Statista reports show that more than $2.3 trillion will be spent in 2023 for digitization.

Digital transformation in logistics can increase the visibility and connectivity of systems. It also helps resolve issues that arise due to asset underutilisation. Ecommerce logistics in Asia are expected to grow by 57% between 2020 and 2025. Going forward, other countries will consider Asia the most important region for logistics and global trade activities.

Digital Transformation Trends In Logistics and Transportation

Digital transformation is important in the logistics industry because it can help companies improve efficiency, reduce costs, and provide better service to customers.

Digital technologies such as automation, data analytics, and the Internet of Things (IoT) can be used to optimize supply chain operations, improve visibility and tracking of shipments, and streamline communication and collaboration with partners.

Internet Of Things

IoT technology in logistics can help companies improve efficiency, reduce costs, and provide better service to customers through automating processes, real-time tracking, and predictive maintenance. Interconnected devices help with asset management, enabling logistic providers to utilize their assets effectively. Following are some of the benefits that IoT brings to the logistics and transport industry:

• Autonomous Package Delivery

Automated robots can completely eliminate the need for human intervention in order fulfillment. With connected devices, warehouse managers can get detailed insight into order packages and delivery.

• Smart Warehouses

Smart warehouses with connected sensors help to locate items instantly. It greatly helps in improved asset and warehouse management. Connected CCTVs provide continuous monitoring while ensuring theft prevention.

• Digital Wearables

IoT provides real-time information on automated machinery that works alongside humans. With digital wearables connected to IoT sensors, any issues related to workplace safety can be addressed immediately. It will also greatly reduce the response time in case of any incident.

• Smart Inventory Management

IoT and interconnected devices provide more insight into supply and delivery. Warehouse conditions such as temperature, light, humidity, external environmental conditions, fleet performance, and new potential issues are readily available for automated inventory management.

Artificial Intelligence

Many companies that have used AI solutions were able to reduce their conversion costs by 20%. In logistics, AI solutions in supply chains aim to implement self-driving supply chains that can take on-demand decisions based on predefined rules.

AI systems can be implemented when there is a large amount of data that is complex and tedious to process. This is where ML can identify patterns from the datasets and implement rules to automate processing. AI and ML can be employed within logistics processes in these ways:

• Automated Warehouses

Warehouse automation projects can minimize the need for human intervention with robots performing repetitive tasks. AI-based warehouse automation technology is now sought after to expedite warehouse management. A streamlined solution can completely automate the entire process from getting orders to delivery.

• Route Optimization

AI-based dynamic routing systems can help drivers quickly reach their destination, reducing driving time. Such a system can evaluate constantly changing conditions for drivers, which is found to reduce at least 2-4 miles on average. This directly results in fuel savings and expedites the delivery time.

• Predictive Maintenance

An important part of fleet management is vehicle maintenance. Adequate and timely maintenance reduces downtime and increases the vehicle’s lifespan. Many sensors are now available to attach to vehicles for continuous monitoring. The data from these sensors are useful in training ML machines for predictive maintenance.

• Inventory Forecasting

Effective inventory management helps a company to improve visibility to automate restocking. The AI tools can provide a predictive inventory system to adjust the supply network based on demand.

The ML systems can be trained on data to include dynamic conditions such as sales, seasonal trends, promotions, and other data so that the logistics company can tackle understocking or overstocking issues.

It also helps in reducing procurement costs by automating the vendor selection process. The decentralized process can help with building a resilient supply chain.

Blockchain

The global blockchain technology demand in supply chain management is projected to exceed USD 3,153.7 million by 2028, experiencing a growth rate of 51.3% CAGR.

The pen and paper-based logistics industry was able to streamline the process with electronic CMR (Contract for International Carriage Of Goods By Road). The transparency improved by replacing hand-signed CMR with eCMR, ensuring assured delivery of goods. Blockchain will help logistics companies to advance further with smart contract-based e-CMRs.

• Improved Efficiency And Productivity

Using blockchain technology, freight and shipping companies can automate and revolutionize their delivery processes. It improves supply chain agility and boosts productivity. Customers can click on a button to know the entire journey of the products they consume.

The improved traceability also helps transportation companies to collaborate with partners efficiently. The immutable blockchain smart contracts ensure safety and delivery assurance, increasing process transparency.

• Fast And Secure Payments

Every action is documented and traceable when blockchain smart contracts are used in logistics. It greatly increases security, enabling faster and more secure payments. The immutable smart contracts can’t be changed by anyone else, so there is minimal risk of fraud.

Automatic payments can be set up on blockchain so that the supplier gets paid immediately once the buyer receives the goods according to agreed conditions.