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Updated 20 Oct 2020

Transport & logistics and the Internet of Things (IoT)

How Machine-To-Machine (M2M) technology can impact and influence your business in the transport and logistics sector. 

Nicole Crampton , 28 June 2016  Share  0 comments  Print

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Successful entrepreneurs and business owners across the globe understand that innovation is critical, if they want their business’ to grow, be competitive and increase productivity. According to the McKell Institute’s recent report,Understanding Productivity, businesses that innovate are twice as likely to increase productivity and reduce costs when compared to businesses that don’t.

Despite these findings, your trucking business still has two options: It can either take a cost-cutting route, which is essentially unwinnable because you can’t save your way to success in business, or you can take the route of innovation, which will contribute to elevating your business to the top of the value chain.

To keep the transport and logistics industry moving forward, the sector needs to have a stronger and more defined vision, leadership, vitality and appetite for innovation along with a drive to strive for continuous improvement.

Your transportation and logistics business needs to regularly increase its innovation in order to stay relevant, or you could risk falling behind your competition.

Related: The Internet of Things & the future of construction

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Understanding innovation

In order for you to implement innovation in your business, you first need to know what it is.

Innovation has become a popular buzzword in business communities. Simply put, innovation is the concept of bringing new creative, revolutionary ideas to life. You can achieve innovation by looking beyond what is currently trendy, to inspire competitors to follow your new direction, all while keeping your customers needs top of mind.

As an example, we can look at Apple. According to Simon Sinek, a leadership expert: “Apple is innovating year after year. It’s more innovative than all its competition, and yet Apple is just a technology company. It has the same access to talent, agencies, consultants and media, but why is it that Apple seems to have something different compared to its competition?”

The answer: Innovation.

Since Apple released its iPad, an example of disruptive innovation, its share price has risen 23 639%, making history for reaching market capitalisation of USD710 billion – double that of its closest rival Microsoft.

Apple’s growth performance serves as an example of a business that anticipates, understands and strategises for the future tend to succeed. Having a strategy for the future enables your transport and logistics company to capitalise on future potential opportunities, even if these opportunities differ from what you anticipated when starting up.

The Internet of Things explained

The IoT connects any device to the Internet and through the Internet with each other. As an example you would be able to connect your cell phone to your washing machine, your vehicles to your tablet and wearable devices to your systems to ensure driver health and safety.

The reason why you would want all of your devices, equipment and machinery connected are because it will lead to greater productivity. If your vehicle knows that it needs a maintenance check-up it can alert you as well as inform you which areas need attention and which don’t, this will save you time and money along with keeping your vehicle in good shape for longer. The wearable devices can display which area of your operation is more productive and share that information with other devices you will be working on.

This video will give you a better understanding of the Internet of Things.

Related: Managing the challenge of the Internet of Things

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The benefits of M2M communications

M2M monitoring for transport equipment has been undergoing development for over a decade already, but recent advances have brought the technology to new heights. Integrated communication can save your transportation and logistics company costs, while improving its ability to generate better profit margins.

Additionally, the IoT has been delivering cost effective solutions throughout the international economic slowdown across a variety of sectors. M2M communications offers transportation and logistics companies two vital benefits; these are the acceleration of systems and processes and the reduction of expenses.

The innovation you could be providing customers includes a truck’s ability to notify you when your driver is driving too fast or too slow. The vehicle will accumulate detailed information for inspections and up-to-date maintenance, while cell phones and portable hand held devices can become tools to increase driver safety. Wearable technology will also make it easier for your employees to clock in and out.

The transport and logistics sector is ideal for wireless technology as vehicle locations frequently change, drivers often need to coordinate and deliver to numerous locations at different times, and these changes require instant communication and management.

Practical applications for IoT in the transport and logistics industry

Smart or connected vehicles will assist in ensuring greater comfort and safety for your drivers as well as a larger cost-saving strategy for your transport and logistics business. Vehicle fleets are rapidly becoming connected and the development of IoT within the industry is opening up exciting new possibilities to address both existing and unsolved challenges.

As an example, there is now an option that enables your mobile operator to monitor the cellular connectivity of smart static and mobile objects in real time. This innovative offer provides you with an instant network status and analysis.

The technology analyses your information in real time and embeds it into your vehicles devices. The information is then displayed via the drivers’ personalised dashboard, which will show customer service indicators and service-level agreement compliance. This option allows you to have a comprehensive view of connectivity performance through the data your system collects.

Here are more beneficial examples of how your transport and logistics company can use IoT:

1. Improved in-transit visibility

Within a logistics environment there are many workers and numerous moving parts. Products pass from a manufacturer through suppliers, distribution centres, retailers and eventually on to customers. There are many steps involved in the supply chain, which is why there is a constant need for real time information including up-to-the-minute product location data and temperature monitoring.

You can combine the M2M concept with other technological innovations such as, cloud computing, GPS and radio frequency identification (RFID) chips. Moreover, real time identity and location can all be determined from wherever you are on the globe.

Information accumulated from GPS and RFID sensors allow employees to accurately predict the time of the products’ arrival, and can benefit supply chain professionals to automate their shipping and delivery procedures. Monitoring environmental factors, like temperature fluctuations, can improve efficiency and aid you in identifying specific containers with problems while in transit.

2. Assess cargo conditions

In the transport industry, temperature can be a critical factor; sensors can now notify you and the driver if there is any change in cargo conditions that could cause the cargo to perish. The Food and Agricultural Organisation of the United Nations reports that an estimate third of all foods perish while in transit, IoT can prevent this.

