Imagine what the future of global logistics looks like with the Internet of Things (IoT) driving customs, fleet, warehouse, route, and security management.
Technology is revolutionising international trade. Small and large businesses are now using IoT to optimise supply chain visibility. Warehouse managers are also utilising smart equipment to increase efficiency and accuracy.
But that’s not all. There are numerous IoT opportunities to reduce costs, streamline imports and exports, and expedite the movement of goods across borders.
However, there are also limitations you should understand before adopting IoT solutions in your business.
In this article, Blackthorne explores IoT in global logistics, its key applications, benefits, and downsides. You’ll also discover the best practices to help you make the most of IoT and evolve your global supply chain for the future.
So, what exactly is the Internet of Things, and how does it work in global logistics? Let’s break it down.
What is the Internet of Things (IoT) in Logistics?
The Internet of Things is a network of interconnected devices with software, sensors, and other technologies that collect and relay data over the internet.
In logistics, IoT is an interconnection of RFID tags, GPS trackers, sensors, and other smart devices to monitor shipments, assets, and warehouse operations in real time.
IoT enables logistics teams to see what’s happening in the supply chain, measure its impact, and respond accordingly.
How then does IoT work in global logistics? Let’s dig deeper.
How IoT Works in Global Logistics
IoT is essential in various aspects of the global supply chain. Here are the seven key IoT applications in global logistics:
1. Security Control
Smuggling, unauthorised access, and cargo theft occur more often in transit than in warehouses, contributing to hefty financial losses.
IoT offers data-driven security solutions to improve the security of goods in transit and cut unnecessary costs. Such solutions include:
- Remote locking: Security teams can lock/unlock cargo containers digitally through authenticated IoT systems.
- Shipment tracking: IoT devices can record delivery activities from departure to arrival of goods, aiding incident investigations and insurance claims.
- Cabin surveillance: Cameras and microphones equipped with motion analytics can automatically identify theft attempts or suspicious activities.
2. Route Optimisation
Sanctions, accidents, and bad weather can increase fuel costs or delay the delivery of goods.
IoT is useful in identifying the most efficient, reliable, and cost-efficient route in the following ways:
- Traffic and weather monitoring: GPS devices and IoT sensors can provide real-time data on traffic and weather conditions. With the data, logistics service providers can make informed routing decisions, including avoiding adverse weather conditions.
- Dynamic rerouting: IoT-enabled systems automatically suggest alternative routes when unexpected disruptions such as entry restrictions or road closures occur.
- Smart route planning: By considering the nature of goods (eg, electronics, perishables, or hazardous substances), IoT helps determine the safest mode of transport and route.
3. Fleet Management
Fleet management refers to the strategic administration of a company’s transportation assets (users, drivers, vehicles) and operations to ensure goods are delivered securely, efficiently, and within budget.
Route optimisation is a key IoT application in fleet management.
Beyond optimising routes, IoT improves fleet control and asset longevity in the following ways:
- Asset management: IoT-generated data on asset usage, repair, and operational costs supports strategic decision-making. This includes determining when to service, replace, or dispose of vehicles.
- Automated vehicle maintenance: Logistics managers can implement automated maintenance scheduling with the help of vehicle health data provided by IoT sensors.
- Intelligent driver monitoring: By installing a monitoring system in vehicles, IoT can be used to observe driver patterns, identify risky behaviour, and implement effective solutions.
4. Storage Optimisation
Some goods operate efficiently when stored under specific temperature or humidity conditions. Additionally, if not properly stored, goods can be damaged or spoiled during transit, resulting in financial losses or unmet customer expectations.
To ensure safety and efficiently utilise storage facilities for goods in transit and warehouses, IoT can be applied in the following ways:
- Predictive storage planning: By identifying the type, size, and nature of shipments, IoT can predict where and how shipments will be placed at the warehouse upon arrival.
- Dynamic space utilisation: To avoid overstacking or understacking, warehouse managers can track the usage of shelves, containers, and racks to facilitate redistribution or reorganisation.
