The Internet of Things (IoT) is becoming prevalent within many different industries, and a new area of growth is being seen, especially in transportation. According to the IDC, the transportation industry has now become the second-largest segment investing in IoT with an approximate spend of $78 billion since 2016.
One of the key areas where this investment has been used is fleet management. IoT-enabled fleet management systems (FMSs) allow companies to receive real-time information of their vehicles, allowing them to make more informed decisions.
- Real-time tracking: IoT-enabled GPS trackers allow companies to accurately monitor a vehicle’s location at all times. The data is transmitted to a central system that sends real-time updates to an internet-enabled mobile device. This allows for quick responses to potential re-routes, avoiding subsequent delays.
- Smart inventory management: IoT sensors can be implemented across multiple warehouse and distribution centers. These sensors can track quantity of assets in each location alongside monitoring current conditions. This reduces the risk of human error and provides instant insight into the number of goods at each facility.
- Asset management: IoT can also be used for real-time asset tracking; sensors are used to track individual assets within a consignment to provide regular updates on location as well as other critical readings, such as temperature and humidity in cold chain logistics, and regulated consignments, such as pharmaceuticals. This is an especially vital feature for high-risk or expensive goods that need continuous monitoring in order to protect the asset’s integrity. Furthermore, these sensors can act as a form of quality control that provides highly accurate and consistent information to ensure strict health and safety regulations are met.
- Geo-fencing: Geo-fencing is an advanced form of GPS tracking that uses the coordinates of a particular area to capture the location of a device. It will send instant updates if a driver deviates from the approved route. This reduces the chance of a parcel being lost in transit and of the delivery being delayed, and it can also act as the first line of inquiry in a suspected transport crime.
- Real-time vehicle diagnostics: In on-the-road (OTR) logistics, vehicle efficiency is monitored in a similar way to an industrial manufacturing facility. You’ll find sensors and actuators much like those on a manufacturing line. Similarly, a huge amount of vehicle diagnostic data is generated. This data can be routed and consolidated into onboard computers, serving as an IoT gateway, from which data can be sent to cloud-based servers for analysis and instant decision-making by the fleet owner.
Reap the Rewards
Approximately, $20M was lost last year in revenue due to empty miles. Developments in IoT are allowing businesses to have more control over their fleet operations. Time is saved by choosing the best possible route, and real-time updates allow drivers to avoid congestion, reducing fuel consumption.
Costs can also be reduced by bringing down the number of lost or damaged assets, as well as the percentage of spoilage on any perishable consignments, as alerts are sent immediately when assets go outside specifications.
Transport companies are beginning to consider the environmental benefits IoT can provide. A study of 100 global transportation companies conducted by Inmarsat demonstrated that 44 percent were prioritizing environmental monitoring and 65 percent expected to become more sustainable in the future due to IoT implementation.
As the demand for travel continues to increase, so does the level of CO2 emissions, which are expected to increase by 60 percent by 2050. Therefore, companies are expected to reduce their carbon footprint as much as possible and meet the Climate Change Act legislation. This is particularly prevalent for the transportation sector as fleets travel thousands of miles and are a major contributor to CO2 emissions.
Car makers have already been set strict targets that must be met, and they will be fined €95 for every gram of CO2 that exceeds the target. We can expect that it won’t be long until logistic companies will be facing similar fines, so it is important to stay ahead of legislation. IoT-enabled technologies give companies the competitive edge to achieve environmental sustainability before regulations are put into place.
Future Predictions of Smart Transportation
Since Amazon’s introduction of their delivery drone, there has been growing discussion around autonomous fleets being the way forward. Drones are not the only option when it comes to autonomous vehicles, and autonomous trucks are very much a viable option, predicted to be a reality by 2030. Rolls Royce has even introduced plans to launch autonomous cargo ships in the same year. In the future, it is a possibility that the entire supply chain will be self-orchestrated.
IoT transportation, from a commercial perspective, is not the only movement; public transportation is predicted to integrate IoT into their operations over the coming years.
McKinsey has recently conducted a research project into future predictions of IoT applications in this field. Some of the key applications mentioned were real-time public transport information, digital payment, autonomous vehicles, intelligent traffic signals, smart parking, and predictive maintenance of the transportation infrastructure.
Each of these ideas are aimed at improving the current infrastructure to make the system more efficient and hopefully more reliable. Although major cities around the world have begun planning IoT implementation, Mckinsey predicts these solutions may only start coming into fruition in the year 2025.
Written by Mike Jeffs, Chief Commercial Officer, Hark