Of late, there has been a massive uptick in the adoption of new-age technology solutions by enterprises in the logistics sector. From artificial intelligence (AI) to automation, the business of moving freight and delivering it to the end user within a stipulated timeline is increasingly being controlled and optimised by new-age technology solutions. While the need to innovate and stay updated to meet the ever-changing needs of users continues to be a major driver of this technology uptake, the outbreak of the Covid-19 pandemic has accelerated the pace of adoption.
These technologies are revolutionising the logistics sector, and streamlining supply chains, operations and warehouse management, leading to higher efficiency and productivity. A look at some of the key use cases of new-age technologies, adoption trends across enterprises, challenges and the way forward…
Use cases of key technology solutions
Drone technology holds immense potential as far its use cases in the logistics sector are concerned. It can bring cost effectiveness to the larger operations of companies in the long run. The adoption of drones and robots in the logistics sector will help reduce the manual work requirement and the costs associated with transportation.
Internet of things (IoT) is a technology that has found multiple use cases in the sector. By deploying IoT devices, companies can not only track their shipments, but also make sure that the whole transportation process runs smoothly. Enterprises across the logistics sector are increasingly deploying solutions such as radio-frequency identification tags, GPS and specialised sensors to carry out real-time tracking of shipments and consignments. These solutions are enabling them to detect any potential breach in the service-level agreement or turnaround time early on, and take actions accordingly. In fact, the adoption of IoT-based tracking solutions is enabling logistics players to fast-track their shipments. Further, the deployment of sensors in packages and consignments is fast gaining traction. Connected assets are the most common applications for IoT devices as they have higher value, longer lifespans and less mobility than packages. The initial IoT use cases focused on larger and more expensive assets, such as vehicles in a fleet management system, but the logistics industry is now expanding the use of sensors to smaller and sometimes more complex assets, such as consigned products.
In addition, the deployment of IoT devices in facilities and warehouses can help monitor and improve the use of utilities such as lights and machines, thereby allowing facility owners to substantially save on costs.
Shipment tracking systems are yet another tech innovation that is enabling logistics players to monitor the location of their shipments on a real-time basis. By using shipment tracking solutions, companies can also find out the exact delivery date.
AI too has made inroads into the sector, playing a significant role in streamlining enterprise operations. By using cognitive automation, enterprises can save time, reduce costs and increase productivity. For managing warehousing operations, AI-based solutions can help collect and analyse key information regarding the functioning of key devices and machines, and help with inventory processing. Moreover, AI-based self-driving vehicles can reduce the opex involved in transportation, thus bringing down the overall expenses in logistics. AI is also being increasingly used by logistics players for predictive demand and network planning. With the help of AI, companies can accurately predict demand and accordingly do capacity planning, thus ensuring better operational management.
AI also plays a key role in providing clean data, which can be used to gather insightful analysis and create better systems. Companies often generate their data at multiple points and through multiple people. Such data and figures cannot be easily improved at the source. Thus, algorithms have to be applied to improve data quality and analysis.
Geofencing and GPS
Geofencing integration tools can help logistics companies track the physical transportation of goods. Team members receive a notification when a vehicle crosses their premises or a certain geographical area. Moreover, with the help of GPS, companies can gain complete visibility of the consignment. Professionals can probe into problems and fix issues in transit.
Self-driving trucks, autonomous ships and drones are gradually gaining popularity in the logistics sector, as they help cut down labour costs and expedite the delivery process. In fact, various global players have already started deploying these solutions. Industry analysts predict that it will not be long before India starts deploying them too. In fact, India has already approved regulations for drones, and related frameworks for other use cases are also in the works. These technologies can potentially transform the conventional logistics market by helping deliver products quicker, more efficiently and cost effectively. Moreover, these solutions are far more environment friendly than traditional trucks.
According to a recent market report, autonomous transport solutions can help carriers save around 20 per cent of the fuel costs by supporting transportation, warehousing operations and last-mile deliveries. Further, they can potentially revolutionise the way high-priority goods such as medical supplies and food are delivered.
Given the many benefits of new-age technology solutions for the logistics sector, companies working in this sector are increasingly working towards leveraging these solutions. For instance, DHL has launched SmarTrucking in India to accelerate the development of technology-enabled logistics solutions. DHL uses IoT and data-driven insights to increase the return on time and resources. This provides almost 95 per cent of end-to-end shipment visibility along with a 50 per cent reduction in transit time compared to the traditional trucking industry. Likewise, the Delhivery AI platform holds 1 billion system actions, 30 million addresses, 4 billion GPS locations and 2.7 million TB of computer vision data. The company also uses AI, machine learning (ML) and big data to create a flexible, responsive and adaptable delivery system.
Amazon, one of the biggest players in the logistics and e-commerce industry, has adopted a long-term strategy to use AI technologies in its operations across various territories, including India. It has been using AI and ML to detect junk addresses, compute contact scores, and provide corrected addresses.
Meanwhile, Synchronized Supply Systems Limited is using application programming interfaces to provide real-time data of shipments. The company has also introduced a warehouse management system a distribution management system for transportation, and sharing of proprietary applications with clients for ease of services.
Another player in the sector, AbleCold Logistics uses IoT devices to monitor real-time temperature data across the supply chain, allowing them to react faster in case of any breach, preventing product damage and lowering supply chain costs for brands. Further, the Cargo Service Center recently launched its real-time temperature mapping and tracking app TURANT. The app enables complete tracking of shipments on a real-time basis.
Key challenges and the way forward
A major concern for technology deployment in the logistics industry is user resistance to adopting new technologies. As per industry leaders, since users in the logistics industry tend to be less educated, they struggle with technology deployment. Hence, technology needs to be very refined and simple for adoption by these users. Another major challenge is the unavailability of technology that is suited to the Indian logistics industry. The key available logistics software is designed for Western markets but repackaged and sold in India. This does not address the unique challenges that the Indian logistics environment poses. Thus, there is a gap that needs to be filled by technology, keeping Indian logistics challenges in mind.
In addition, poor infrastructure, inadequate road connectivity and regulatory hurdles continue to impede sector growth. Also, individual truckers continue to dominate the space, which poses a challenge in the expansion and development of the digital logistics sector.
Challenges notwithstanding, technology adoption is the road forward and is expected to shape both the near-term and long-term future of the sector. According to a joint report published by CII and Arthur D. Little, technology solutions such as geotagging, auto-capture and big data will emerge in a big way and enable collaboration, better forecasting and traceability along the network, which could help monitor supply chains. This, in turn, will enable logistics players to better manage resources along the supply chain, and manage demand- and supply-side shocks. Meanwhile, AI, blockchain and IoT will help bring breakthrough productivity gains in the supply chain network.