Digitalization of Transportation and Logistics: Unlocking New Opportunities

Enterprise Mobility Digital transformation January 26, 2023

Logistics Through Digital Transformation

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 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.


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.

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Benefits Of Digital Transformation In Logistics

With automation in warehouse management, order fulfillment time is expected to go down to 30 minutes from 4 hours by 2028. Enhanced transparency with end-to-end tracking from warehouse to customer’s doorstep and insight into detailed data analytics encourage companies to adopt automation.

Some of the benefits are:

  • Reduction In Manual Errors

Even with computerized forms, manual data entry is prone to human errors, and illegible notes result in disputes between partners for transport companies. Digital transformation results in automated data uploads with GPS and time stamps. This greatly reduces errors, saving transport companies a lot of time and money.

  • Increased Customer Experience

The logistics industry is increasingly becoming customer-centric, focusing on customer satisfaction and experience. Insurance details, pick-up logs, freight accounting, and sourcing details are easily available. It enables consumers to track shipments in real-time and easily find any potential issues. When customers can trace goods directly to the source, it enriches their experience with reinforced business credibility.

  • Improved Agility

Agile business models are highly scalable and accurate. Automation speeds up business operations, minimizing human intervention. It allows human resources in the logistics industry to work on business innovation. Tailor-made Transport Management Systems (TMS) make it possible to expand operations seamlessly.

  • Minimal Carbon Footprint

One of the major contributors to CO2 emissions is the logistics and transportation industry. The fuel-intensive models can be upgraded by optimizing and automating driving and delivering technologies. The use of robots and self-driving vehicles can greatly reduce the carbon footprint of logistics companies. The saved costs can be used to further invest in decarbonising activities to reduce CO2 emissions.

  • Real-Time Data Access

Unlike paper-based transactions, digital transactions are available for tracking. It will be updated immediately once a transaction is complete. This increased transparency and real-time data access empower companies to monitor supply chain changes constantly.

Globally, 4 million commercial robots will be installed in more than 50,000 warehouses by 2025. Many leaders plan to automate warehouse systems in the next couple of years. Customized solutions for digitizing logistics and transport will undoubtedly expedite delivery and increase workplace safety.

Additionally, digital transformation can enable companies to offer new services, such as predictive maintenance and real-time tracking, to customers. Overall, digital transformation can help logistics companies stay competitive in an ever-changing market.

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Written By

A technology veteran, investor and serial entrepreneur, Mohan has developed services for clients including Singapore’s leading advertising companies, fans of Bollywood movies and companies that need mobile apps.

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