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Transport & Logistics

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Industry Digital Maturity

Transport & Logistics here is defined as including all supply chain activities such as transportation, transport related customer service, inventory management, flow of information and processing shipping & receiving, as well as warehousing, material handling, packaging, related information services and maintenance. Variously estimated size of this global industry is around US$ 8.2 trillion with a predicted growth rate of about 7.5%. The industry is highly fragmented and characterized by even the few dominant global players having small market shares (e.g., DB Schenker, the biggest European player has only about 2.1% market share) and a myriad of small to medium, mostly local or regional operations. The larger companies have the resources to acquire technology companies and traditional logistics organizations to offer more streamlined end-to-end services (e.g., UPS ‘s acquisition of Freightex a UK virtual logistics provider).The vast majority of logistics companies however, remain staid and according to BCG, a consulting company, “are plagued by underutilization of assets, old and inefficient manual processes, and outdated customer interfaces that serve to decrease response times.” Road freight in particular, which is a highly fragmented, low margin competitive business dominated by manual processes and is facing eroding margins and declining volumes. Unlike in other industries where web-based customer interfaces enable seamless, efficient, and fast transactions, road freight interfaces are generally outdated due to legacy IT systems and procedures remain lengthy with cumbersome documentation and lack of real-time cargo tracking. The good news is that this digital gap is being filled buy a host of new startups (albeit, with some being promptly acquired by larger legacy players) who are offering innovative technologies for analytics and integration through Fleet and Transport management systems, freight capacity and tendering marketplaces, multimodal one stop shops, etc. However, for digital transformation to take hold in this industry, there needs to be a more strategic approach implemented with organizational reforms and investments in new technology. In interviews conducted with 186 T&L senior executives in 26 countries, by PWC, a consulting company, only 28% say they’ve reached an advanced level of digitization. Overall, our assessment of digital maturity in the transport & logistics market is of the order of 35%.

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Case Studies

Digital Transformation in Transport & Logistics - CASE STUDIES

Cold storage firm Lineage Logistics uses IoT tech to reduce energy by 34%

Linear Logistics Services Trucking CalgaryMichigan based Lineage Logistics operates 120 warehouses in 26 states in the US, and in four countries globally. It handled about 25% of the third-party cold chain in the US in 2017 – or 35 billion pounds of consumer packaged goods and fresh food, in facilities measure around one million square feet. Temperatures at most sites have to be at around zero degrees, but some go as low as -20 degrees making its electricity bill one of its biggest line items, reaching tens of millions of dollars per year.


Its goal was to increase the food storage per square foot, while lowering its electricity usage at the same time. They needed some kind of a data-driven system, such as using IoT to give them the measures with which to drive efficiency.


The company engaged solutions provider /, which installed 3-15 smart meters per facility and sensors on top and bottom racks to the tune of 1,000 across its facilities to electricity readings at one-minute intervals. At first it tried the local Wi-Fi first but due to control and reliability issues, deployed AT&T’s LTE-M network and management platform provisioning everything with AT&T’s global SIMs.


Heat maps of the facilities were produced, enabling Lineage to see food is kept at the proper temperatures. The combinations of IoT sensors and data analytics helped to improve performance in three area:


Reduction in Absolute Energy: The IoT system collects temperature and humidity data from shelves across it facilities, and causes chiller systems and frequency drives to kick in when the shelf readings are out of tune. Since 2014, annual energy costs have declined by 8% at the 78 warehouses and throughput has increased over the same period reducing the cost of electricity for each item of food by 34 per cent.

Peak Energy Reduction: Utilities charge a higher rate during peak times, and offer a reduction during off-peak. The sensor-and-analytics system, enables Lineage to super-cools its warehouses at night (off- peak), to create a virtual cold ‘battery’ for use during peak hours without compromising food safety. This not only reduce consumption by 2-3 MW but also yield savings from lower effective tariffs.

Blast freezing helps to preserve the cellular integrity of certain foods during the freezing process and is critical at different times of the year. Lineage and developed a customized dashboard to track the process, and reduce the freeze time from 100 hours to 40 hours, and energy consumption by half.

Source: enterprise iot insights

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