In today's fast-paced world, the logistics industry is undergoing major changes in their operations. With the advancement of technology, many logistics companies are adopting innovative techniques to optimize the supply chain. One of such latest trends is connected logistics. The term "Connected Logistics" refers to the concept of utilizing emerging technologies to build supply chains that are data-rich, fully transparent, and highly coordinated. Connected logistics is the integration of digital technology with the entire supply chain, creating a seamless, end-to-end network. This digital transformation is revolutionizing the logistics industry and creating opportunities for businesses to streamline their operations, reduce costs, and drive customer satisfaction. From manufacturing to retail, connected logistics is reshaping the way businesses operate and interact with their stakeholders.
Connected Logistics technology stands for a system of interconnected devices rendered by IoT solution providers to increase the operating competency in the logistics industry. Connected logistics technologies focus on regulation in monitoring, fleet management, asset management, and tracking warehouse management. This technology also consists of other associated logistics operations, such as order processing, financial transactions, dispatching, and shipping. Connected logistics establishes communication among all the involved parties and the enhanced level of information generation and real-time updates helps in preventing delayed deliveries.
According to TechSci Research “Connected Logistics Market – Global Vertical Size, Share, Trends, Opportunity, and Forecast Segmented By Component (Hardware, Software, Services), By Transportation Mode (Roadways, Railways, Airways, Waterways), By Vertical (Manufacturing, Automotive, Food and Beverages, Consumer Goods and Retail, Oil & Gas, Travel and Hospitality, Healthcare and Pharmaceuticals, and Others), By Region, By Competition 2018-2028,” the Global Connected Logistics Market was valued at USD16.28 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 14.48% through 2028.
The market growth is driven by various factors, such as adoption of third-party logistics (3PL), and rapid changes in recent years. A 3PL provider manages all aspects of fulfilment, from warehousing to shipping. Connected logistics is a partner or service provider which assists e-commerce merchants to outsource activities related to distribution and logistics. At present, third-party logistics is commercially available in varying transportation modes and service types, including domestic and international transportation management. Giant e-commerce companies like Amazon have huge in-house teams which act as their third-party logistics.
The market also faces certain challenges like globalization and geopolitical factors. Geopolitical factors like trade disputes, tariffs, and political instability can impact the smooth flow of goods and lead to uncertainty in the supply chain. 3PL providers must stay informed about these factors and frame strategies to mitigate their impact.
Around 90% of Fortune 500 companies use a 3PL.
Connected Logistics and Retail Industry
Connected logistics is transforming the retail industry by facilitating end-to-end tracking of products, which is enabling faster delivery times. The retail industry has always been at the forefront of adopting new technologies, and connected logistics is no exception. Connected logistics systems ensure that the products are tracked from the warehouse to the store shelf and ultimately to the customer, providing complete transparency in the supply chain.
One of the key benefits of connected logistics is its ability to optimize warehousing and distribution networks. By integrating sensors and real-time tracking technologies, businesses can gain greater visibility into every aspect of their supply chain operations, from the movement of raw materials to the shipping of finished products. This technology can help businesses reduce inefficiencies, improve inventory management, and optimize delivery routes and schedules.
For example, retail giant Walmart has implemented a connected logistics system that uses IT-enabled automation to route vehicles, optimize scheduling, and optimize fuel usage. By doing so, the company has not only been able to reduce delivery lead times but also reduce fuel usage, which in turn has had a positive impact on the environment.
Moreover, connected logistics software enable organizations to have complete visibility in their supply chain. With detailed real-time tracking of goods in transit, businesses can reduce inefficiencies in their supply chain by identifying bottlenecks and quickly responding to problems. This visibility also allows retailers to manage customer expectations better by providing them with accurate order delivery estimates.
Connected Logistics and Manufacturing Industry
Logistics and manufacturing are essential components of any industry, and they work in tandem to optimize processes and meet customer demands effectively. Connected logistics is playing a critical role in how manufacturing companies improve their supply chain efficiency. Connected logistics uses real-time data to increase flexibility in the manufacturing process and allows companies to effectively plan and execute operations.
