With COVID-19 disrupting many industries, including manufacturing and supply chain, logistics tech appears to be the key to business stability and even its advancement. By adding transparency to transportation processes, accelerating goods delivery, and enhancing operational processes Internet of Things in Transportation has brought Logistics Tech to a higher level.  

Allied Market Research estimated that by 2023 global Internet of Things spending in Transportation is set to more than double, , with expenditure expected to reach nearly $330 billion.

Logistics Tech in 2020: Main Drivers

Due to technological progress and current challenges, including high customer demands and outbreak of COVID-19, today’s logistics and transportation industry experiences a rapid transformation.

The outbreak of the corona virus caused China, a leading industrial country, to shut down, thus throwing the global economy into an unprecedented crisis. In addition, measures taken to combat the coronavirus, such as social distancing, has greatly challenged the viability of many companies. For logistics, all this  was a major blow that forced the industry to rethink its business and transform its operations.

In order to meet the new challenges and stay afloat, the transportation industry strives to embrace logistics innovations that provide more visibility across transportation processes, measure operational performances, reduce downtime, decrease operating costs, and optimize road traffic. IoT, with its ability to connect devices, is the right key.

Internet of Things in Transportation ranks high among all logistics tech trends, according to Gartner.

“We are seeing more supply chain practitioners exploring the potential of IoT,” says Christian Titze, research vice president at Gartner. “Areas that IoT might have a profound impact on are enhanced logistics management, improved customer service and improved supply availability.”

Internet of Things (IoT), which we already discussed in our previous article, primarily refers to the network of interrelated computing objects, devices, and sensors that interact and exchange huge sets of data over the internet. 

The technology is about the creation, interaction, aggregation, and analysis, of data acquired from real-world objects with the help of sensors. Therefore, the value created by the IoT is governed by the flow of information through a system. 

IoT technology enhances and innovates the logistics domain, be it inventory tracking, environment sensing, fleet management or route optimization

According to the Boston Consulting Group cited by Deloitte “companies will be spending around 310 billion USD a year on the Internet of Things, with much of this spent in the manufacturing, energy and transportation industries».

Read more about IoT solutions in times of COVID-19.

Applications and Use Cases of Internet of Things in Transportation and Logistics

As in its very nature the logistics and transportation industry is about delivering goods from one point to another, its services can be split into two major groups – the «supply» and «demand»,with IoT technology finding its use in both of them.

The supply category refers to warehouses, where goods are stored and forwarded, the  transport network, and the vehicles/crafts that are used for goods delivery  from suppliers to warehouses or directly to customers.

IoT Applications and Use Cases of Logistics Supply

IoT Location Management

A major benefit of Internet of Things in Transportation is enhancement of overall visibility of goods movement. A transport, be it a motor vehicle, ship or train wagon, is embedded with sensors that send real-time data about transportation process to the main network system. Thus, an IoT system can track the location of shipments down to the individual units and alerts the users in case of unexpected events, like a jam on the road, or the location or status of the the vehicle used for transportation.

According to a Cisco study, 26% of companies surveyed say they have achieved success with their IoT initiatives.

IoT Location Management: Use Case

Softengi has developed an IoT-powered system for a Ukrainian logistics company that specializes in rail transportation. The system provides remote tracking of the location of the transported goods in rail wagons  that are equipped with IoT sensors sharing  the data with the IoT platform. The same platform is also capable of monitoring traffic units by providing information on how much fuel the vehicle consumes, whether it has exceeded the speed limit and even controlling the tyre pressure.

IoT Inventory Tracking

IoT-driven inventory management is the most widespread application of Internet of Things in Transportation and Logistics. This application allows to track inventory assets remotely, monitor their status, and thus, create a smart warehouse. Additionally, embedded in a vehicle fill level sensors help to avoid transport underload and overload.

According to Global Market InsightsInventory Management Software Market size crossed USD 3 billion in 2019 and is estimated to grow at a CAGR of over 5% from 2020 to 2026.Read more about IoT Analytics.

IoT Inventory Management: Use Case

DHL is actively using logistics tech innovations and implements an IoT transportation applications in its business operations. Among various IoT-powered solutions used by DHL is IoT Inventory Management. The IoT system tracks entire containers movement, monitoring container location and the carried goods condition. Additionally, sensors on goods items transmit data on location, condition (e.g. temperature), enabling visibility into inventory levels and enhancing the whole inventory management.

IoT Route Optimization

By providing real time monitoring of companies daily operations and taking into account such factors for example as varying restrictions, policies and drivers experience, IoT logistics systems allow to optimize traffic routes.

