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Leveraging the Internet of Things to drive improvements in logistics industry

August 9, 2018
Using Microservices Architecture to Break Your Vendor Lock-in
Moving to Microservices
Internet of things in logistics and transportation

Seoul is repeatedly considered one of the smartest city in the world. This achievement became possible a lot because of the well-developed and tested Internet of Thing transportation system, developed as early as 2004. Since then, the IoT in transportation and logistics have advanced and now Seoul’s buses are capable of gathering information via road sensors, GPS devices, loop detectors, and citizen reports.

Such approach has not only raised satisfaction and saved money on management but proved an important advancement in the Internet of Things in logistics. In 2020, the global spending on IoT is predicted to reach $40 billion, compared to $10 billion in 2015.

The reasons for tremendous IoT logistics growth

2018 has been a year of advancements in transportation. We’ve seen autonomous driving car startups receiving enormous funding and transportation solutions being in the media headlines.

It’s enough to look at just a few trends of the Internet of things development to understand that timing for this has never been better:

  • In 2020, there are going to be more mobile devices than people in the world. And it’s only mobile devices – not counting computers, laptops, and smart technology.
  • Telecom companies all over the world massively implement 5G, therefore powering wireless connection, and allowing to use the Internet anywhere.
  • In 2027, big data market is expected to top $103 billion dollars in global spending. Combined with IoT, businesses receive a strong potential to find out more about their customers and use it in connected innovations.

This growth, of course, doesn’t exist in the vacuum but is developed in regards to industries’ needs to solve particular problems. Let’s see what issues transportation currently faces and how they can be solved with IoT.

Challenges for the logistic industry in 2018

It’s no secret that commuting is a global trend for no less than 5 years now, and the situation is surely likely to continue. This forces logistical companies think of new solutions and figure out the way to adapt tech advancements to solve industry’s problem (and there are many).

  • The lack of transparency of the transportation process and weak optimization of supply chain management. Ensuring delivery of right products/services on the right vehicles, quantity, time, and a place still remains a challenge.
  • No step-by-step control available for customers. It’s natural that people want to plan their commuting or luggage transportation as precise as possible. The challenge is to give the resources for doing it securely and on time.
  • Flexibility is a must. During transportation, something can naturally go wrong, and the task is to inform about such changes and adapt logistical systems right away.

If a customer wants to suddenly change the date or direction of transportation, companies often have no choice – especially if goods or vehicles are already on the road. One of the main challenges for logistics is to figure out the way to adapt to customers’ ever-changing demands responding to the modern customer-obsession trend.

What Internet of Things offers for logistics companies and clients?

Luckily, for every market challenge out there technology seems to have an answer. By taking a look at what was done with IoT both in logistics and other industries, we can figure out the way to answer most pressing issues with a custom IoT software.

Case #1 – Smart transport system based on the Internet of Things by the Port of Hamburg

We already mentioned how smart transportation was adopted in Seoul, where cars are able to exchange information and collect insights. But what about other kinds of transportation?

The Port of Hamburg, one of the biggest ports in Europe, launched a Smartport program which allowed to connect ship systems to control and management devices by installing 30 sensors to monitor fleet movements.

With such system in place, it’s possible to predict when and where ships will arrive in accordance to the smallest emergencies. This allows to organize fleet movements and adapt to different conditions and situations.

Case #2 – Resource Management by Hagihon

Hagihon is the one of the largest water supply company in Israel adapted smart technology to optimize water transportation by reducing its loss in the process. Traditional manual work was replaced with pump in-ground sensors that tracked water sensors and allowed to pick the most efficient collecting method.

It was done with the assistance of supervisory control and data acquisition system: algorithms analyzed the data collected by sensors and sent it to the managers. With a geographical information system, developers created a real-time map that adapts to weather changes. By implementing this, Hagihon significantly reduced the shortage of water and saved a lot of resources.

Case #3 – Safety Protection

IoT prediction system was already implemented by Union Pacific, the biggest railroad in the US. To solve the problem of unpredicted equipment failures, the company placed visual and acoustic sensors on track to monitor the possible vulnerabilities in the train wheels mechanism.

As the result, the company avoided $40 million damage as well as potentially dangerous road accidents. The advancement not only increased Union Pacific’s profit but also prolonged the average age of train mechanism, reducing repair costs drastically.

Conclusions

By 2020, there are going to exist 50 billion connected objects – mobiles, laptops, home assistant, and many other devices. It’s apparent that logistics has the potential to use the Internet of Things technology to its fullest.

With all the existing advancement it might seem that everything that could be connected, already is. But compared to all existing objects out there, connected ‘things’ present as little as 3%. The question is, how will the world and the logistics industry look like when 30% of all objects are connected? The one thing is obvious. It’s important to adapt to ever-growing progress and get technology on your side to be well-prepared for future changes.

Let’s do it together. Drop us a line and our IoT team will take a look at your idea and happily implement it. Could be, the next groundbreaking innovation is going to be yours.