Manufacturers are using connected logistics to address issues that have been prevalent in the industry for years. These issues include delays in transportation, supply chain disruptions, and inventory management. Connected logistics provides visibility into supply chain processes, allowing manufacturers to simplify their operations and save time and cost. This technology helps in reducing errors in the production process, improving quality, and enhancing customer satisfaction.
Connected logistics can aggregate data from different sources to identify patterns and trends in supply chain operations. Predictive analytics can help businesses in the retail industry to forecast demand, predict inventory requirements and optimize the supply chain. By analyzing customer behavior patterns, retailers can plan better and ensure inventory levels are always appropriate.
By making use of connected logistics systems, retailers can gain a competitive advantage, improve their sustainability, and secure a place for themselves in the eCommerce realm. As technology continues to improve connected logistics, retailers need to be adapting to the changes to stay ahead of the competition.
List of Companies Operating in the Connected Logistics Market
- IBM Corporation
- Intel Corporation
- Robert Bosch GmbH
- Cisco Systems, Inc.
- AT&T Inc.
Beyond Retail and Manufacturing Industry
Connected logistics is not only limited to the retail and manufacturing sectors. It is creating opportunities across multiple industries, including healthcare, transportation, and finance. In the healthcare industry, connected logistics is helping to optimize the supply chain, enabling real-time monitoring of drugs and medicines, and ensuring the patients' safety and well-being.
In the transportation industry, connected logistics helps in streamlining the transportation network, resulting in lower maintenance costs, increased fuel efficiency, and improved safety. By adopting connected logistics, fleets are lowering their carbon footprint by optimizing routes and reducing the number of empty trips.
Connected logistics is also transforming the financial industry by enabling banks to track and monitor cash movement, enhance facility management, and safeguard their customers' assets.
Enhancing Customer Service
Connected logistics can also be leveraged to enhance the customer experience and streamline the entire supply chain. By using technology like barcodes and RFID tags, businesses can track their products and monitor their location, allowing for real-time updates for their customers. This transparency helps businesses to better manage customer expectations, anticipate issues, and provide more efficient after-sales support.
For example, fashion brand Burberry has implemented a connected retail solution that uses RFID tags to track and manage their inventory. This system has enabled sales associates to locate items within the store quickly and accurately, leading to an improvement in customer service and satisfaction.
Improving Sustainability
Connected logistics has also been instrumental in improving the sustainability of the supply chain. By reducing waste and optimizing processes, businesses are reducing their environmental footprint and creating a more efficient and sustainable supply chain. This has a positive impact on the planet but also on the bottom line, as more efficient and sustainable processes often lead to reduced costs.
For example, food manufacturer Kellogg's leverages connected logistics to track the movement of its products from farm to store. This system allows the company to optimize distribution routes, reduce food waste, and track energy consumption, resulting in improved sustainability and cost savings.
Another way connected logistics enhances sustainability is by minimizing fuel consumption through route optimization. By leveraging advanced algorithms and real-time data, connected logistics can help businesses plan their routes efficiently, reducing the number of trips made. This reduces the carbon footprint of businesses and also saves on fuel costs.
Connected logistics can also assist in achieving sustainability through efficient inventory management. By leveraging data generated from IoT devices, businesses can track inventory levels in real-time and optimize replenishment schedules. By reducing excess inventory, businesses can cut down on waste and minimize the number of returns made, ultimately saving on shipping and handling costs.
Connected logistics also enables businesses to prioritize sustainability during the procurement process. By partnering with suppliers that prioritize sustainability, businesses can strengthen their supply chain by creating a more sustainable ecosystem. Connected logistics can also be used to track sustainability metrics, including environmental impact and social responsibility, enabling businesses to choose suppliers that align with their sustainability goals.
Reducing Costs
Finally, connected logistics is helping businesses to save money and become more efficient. By streamlining processes and reducing waste, businesses can reduce costs and optimize their operations. This can free up resources, allowing companies to focus on other areas such as product innovation or market expansion.