- Smart inventory placement: IoT can identify the type, weight, and size of goods to automate their placement. This allows for safe stacking and easy retrieval.
- Ease of access: IoT can help pinpoint a shipment’s exact location in large warehouses or storage yards, speeding up retrieval.
- In-transit storage organisation: Shippers can track consignments involving perishable and high-risk goods to detect fluctuations in temperature, exposure to light, and mishandling of shipping boxes, allowing corrective measures.
5. Supply Chain Visibility
The global supply chain entails multiple stakeholders, intricate procedures, and extensive documentation. Without advanced technologies, validating insurance claims and ensuring financial accountability can be complex and erroneous.
The Internet of Things consolidates real-time data from storage, transport, and handling operations, supporting the following applications:
- Insurance claim validation: Real-time data on transportation conditions, security, and packaging of shipments can be used as objective proof when claiming insurance compensation.
- Financial accountability: By tracking inventory value, freight costs, and losses at every stage of the supply chain, IoT ensures transparency in billing and auditing.
- Compliance verification: Integrating IoT data with customs and export control systems can help confirm adherence to trade restrictions and regulations.
- Advanced shipment integrity: With real-time tracking of shipments, IoT lowers the risk of unauthorised access, delayed delivery, and damage.
- Logistics transparency: With a centralised platform for logistics operations, IoT provides unified data to manufacturers, carriers, regulatory authorities, importers, and exporters, improving decision-making.
6. Warehouse Management
Various risks are associated with warehouse operations, including:
- Natural calamities like fire, flooding, and adverse weather
- Damage due to incorrect handling
- Exposure to harmful substances
- Inaccurate inventory information
- Inefficient space utilisation
- Equipment failure
- Employee injuries
Here are some of the ways IoT can be used to lower such risks:
- Automating warehouse operations: Conveyors, IoT-driven robots, and sensors handle repetitive tasks such as picking, sorting, and packing. This reduces human errors, improves workflow efficiency, and operational safety.
- Predictive asset maintenance: Unloading and offloading equipment can break down, slowing down the warehouse operations. IoT can monitor and detect early signs of malfunction and recommend a maintenance schedule.
- Stock verification: IoT performs automated stock-taking to avoid human errors. This prevents overstocking and understocking.
- Inventory management: IoT tracks the exact location, quantity, and movement of warehouse inventory, enhancing accessibility, inventory accuracy, safety, and warehouse productivity.
- Safety and incident monitoring: IoT can detect fire, smoke, gas leaks, and changes in temperature or humidity, which can endanger staff or inventory.
Wearable IoT-enabled devices can also monitor exposure to hazardous conditions, ensuring timely intervention.
7. Compliance Tracing and Tracking
Goods in transit can experience export diversion, leading to export control violations. But thanks to IoT, logistics service providers can ensure export compliance through:
- Route monitoring: Identifying restricted routes and destinations, confirming that exports and imports remain within authorised regions.
- Visibility to unauthorised access: Detecting unauthorised access to goods and providing real-time data for root cause analysis and problem solving.
- Digital audit trail: IoT-generated timestamps and location data can create verifiable records for customs, export control authorities, and IOR partners.
5 Benefits of IoT in the Global Supply Chains
Based on the applications we have discussed, IoT proves essential in nearly every aspect of global logistics. We have pointed out various benefits, including advanced security, transparency, accountability, and real-time visibility.
At a glance, IoT offers the global supply chains five key benefits:
1. Operational Efficiency
Automating key logistics procedures reduces manual errors, improves resource allocation, and ensures seamless movement of goods from the source to the destination country.
Additionally, real-time monitoring provides unified visibility, enabling the coordination of transportation, warehousing, and last-mile delivery processes.
2. Asset Optimisation
Tracking the condition, utilisation, and performance of logistics assets allows for strategic maintenance and disposal planning. This increases asset longevity, prevents unplanned downtime, and promotes asset productivity.
3. Enhanced Supply Chain Compliance
Data-driven verification of trade procedures, customs requirements, and export controls ensures adherence to export control regulations, lowering the risk of noncompliance.
