How IoT Is Disrupting Logistics

The IoT (Internet of Things) is a unique technology that will dramatically impact (actually it is already doing so) our daily lives and will have huge implications in the way we do and manage our businesses. One of the industries where this impact is being more obvious is in logistics.

IoT has the potential of transforming the logistics decision making processes, as well as the way goods are stored, monitored, transported and delivered to the customer. Furthermore, IoT creates a myriad of new opportunities and business models that we need to explore.

First of all, let us take a look at what IoT means and its influence in the Logistics sector. IoT is the networked connection of physical objects. Before the IoT, only computers were connected. Now, literally, everything can be connected to the Internet. When we connect these formerly unconnected devices, a huge amount of information is suddenly revealed, and we can take advantage of all of this information.

But, how important is the availability of having all this information provided by IoT devices in Logistics?

Cisco systems estimate that more than 50 billion devices will be connected to the Internet by 2020. PCs, tablets, and smartphones will only represent 17 percent of all these connections, the other 83 percent will be IoT devices (DHL Trend Research and Cisco Consulting Services; “Internet of Things in Logistics”). In addition, according to Strategy Analytics, there are approximately 15 billion devices connected to the Internet, but the number of devices that could benefit from an Internet connection would be roughly 1.5 trillion (Strategy Analytics, “Connected World: The Internet of Things and Connected Devices in 2020).


However, this can be seen as a low penetration rate, the truth is IoT deployments have grown more than a 300% since 2012. In line with it, we can expect IoT generating about 8 trillion Dollars in Value at Stake over the next 10 years, of which 1.9 trillion corresponds to the supply chain and logistics alone.

Two main factors are influencing clearly to leverage IoT in logistics. First, the obvious technology push we are experiencing, with smaller and more efficient devices, better communication networks and huge data analytics capabilities. Second, logistics customers are demanding solutions based on IoT technology (integrity control, shipment tracking, improved efficiency…).

As a result of all these incidents, the logistics industry seems to be in an excellent position to benefit from all IoT has to offer. IoT can connect several components in a supply chain and analyze the data provided by these components to get new insights, make informed decisions and apply corrective measures when needed.

Let us take into consideration some specific areas of the Logistics supply chain where IoT could improve efficiency.


With thousands of goods of different sizes, forms and typologies, a logistics operator´s warehouse is a clear example of an area with great room for improvement. Using RFID tags is a relatively easy way to implement smart-inventory management by having perfectly identified pallets with its content. These RFID tags can contain information such as volume and dimensions to determine where the most suitable place in the warehouse is for it to be stored. In addition, we can attach cameras to inbound gateways that could be used for damage detection by checking pallet imperfections.

Once pallets have been stored in the indicated place, RFID tags can transmit information to have real-time visibility of stock, avoiding out of stock and misplacement of any package. For products sensitive to temperature and/or humidity, sensors will monitor this variable and alert the manager when these levels are compromising the goods.

Not only can the pallets and goods benefit of IoT, Swisslog, a leader in the logistics sector, has implemented “SmartLIFT”. Combining sensorized forklifts with barcodes placed strategically in the warehouse, they created an indoor guidance system that provides the driver with accurate information about specific pallet locations, avoiding misplacement and inventory errors. By including new sensors (radar and/or cameras) and actuators to the forklifts it allows them to communicate with each other and check the surroundings to detect people or objects that may cause a collision. According to the U.S Occupational Health and Safety Administration, forklifts contribute to more than 100000 accidents per year only in the US, and almost 80% of them involve a pedestrian.

Freight Transportation

Freight transportation will be another important area where IoT will help logistic operators. The most common application is track and trace. Theft costs logistics providers billions of Dollars per year. Temperature, humidity, shock and specific sensor detecting if a box has been opened, enables the logistic company to gain full visibility on the goods’ status during its transportation. It will assure that the cargo arrives on time, to the right place and, of course, intact.

Secondly,  is not all about the cargo; what about the vehicles? What about the drivers? IoT is revolutionizing these aspects as well. Sensors can be installed in the oil system of a truck to determine when a piece of the machinery is degraded or damaged. This information allows the truck itself to determine whether it is time or not to go to the garage before any catastrophic damaged is caused in the engine. Back in 2012, DHL and Volvo implemented a system like this and found that truck availability increases up to 30 %.

Finally, IoT will play a role in the safety of truck drivers, preventing accidents that may have serious consequences. Strategically placed cameras can monitor drivers eyes and facial expression by looking for fatigue symptoms like excessive blinking or the diameter of the pupil. When these symptoms appear, the truck can tell the driver when it is the moment for a break.

Last-Mile Delivery

As the last step in the supply chain, Last-mile delivery is not an exception for boosting IoT solutions. Customers demand sophisticated services that IoT can help to supply successfully. One great example is DHL Parcelbox

Users can install a personal locker with a smart lock in the front door of their delivery spot and receive packages. Messengers have access to these boxes which are sensorized to indicate the messenger if there is any package to collect or not. In the near future, they will be able to include temperature sensors in the box to allow groceries to be delivered. Vehicles can be sensorized to determine things like the fastest route for deliveries, predictive maintenance, group deliveries in the same area… thus improving operational efficiencies.

In conclusion, a list of use cases along the supply chain have been presented, but the way IoT can change the logistics paradigm is not with isolated verticals. It is all about squeezing technology to its potential and creating an IoT ecosystem where everyone within the sector can benefit from.

Logistics has a huge fragmentation and a great number of legacy solutions. A strong collaboration between all parties is required  to overcome some of the key challenges:

  • standardization of identifiers and legacy solutions for tags
  • interoperability between several kinds of information systems
  • management dashboards
  • actuators and sensors
  • confidence in data generated and shared
  • privacy concerns

Nothing will happen without the most important thing (and probably the most difficult), which is to change the great organizations’ mindset, culture and processes to embrace this thriving technology and its huge benefits.


Article written by Miguel Ángel Fernández, Product Manager at Barbara IoT.