For example, car manufacturer BMW has used connected logistics to optimize the flow of its production lines. By using real-time data, workers can anticipate unforeseen interruptions and make adjustments to the production process, resulting in a reduction in manufacturing costs.
Future of Connected Logistics
Connected logistics is a continuously evolving industry that is creating ever-new opportunities for businesses. In the future, we can expect that connected logistics will drive better customer experiences by providing accurate, real-time data for decision making. We can also expect that the increasing collaboration between logistics service providers and their clients will allow for better collaboration and more efficient operations.
Moreover, the use of Artificial Intelligence (AI), Machine Learning (ML), and the Internet of Things (IoT) will continue to grow in the industry. AI and ML can be used to analyze the vast amount of data collected in connected logistics and generate predictions based on it.
Challenges that need to be Addressed
There are certain operational challenges which are required to be addressed for securing and improving connected logistics.
Simultaneous firmware + RTOS updates, real time device provisioning, and authentication across edge node population requires a robust remote device management system. Diverse sensors on commercial edge devices make use of multiple communication protocols like ZigBee, Wi-fi, BLE, etc. to send data feeds that are required by gateways to process.
According to TechSci Research “Reverse Logistics Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented by Return Type (Returns, Returns avoidance, Remanufacturing, Refurbishing, Packaging, Unsold goods, End-of-life, Delivery failure, Rentals & leasing, Others), By Service Providers (Third-Party Logistics (3PL) Providers, OEMs (Original Equipment Manufacturers), and Retailers), By Industry Type (BFSI, Manufacturing, Retail, Automotive, Others), By Region, Competition” the Global Reverse Logistics Market has experienced significant growth in the business sector, with a Compound Annual Growth Rate (CAGR) of 5.6%.
The market growth is driven by various factors, including growing emphasis placed on environmental responsibility and sustainability, regulatory compliance and legal obligations, and cost reduction and operational efficiency.
Reverse logistics is the process of managing and streamlining the flow of goods that move from the customer back to the manufacturer or retailer. This can typically happen due to a product being defective, damaged, or unwanted. Reverse logistics can involve a range of activities, including refurbishing, repairing, recycling, and disposing of products. In today's market, reverse logistics is becoming increasingly important as consumers seek more sustainable and environmentally friendly products. Managing the returns process efficiently and sustainably can help a company increase customer loyalty and reduce costs while minimizing the environmental impact.
The connection between reverse logistics and connected logistics is a two-way relationship. Reverse logistics is an important part of the supply chain and can help improve the efficiency and efficacy of connected logistics. For instance, efficient reverse logistics can help minimize inventory losses and facilitate smooth operations in the supply chain. Conversely, connected logistics can help reverse logistics operations by optimizing the route map of returned products, monitoring product damaged condition, or providing information about recycling programs.
In conclusion the Global Reverse Logistics Market is driving operational excellence and digital transformation on a global scale in the business landscape. As businesses embrace advanced technologies, integrate IoT platforms, and overcome challenges, the market is anticipated to witness impressive growth. The grow is likely to act as a catalyst for achieving energy efficiency, cost reduction and sustainable energy future in the business landscape.
Conclusion:
The connected the logistics market is just not about the Internet of Things but about the overall ecosystem which is typically evident in an integrated Internet of Everything approach. So, services, the cloud, security, big data analysis and several other third platform technologies are also included in it.
In conclusion, connected logistics has transformed the logistics industry and provides seamless, data-driven operations that drive down costs and improve efficiency significantly. It is revolutionizing various sectors such as retail, manufacturing, healthcare, transportation, and finance. Connected logistics is the future of logistics, and it will continue to develop as new technologies emerge, which will benefit not only logistics providers but also their clients and customers.
Connected logistics is reshaping the way businesses operate and interact with their stakeholders across multiple industries. From improving efficiency in warehousing and distribution to enhancing customer service and driving innovation, the benefits of connected logistics are clear. As the digital transformation of the logistics industry continues, businesses must embrace these technologies to remain competitive in an ever-changing landscape. By adopting a connected logistics approach, businesses can optimize their operations, improve sustainability, and reduce costs, making it an essential strategy for the future.