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Three ways logistics providers can embrace IoT to differentiate themselves

Gartner believes the supply chain management market will exceed $13 billion in software revenue this year, as logistics companies strive to meet digitization demands. Organizations within the industry are beginning to differentiate themselves through their investments in technologies like IoT-enabled devices, machine learning and smart machines. IoT can benefit logistics providers in a number of ways, including warehouse capacity optimization, transportation, labor management and safety.

Warehouse capacity

In Q4 2016, industrial vacancy was already at a 17-year low (7.9 %). According to Jones Lang LaSalle, in the first half of 2017, warehouse vacancy was 5.5% and it may continue to drop through the holiday season. The drop in vacancy can primarily be attributed to direct-to-consumer fulfillment and the demand it’s putting on previously vacant space. Jones Lang LaSalle finds that “e-commerce and logistics distribution companies have signed more leases in buildings under construction — an indication of a growing sector with a need for new functional warehouse space.” In other words, logistics providers are scrambling for more space.

Many firms are looking to IoT to better utilize their warehouse space, since connected machines and devices allow for optimized capacity and inventory monitoring. Forklifts, for instance, have been outfitted with IoT sensors that help logistics providers make inventory-related decisions faster. Beyond that, Grand View Research believes automated warehousing systems have increased warehouse capacity by a factor of hundreds over “traditional forklift operations.” The research analyst firm also believes investment in IoT-powered inventory management and warehouse capacity technologies will continue to grow in the near future.


IoT-enabled transportation services are perhaps the most recognizable application of IoT in logistics today. Driverless vehicles dot city street corners, public buses relay their position to mobile apps and smart grids help optimize traffic flows. But how will this type of innovation impact the movement of freight — from first mile to final mile? Since transportation is the most costly variable within a supply chain, understanding optimizations in this area can uncover huge cost-saving opportunities in the following areas:

  • Freight forwarding. Freight Forwarding is oftentimes viewed as a technology laggard when it comes to innovation. Yet, even small advancements provide added visibility into ocean freight, allowing ships to be tracked using an automatic identification system, which transmits data between ships, satellites and AIS stations around the world. Many ports are becoming more intelligent, enabling milestone tracking and reduced or eliminated wait times.
  • Trucking. When electronic logging device (ELD) legislation to monitor driving time and promote safer driving conditions was passed in the U.S., the laws opened a new frontier for truck connectivity. Along with ELDs, fleet management systems can monitor truck fleets’ idle time, downtime, speed and other important metrics, saving trucking companies and logistics providers time and money.
  • Small parcel. USPS coined a new term, “Internet of Postal Things,” or IoPT, an initiative that lets the Postal Service “develop applications to protect and enhance its core business through cost savings, operational efficiencies, new products and services, and ultimately, a better customer experience,” according to the organization. FedEx launched a product called SenseAware, which monitors just about every aspect of a shipment, from temperature to light exposure. SenseAware aggregates information through a 2G network to ensure a shipment isn’t compromised.

These examples illustrate the potential impact of IoT on transportation. The degree to which IoT continues to impact transportation initiatives will depend on how well organizations use the data to streamline processes from first to final mile.

Labor management and safety

IoT can help improve labor optimization and increase safety in hazardous industrial environments. Radio frequency (RF) module-equipped tools, for example, can track warehouse associates to better understand the cadence of activities, such as shipping and receiving. IoT-enabled monitoring and tracking makes warehouse operations more efficient. Technology like connected forklifts, pallet jacks and other material-handling equipment can help identify additional opportunities, resulting in plans to enact better processes and more ways to save money.

Improving labor efficiencies is not the only reason for using IoT-based devices in a warehouse setting. Safety is also a top concern; people and machines move quickly, and large, heavy equipment is constantly humming. IoT technology has the potential to enhance workplace safety. If, for instance, an RF gun could track associates’ movements to and from pick locations (similar to wearable devices), logistics providers could identify movements that present bigger safety risks and enact training or change procedures to make the workplace safer.

IoT technology offers logistics providers a competitive advantage

Logistics and transportation aren’t the only industries investing in IoT technology. Others , including agriculture, construction and even assisted living, are also realizing the benefits of connected devices. According to Machina Research, low-power wide area connections are set to overtake more well-known 2G, 3G and 4G networks as the leading IoT connectivity provider, powering nearly 1.5 billion devices by 2022. Clearly, major shifts are on the horizon as a result of IoT advances. Logistics providers and other supply chain management companies that embrace IoT-enabled technologies will find themselves one step ahead of the competition as the push to incorporate the internet of things intensifies.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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