As a real world example, U.K. food distributors JJ Food Service previously had to depend on its drivers to record temperatures inside the vehicle every time they made a delivery. This would ensure that goods remained at the temperature that complied with regulations.

However drivers didn’t always do this, COO Mushtaque Ahmed explains: "If the drivers were rushing, they would forget to log the temperatures. There were manual temperature probes in the vehicles that they needed to use at the point of delivery, but half the time the drivers didn't do it." Relying on drivers to perform temperature checks can hinder logistics and transportation teams as it is a time intensive process, particularly considering that Ahmed’s drivers had to keep records for 60 000 orders a month.

To alleviate this challenging situation but still comply with the regulations, the business, that has eight distribution centres and serve more than 30 000 businesses, went live on an automated IoT logistics system. This system monitors the temperature of goods carried in the delivery vehicle.

Additionally, within each refrigerated truck there are now Bluetooth-enabled sensors that send the temperature readings to an app on the driver’s IoT device – like a smartphone. As a result, if temperature falls below a designated level the technology notifies both drivers and dispatchers.

Ahmed believes that by using IoT logistics technologies, his business’ processes are becoming more efficient and intelligent and the company is improving its service offerings.

“In terms of legal compliance, customer service, recordkeeping, stock reconciliation, everything is happening behind the scenes without the drivers or delivery person worrying about it."

3. Driving conditions

By using IoT technology, you can assist your drivers in choosing the most efficient routes while helping them to be more time-efficient. GPS tracking and RFID components take road safety and other obstacles into account, such as weather and traffic conditions, positions of specific pallets or products in the overall cargo shipment, which can all improve productivity and efficiency at all nodes of the supply chain.

Here are a few more practical examples of IoT options within the transport and logistics industry:

  • The technology identifies any product issues in transit. This helps your team find solutions before the vehicle has even reach the customer’s destination.
  • This technology can offer you real-time traffic monitoring, which can help you to optimise your fleets’ routes and save on fuel costs.
  • The IoT allows your operators to identify any redundancies, at any stage, within your delivery chain, which will enable your transport and logistics business to build and improve on your efficiencies.
  • IoT makes your warehousing options significantly more transparent and easier to manage. As an example, using live stock-feeds can lead to a reduction in out-of-stock situations or help you to inform your customers of their current stock level. This could assist you in providing an added value service to your customers by always keeping them up-to-date on how much stock you have in the warehouse.

Related: Your fleet safety programme could save you money

Benefits of vehicle sensors

Trucks with sensors offer you the opportunity to manage and control your fleet’s use through web applications. GPS technology enables your fleet manager to access real-time information on routes and drives.

This technology can assist you in checking in on drivers, ensuring they’re on schedule and determining whether they are making costly off-route stops. The technology will send information to your handheld device, no matter where you are or how far away the driver is from you. Telematics solutions offer you insights into your drivers behaviour such as if they are adhering to laws, speeding or idling.

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How the IoT can cut your costs in transport and logistics

1. Improve visibility

The transport and logistics industry across the world have started focusing on how to maximise supply chain efficiency in order to sustain profitability and viability. On the other hand, to be able to reach this level of performance the industry needs to make end-to-end improvements. Complete visibility will create more effective, timely decisions and reduces delays through efficient detection of obstacles. 

2. Improve accuracy

Mobile devices including, RFID, barcode scanners and mobile computers have become a significant influence in the visibility and operations of supply chains. Using RFID technology, transportation and logistics companies have achieved nearly 100% shipping and receiving accuracy, 99.5% inventory accuracy as well as processing orders 30% faster and reducing labour costs by 30%.

3. Increase efficiency

Mobile technology offers businesses line of sight into equipment, inventory and business processes. This cutting edge technology provides transport and logistics companies with the opportunity to increase their efficiency by enabling them to see real-time data across their entire supply chain. 

4. Establish a digital presence

The efficiency of the warehouse or yard can directly impact transportation and logistics businesses costs and its ability to stay competitive. IoT enabled mobile devices provide workers with the options to track inventory data, equipment and vehicles. This allows you to give your physical assets a digital footprint, which you can monitor and analyse.

Using this technology warehouses can capture and communicate mission-critical information across the cloud, which will ensure the right products are in the right place at the right time.

5. Utilise your resources better

Fleet managers fill an important role in managing maintenance schedules, daily vehicle usage and service routes. To maximise your transport and logistic business’ productivity and operational efficiency, fleet downtime needs to be at a minimum. Using IoT technology such as, mobile scanners, computers and RFID systems, fleet managers can gain insights into their assets and are able to better streamline their operations, and keep the fleet moving forward.

Using mobile devices instead of manual and hard-copy work orders can save technicians time and increase data accuracy. Additionally, technology allows real-time accurate insights into a vehicles maintenance history, parts availability and inventory records. Technicians can use this concept to relay information back and forth to the central database.

6. Improve uptime

Real-time visibility can increase both driver and vehicle performance as well as improve safety, reduce damages to inventory and insurance related costs. As a result, real-time visibility reduces costs and improves performance both of which are critical to improving your bottom line.

Additionally, this technology will help technicians and drivers respond faster to customer service inquiries as well as help employees to know when and where to allocate their time, which improves your company’s overall performance and customer service. Having the option to monitor equipment and the environment in real-time also offers field service technicians the ability to pre-empt challenges. In addition, this technology can also assist with pre-emptive maintenance and eliminating unnecessary or reactive responses.

Soon the Internet of Things will be essential to our daily lives. The transportation world will have the opportunity utilise cutting edge technology, with more meaningful data to glean from. Managers can analyse information about operations and can potentially make improvements to every driver, in every fleet, as well as the business’ systems and process.

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About the author

Nicole Crampton

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