IoT Route Optimization: Use Case

UPS widely uses IoT technology for its logistics business in its operations. IoT Route Optimization one of the most efficiently used applications. UPS embraces IoT analytical system to improve its trucking routes. By tracking its vehicles, packages, driver patterns, UPS has saved more than $4oo million a year, claims Cisco.

“If we are detail-oriented, we save one mile per driver per day. In the course of a year, all drivers in the U.S. can save UPS $50 million”, says Juan Perez, a chief information and engineering officer at UPS.

IoT Applications and Use Cases of Logistics Demand

The Logistics Demand refers to constantly growing customer expectations. Both enterprises and individuals expect to get products faster, more flexibly, and – in the case of consumers – at a low or no delivery cost.

 «Manufacturing is becoming more and more customized, which is good for customers but hard work for the logistics industry. Add it all up and the sector is under acute and growing pressure to deliver a better service at an ever lower cost. »


IoT Logistics applications have proved to be the most effective solution in the demand category of the Transportation and Logistics industry, providing faster time-to-market, reduced defect rates, and customized delivery.

IoT Environment Monitoring

IoT logistics systems monitor the temperature at which an item is maintained, adjusting it when needed. This particular application is very useful for pharmaceutical products and perishable goods. IoT-driven sensors gain environmental data, such as temperature, pressure, light exposure, humidity, etc., allowing to remotely monitor and control the environmental conditions.

IoT Environment Monitoring: Use Case

International Airline Group, IAG Cargo, that specializes in freight transportation, applies an IoT-powered system, which is able to transmit real time data on a wide specter of parameters covering from light to precise temperature and humidity readings, providing IAG Cargo users with end-to-end monitoring.

“We can communicate a variety of data and information about where the cargo is and its surrounding conditions… The other exciting benefits that we offer include temperature and light monitoring. It’s not just the data, but the processes we’ve developed to respond to alerts and quickly set response protocols in motion. »

Randy Gould, Cargo Signal’s Global Director

IoT Predictive Analytics

Capable of gaining various real-time metrics, an IoT logistics system can analyze obtained data and make predictions. For instance, based on a constant flow of real-time information, the system can optimize routes, plan smarter deliveries, identify defects before something goes wrong, predicting inefficient equipment usage and even accidents.

Read more about IoT Analytics.

IoT Predictive Analytics: Use Case

Launching of an IoT-enabled software, based on IoT predictive analytics technology, allows G.E. Transportation, which provides rail services, to maximize train lengths, enhance train maintenance, and reduce fuel consumption.

IoT Threat Prevention

According to CargoNet, the US and Canada saw 554 cargo thefts with an average loss of nearly $207,000 per shipment in 2016.

With the help of IoT technology logistics companies are able to successfully prevent  losses, reduce frauds, and lower damage rate. In particular, IoT sensors can detect unauthorized container opening or any technical problems with a transport unit that are to be immediately fixed.

IoT Threat Prevention: Use Case

Intel employs its Connected Logistics Platform, where a large amount of data gathered from IoT sensors can be analyzed in order to prevent cargo losses as products move  through a supply chain.

“Thanks to data accessibility, shippers and carriers will be able to establish a more reliable supply chain network by having deeper visibility and information on shipments.”

Chet Hullum, GM for Industrial Solutions at Intel

Logistics Innovation Trends: Uberization

One of the main trends that now dominates the logistics software market is Uberization. This concept refers to a business model based on mobile technologies which allows users to easily get a needed service via their phones.

«Uberisation gains a lot of traction, recently. As customers are become more sophisticated, willing to get fasted and better delivery, logistics companies have to cope with high demands and offer advanced services. Uber for Heavy Equipment is a new cutting-edge trend, that makes transportation of heavy machinery more flexible.”

Serhii Chernyshov, Head of IoT delivery at Softengi

Uber for Heavy Equipment is a mobile platform that is used by logistics companies to offer their clients and customers a convenient way to find, select, and book a suitable transportation service for heavy equipment via an easy-to-use mobile application. IoT technology, in its turn, can track a vehicle or transported equipment, showing its movement in an IoT mobile application. Additionally, an IoT system can prevent vehicle overload, as well as measure the capacity of a transport unit and automatically evaluate whether the items to be transported fit in a chosen transport unit.

Read more about IoT for business.

Final Words…

Application of digital initiatives plays an important role in the highly competitive logistics industry. Internet of Things technology improves efficiency and transparency over the whole transportation cycle, keeping the operations run smoothly and seamlessly. Advanced fleet management, inventory tracking, environmental monitoring, as well as threat prevention are the most efficient IoT solutions in Logistics Tech.

Moreover, today, the logistics industry experiences a widespread trend towards uberization of transportation services. «Uber for Heavy Equipment” allows to easily arrange transportation of heavy machinery and, with an IoT system, track transportation cycles in real-time.


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