How Technology & IOT is disrupting the Trucking & Logistics sector

The predictable nodes of information are changing. The logistics assets itself are becoming a type of information system. In what’s called the Internet of Things (IOT), sensors and actuators embedded in physical objects-from roadways to Trucks -are getting linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet.

These churn out huge volumes of data that flow to computers for analysis. What’s revolutionary in all this is that these physical information systems are now beginning to be deployed, and some of them even work largely without human intervention.

IOT is expanding in ways which Transportation firms function – cutting costs, increasing efficiency & creating new revenue possibilities.

Broadly the IOT applications in Logistics can be classified into three categories –

Sensing Technologies, Processing Technologies & New Revenue Model technologies

Sensing Technologies

Processing Technologies

New Revenue Models

Capture Information across Logistics nodes

Example - GPS devices, Fuel Sensors, etc.

Analysing Big Data for data driven solutions.

Decision making based on analytics

Example – i) Fuel Analytics based on optimization

ii) Operational Planning & allocation based on Geospatial & status data

New business models leveraging IOTs across the logistics space

Example – Tech Platform for Trucks

Highest concentration of use case can be found in sensing technologies such as track and trace as the other two require an ecosystem approach. While Processing technologies require internal organisational change, New Revenue model applications have larger scale applications that must incorporate both demand side & supply side of logistics.

Some of the IOT applications coming up in road transportation are as follows –

Fuel Analytics & Optimization – Fuel comprises of around 40% of the running cost in Logistics. Fuel cost varies as high as 10% across states, fuel theft is widespread & fuel mileage is dependent on roads, routes and infrastructure.

New age start-ups are leveraging data from GPS & fuel sensors to build algorithms to Optimize refuelling points, track any pilferage & select routes to gain optimum marginal benefits. This has the potential bottom line benefits of ~2-3% to logistics companies.

Trip Allocation based on Algorithms – Every trucking does some Dry run of the vehicle from source location to Placement location. This can be as high as 300Kms. Trip based allocation algorithms enables auto allocation of nearest vehicles & also decision on rent vs own in case of companies that work on hybrid model.

Tech Platform – One of the biggest opportunities in Logistics right now is to leverage IOT to bring the entire ecosystem of trucks under a Tech platform. This opens a whole set of new opportunities to be bring facets like Service, Insurance, Resale, Standardized ERP Platform for MFOs (Medium Fleet Operators) & control tower opportunities under this platform. Each of them can be a separate revenue stream to be monetized at an appropriate stage. However, the stickiness will the platform

To date, again, few companies in any industry discovered how the IoT can create novel business models or new revenue, but logistics companies may be uniquely well positioned to quickly adopt just such models. However, deploying and expanding IOT capabilities requires more than just technological breakthroughs. It means establishing of whole set of business processes, rejig in organization design & human capital and a mechanism of continuous improvement. As of now the highest concentration is in sensing technologies.

Sumit Sharma
Co-founder of GoBOLT,
sumit.sharma@gobolt.co.in