If delivery staff show poor results, they can be sent for additional corrections.

Express drone delivery of parcels

Drones are unmanned aerial vehicles and droids that can increase the speed and efficiency of various logistics infrastructures. This is no longer a trend or novelty, as today’s developments are increasing the precision and speed of their movement.

According to a CompTIA poll, drones are used by enterprises of different sizes and niches:

Source: CompTIA poll

Areas of use of drones by enterprises

What does it lead to? Automating business processes, enabling intelligent inventory tracking, fast product transportation, and instant delivery from stores.

The Future Insights of IoT in Logistics

The development of the IoT in the international logistics market amounted to $ 34,504.8 million in 2019. Prescient Strategic intelligence predicts a stable CAGR of 13.2 % until 2030. Currently, the priority tasks of logistics companies are:

  • to ensure just-in-time delivery;
  • to provide transparency of the supply chain;
  • to guarantee the transparency of the transportation cycle and quality of services.
Read also: The best IoT tools to start using right now Read more

The success of any logistics company lies in the effective management of stocks and warehousing, automation of internal business processes, fast delivery, and ensuring the safe storage of goods.

Information value loop

Data becomes valuable as it goes through this cycle. Information exchange in logistics processes is provided by wireless networks, such as GSM, Bluetooth, Wi-Fi and so on.

IoT finds application in all sectors where transport is involved. That is, its influence isn’t limited solely to logistics and transport. Instead, it is coming to manufacturing, retail trade (including E-Commerce), construction, and other niches. What does this mean for business entities? Transparency of processes in the supply chain, better and more consistent work of transport and employees, and saving company resources.

The IoT is taking businesses in logistics to the next level. Development of effective solutions is aimed at working with Big Data, accelerating logistics supply chains, etc. This is facilitated by other modern trends: the proliferation of 5G Internet, rapid development of mobile applications and cloud services. Read more about comprehensive distributed cloud solutions in my colleague’s article via this link.

CHI Software Expertise

Our team has had an unusual experience with a project in the logistics industry, which I would like to share with you.

Client’s request: The client requested development of a solution that would prevent possible errors due to damaged barcodes. Probably everyone had seen a worn-out, blurry, and burnt-out barcode. What happened to it? We can only guess. Often scratches appear during transportation and make sorting the parcels impossible.

Our solution: The CHI Software team developed and trained a special neural network to recognize and sort a barcode even in the event of any mechanical damage.

Parcel processing system | CHI Software

Technologies and tools used: Optical Character Recognition with Tesseract, Python, С++, NumPy, Pillow, OpenCV, scikit-image, TensorFlow, Keras, CNN, RNN, Darknet, Yolo, CNN-RNN-CTC​.

Result: Automation of sorting and business processes became convenient and accurate. Distribution centers around the world have become easier to operate despite problematic barcodes. Our solution helped the client to reduce costs and set up correct parcel sorting.

All the advantages of IoT in logistics are fundamentally changing the quality of services provided. Operating processes become optimized: accounting and financial monitoring, which requires data on closed waybills, reduces the time to process tasks and synchronizes all data because you can connect everything up with a CRM. And, this can be done in real-time.

At CHI Software we track trends and offer personalized technology and tools for your business. Our teams create unique digital space and products that inspire your business to grow.

Need advice on your logistics solution? Contact us

About the author

Viktoriia Bilyk Customer Success Executive

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