For any company to be successful, merely having a state-of-the-art production line and effective marketing and sales strategies is not enough; the logistics system has to be efficient too. Logistics is one of the most important parts of the supply chain, because it is what actually enables raw material, individual components, and finished products to reach their destination on time. With the competition increasing rapidly across all industries, companies are innovating their strategies to cut costs and drive revenue.
As a result, the internet of things (IoT) in logistics market is set to reach $100,984.5 million by 2030, from $34,504.8 million in 2019, at a 13.2% CAGR between 2020 and 2030, says industry research firm P&S Intelligence. IoT is an ingenious technology that allows devices to connect to the internet and with each other and share data wirelessly, without the need for human intervention. The applications of IoT in the logistics industry are quite vast, ranging from efficient inventory and warehousing management and internal business processes automation to quick delivery andproduct safety and quality maintenance.
The categories under the application segment of the IoT in logistics market are inventory tracking and warehousing, location management, predictive analytics, fleet management, self-driving vehicles, blockchain for supply chain management, and others. Among these, the demand for IoT solutions has been the highest for fleet management applications, on account of the need to manage maintenance and fuel costs more efficiently, have real-time visibility into the fleet, enhance driver safety, track driver frauds, and increase the lifespan and reliability of vehicles.
In the coming years, the blockchain for supply chain management (SCM) category is set to experience the fastest IoT in logistics market growth. By using blockchain for SCM, the distributed ledger technology is utilized for making logistics sustainable and ethical. Connected devices (IoT in the physical form), radiofrequency identification (RFID) tags, and quick response (QR) codes are being used with SCM and enterprise resource planning (ERP) solutions to track the journey of the product from the raw material stage to the final product being disposed of after use; blockchain makes this process more reliable.
IoT solutions can be deployed for all the above-mentioned logistical purposes via the cellular network, local area network, and low-power wide-area network (LPWAN). Of these, the provision of IoT solutions to logistics companies via cellular networks is expected to witness the fastest rise in the immediate future. The rapid expansion of the 5G network around the world is set to be instrumental in the preference for cellular network for IoT solution deployment for logistics purposes. 5G promises faster data transmission speeds and reduced latency, which would result in real-time traffic updates for drivers, allowing them to pick the best alternative route to cut delivery times.
North America currently holds the largest share in the IoT in logistics market, due to the fast pace of digital transformation in the region. In addition, the continent has witnessed the entry of numerous startups in the industry, thanks to the increasing penetration of the internet. On a similar note, the booming e-commerce industry is offering opportunities to logistics companies in the continent, who are deploying IoT solutions to make their operations more efficient and cost-effective.
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