4. Advanced Security and Safety
IoT enhances the security of goods through real-time monitoring, automated alerting, and data-driven risk analysis. These systems reduce the chances of damage, spoilage, unauthorised access, and regulatory noncompliance in transit and storage.
5. Cost-Effectiveness
IoT saves on costs in various ways, including:
- Reduced labour costs and increased productivity due to automation of repetitive tasks
- Lower fuel consumption resulting from route optimisation and predictive maintenance
- Lower risk of damage, spoilage, and noncompliance, saving on product losses and penalties
- Minimised downtime from equipment breakdown due to predictive analytics
- Lower administrative costs as automated reporting and digital documentation replace traditional paperwork processing
- Optimised warehouse space utilisation, reducing storage expenses
- Improved return on investment as unnecessary costs are significantly reduced
3 Downsides of IoT in Logistics
While the benefits of IoT are innumerable, there are also limitations to its usage.
These limitations include:
1. High Implementation Costs
Sensor installation, data integration, and cloud infrastructure management involve substantial upfront and recurring costs. Small and mid-sized businesses may struggle to justify these costs before realising returns.
2. Data Security and Privacy Concerns
IoT systems collect vast amounts of sensitive trade and operational data. Hackers can exploit vulnerabilities to access shipment data, track high-value consignments, or alter delivery records.
3. Cross-Border Compliance complexities
Import destinations differ in data storage requirements, import regulations, and technical standards for wireless communication. Implementing an IoT solution that achieves compliance across borders can be time-consuming and costly.
Best Practices for Maximising IoT in the Global Logistics
As a logistics service provider, you can overcome the challenges we have discussed and capitalize on the benefits of IoT in global logistics.
Here are the three key best practices to guide your implementation, along with the corresponding activities to conduct under each best practice.
Strategically Plan the Adoption Procedure
Manage upfront and recurring costs by:
- Conducting a feasibility analysis to assess IoT solution viability
- Choosing scalable solutions to accommodate future expansion
- Evaluating integration capabilities with existing systems
- Conducting pilot testing to validate performance
- Setting clear goals and KPIs to evaluate the performance
Develop Data Security Policy
Developing a robust data security policy prevents unauthorised access to data and data breaches. Activities you can consider include:
- Conducting a data risk assessment to identify vulnerabilities
- Defining a data governance framework that outlines access control, storage, and sharing protocols
- Implementing end-to-end encryption for data transmission between servers, sensors, and gateways
- Scheduling regular system audits and vulnerability analysis
- Ensuring compliance with global data protection standards
- Training staff on cybersecurity best practices and responsible data handling
Consider Expert Collaboration
For small to medium-sized businesses, partnering with experts can help cut operational costs. This includes:
- Collaborating with compliance experts to align IoT solutions with global trade regulations and documentation requirements
- Partnering with technology providers to facilitate the sourcing, integration, and maintenance of IoT solutions
- Leveraging managed security service providers (MSSPs) for customised data security solutions
- Working with international trade compliance experts like Blackthorne, who have the skills, capacity, and experience to handle the global logistics supply chain operations
Evolving Logistics with the Internet of Things
The Internet of Things is proving invaluable in the global supply chain operations. Coupled with artificial intelligence (AI), IoT provides the visibility and transparency you need to import and export even high-risk products to desired destinations.
Evolving with the data-driven requirements of global logistics translates to adopting IoT solutions in your business. Or collaborating with a logistics provider already leverages such solutions.
As a global logistics service provider, Blackthorne offers safe and compliant freight forwarding services, driven by expertise, experience, and data-driven technology.
We’ve set up the right systems, procedures, and experts to handle your cross-border needs with minimal intervention from your side. These include shipment monitoring, cost estimation and tracking, route optimisation, and coordinated logistics.
If you are looking for tech-driven, compliant, and risk-free logistics services, Blackthorne is your solution. You can call or email us at sales@blackthorneit.com so we can handle your shipment from dispatch to last-mile with a door-to-door delivery.
