Enterprises in the logistics sector have traditionally had limited scope in digital transformation due to their low-margin business models. However, supply chain disruptions, economic shocks and evolving customer expectations have nece­ssitated streamlining operations and in­cre­asing robustness through digitalisation of the industry. The sector is gradually shifting to Logistics 4.0, a concept derived fr­om Industry 4.0. This new era of logistics is essentially based on the adoption of new-age technologies. The objective of Lo­gistics 4.0 is to automate processes, bo­ost efficiency, enhance supply chain productivity, reduce costs and errors, and im­prove workflow with other economic sectors interlinked to the logistics industry. In view of this, technologies such as artificial intelligence (AI), big data, blockchain and robotics are now displacing outdated processes in the sector.

A look at the key use cases of these technologies…


AI is altering logistics and warehouse procedures such as fulfilment processes, data collection and analysis, and inventory management. AI systems can reduce re­li­ance on manual work and help speed up, secure and smarten the entire process. This allows enterprises to offer on-time de­livery to customers. The technology is used to adjust orders and reroute shipments in transit. It can also be used to forecast demand by factoring in multiple considerations and past trends in an optimised manner. It powers processes such as last-mile logistics analysis and optimisation, supplier selection, and workforce planning. Additionally, AI has introduced driverless and autonomous vehicles to significantly boost delivery procedures and reduce shipment costs. These vehicles transport goods from one location to an­other with minimum transportation risk and hassle. Other branches or applications of AI that have made inroads into the logistics sector include big data, machine learning (ML) and robotics.

Enterprises around the world are leveraging AI. For instance, Amazon automates picking and packing items in a warehouse logistics setting, using an ML algorithm. According to Forbes, this has help­ed reduce the company’s average “click to ship” time by 225 per cent, from 60-75 minutes to 15 minutes. A McKinsey study shows that im­p­lementing AI has helped companies dec­rease logistics costs by 15 per cent, while improving inventory levels by 35 per cent and service levels by 65 per cent.

Big data

The volume of data collected and exchan­g­ed is increasing exponentially with a rise in the number of connected devices. In the logistics space, the possible sources of data are weather and traffic, vehicle diagnostics and location information, economic chan­ges, developments in commodity production, customer data, and operati­o­nal and financial figures of companies. This data is being utilised and analysed by companies to identify trends, predict and avoid po­tential failures or disruptions, and develop alternative plans to meet specified schedules. The data can also be used to optimise transport routes to improve performance and serve customers better. Adding AI and ML techniques to data analytics can provide highly dynamic routing.

According to PwC, there will be no ot­h­er industry where so many industry exper­ts ascribe such high importance to data and analytics in the next five years than transportation and logistics – 90 per cent as compared to an average of 83 per cent.


Blockchain significantly reduces bureaucracy and paperwork. For example, a multi-stakeholder process involving leng­t­hy paperwork can be automated by storing information in a tamper-evident digital format with no clerical errors. Distributed and decentralised public ledgers also provide data to companies for tracking the mo­vements of goods and planning simplified routes. Technology can be used to track the life cycle of goods and ownership transfer from the source to the end consumer. In addition, blockchain enables sm­art contracts wherein services that typically require an intermediary such as insurance, legal, brokerage and settlement services can be automated. Smart contracts allow logistics companies to enter binding agreements that will immediately dissolve if all agreed-upon conditions are not met. This increases transparency while reducing delivery time and costly errors. An­other application of the technology is in cross-border payments with high se­cu­rity and transparency. Companies such as Visa have launched their own block­chain-based business-to-business connect payment services, which help manage billing and payments. Further, blockchain can be used in dispute resolution over missing or late cargo, which is traditionally performed by independent auditors. FedEx has launched a blockchain-based ledger that collects information from shipping and receiving parties. This eliminates the need for a third party and minimises fraud attempts.

Cloud computing

Cloud environments are the new normal, especially in the logistics industry where constant data processing and exchange takes place. Cloud computing helps businesses streamline these processes at reasonable costs as they do not need to rely on traditional IT infrastructure. Cloud co­mputing solutions for logistics can be broadly classified into three main catego­ries: transportation management, inven­tory management and warehouse management. The transportation management system is a cloud-based application that hel­ps manage the transportation of goods by providing a real-time view of the transportation network and optimising routes. Meanwhile, the inventory management systems provide real-time information about stock levels, expiry dates and other inventory-related information. At the same time, the warehouse management sy­stem provides information about stock levels and locations of goods, and helps in optimising warehouse space and labour.

Drone delivery

Drones are transforming logistics and supply chains with various applications in warehouses, location technology, package delivery and inspections. A growing number of enterprises are turning to drone te­chnology to address inefficiencies in last-mile logistics as it can bring down operational charges, adopt faster air deliveries using shorter routes and reduce vehicular emissions, while providing on-demand and instant delivery to customers. As per market estimates, operating costs for a drone delivery service are 40-70 per cent lower than a vehicle delivery service model.

Gartner predicts that by 2026, over 1 million drones will be carrying out retail deliveries, up from 20,000 today. Major players including Amazon, UPS, DHL and Walmart have introduced drone delivery services on their platforms. In India, the Liberalised Drone Rules, 2021 aim at accelerating the commercial and industrial use of drones. Programmes such as “Dro­ne Shakti” and drone-as-a-service are also being promoted by the government.


In logistics, internet of things (IoT) is leading to increasing number of connections between goods, packaging, transpo­r­tation hubs and vehicles. It uses GPS devices, radio frequency identification  tags and barcodes to capture real-time data that helps in managing assets remotely, predicting risk, ensuring proper cargo handling and forecasting traffic congestion. When combined with blockchain, IoT can offer end-to-end visibility of the location of goods on their way to the warehouse, port or end-customer. In terms of communication, technology eliminates interruptions with widespread adoption of real-time digital engagement over analog methods such as phone, paper and fax. This leads to significant improveme­nts in resource allocation, shipment pro­cess and transportation costs. Further, IoT also includes temperature sensors for perishable or temperature-sensitive goods such as pharmaceuticals and food products. These sensors can be used to monitor factors such as temperature, humidity, light and vibration exposure during the en­tire transportation process from the warehouse to end the consumer.


Robots can improve productivity and safety by automating repetitive and physically demanding tasks. For example, they can be used to load, unload, sort, assemble, and pa­ck and unpack cargo. Robotics can also play an important role in inventory planning and monitoring. Robots equipped with sensors can keep track of inventory levels and report back to a central database, thus helping businesses keep track of their stock levels. Additionally, robots can be used to physically count stock levels and report any discrepancies. It is also predicted that in the future, robots may be widely used to deliver goods directly to customers.

Alibaba, with the world’s largest automated warehouse, has robots that collect and pack products for delivery to custo­mers. These robots currently perform 70 per cent of the work in the warehouse. The robots can lift up to 500 kg of goods as they move. Every robot has specific sensors to prevent collision with other robots or humans. They also have Wi-Fi to enable wor­kers to summon them when required.

Future outlook

Various innovations have already been introduced and new solutions are further developing, thus simplifying processes and stabilising supply chains worldwide. Mar­ket reports predict that by 2027, the global spending on digital transformation in the logistics sector is estimated to reach nearly $85 billion. That said, the logistics industry is perfectly primed for a technological upgrade, going forward. The future of logistics will certainly be digitalised, while also being agile, multifunctional and truly open. S