As we’ve discussed here in the pages of DHL Expressed, the Internet of Things (IoT) is beginning to transform the operational equation for businesses of every size, in every sector, across the globe. How is the IoT impacting logistics, and how will your company benefit? That question is the subject of a new DHL Trend Research Report developed in close collaboration with Cisco Consulting Services.

According to the report, the bottom line is this: The IoT has the power to revolutionize the supply chain, creating powerful efficiencies, maximizing cost-effective strategies, and expanding the ability of companies to elevate the customer experience – with service that is faster and smarter than ever before. Businesses stand to benefit from the generation of more than $1.9 trillion in supply chain and logistics “value at stake,” which is defined as a combination of increased revenue and lower costs that result among companies and industries when new connections are made.

As the Trend Report explains, the IoT can best be described as the networked connection of physical objects – an environment where products of every kind are connected to the Internet. These objects can track and transmit vast amounts of information about behaviors, places and activities, and they can provide new insights and incredible business value along the way. By 2020, it is estimated that 50 billion devices will be connected to the internet, up from 15 billion today.

In terms of logistics, the benefits are already being realized along the entire value chain, and in the future, these benefits will expand exponentially. Over the next decade, the logistics industry stands to realize entirely new levels of efficiency, harnessing the IoT to connect in real time with millions of shipments being moved, tracked and stowed every day. Here is a brief look at key areas were the IoT is redefining logistics.

Warehousing Operations

Companies that move goods know that faster and more efficient warehousing operations translate into increased profits and improved customer experiences. The vast amount of goods – and the different types of products – stored in a typical warehouse, however, present a clear efficiency challenge, but one that the IoT and smart-inventory management can certainly handle. Using low-cost, tiny identification devices to tag pallets and individual items in a warehouse, managers can locate and move items faster. They can employ sensors and internet-connected cameras to detect damage and monitor temperature and humidity levels, and they can rely on automatically updated data for accurate, real-time inventory control. The IoT can also drive “optimal asset utilization,” meaning that all of the machinery and vehicles in a warehouse can be tracked and coordinated using sensors so that they are used effectively and efficiently.

Freight Transportation

Today, it is already possible to track and monitor a single container in a freighter in the middle of the ocean. But in the next 10 years, the potential to monitor and safeguard ocean, air and road freight will grow tremendously thanks to the IoT. Location and condition monitoring will allow logistics providers to check on the status of individual shipments; sensors will even be able to indicate if a package has been opened or moved, allowing for a higher level of security. The IoT will also play a central role in managing transportation fleets. Sensors can monitor how often a truck or container is in use or idle, for instance, and this information can be used to improve efficiency. The IoT will also play a role in maintaining a fleet, and in improving safety for operators. For instance, long-distance truck drivers are often on the road for days, and cameras in the vehicle can monitor driver fatigue by tracking key indicators such as pupil size and blink frequency.

Last-Mile Delivery

As the Trend Report notes, the final part of the delivery journey – the so-called “last-mile” – and the collection phase are labor intensive and, in many cases, inefficient. The IoT, however, can help provide solutions that create real value for the end customer. Optimized collection from mail boxes, for instance, a process which relies on sensors placed in the box to detect if it is empty, creates efficiency by allowing a delivery person to collect only when necessary. In addition, new business models are in development to monetize and optimize the return trips that “last-mile” delivery drivers make – connecting them each time with new package pick-ups.

Perhaps no industry is better positioned to benefit from the IoT than logistics. And, every company that relies on logistics to succeed stands to gain.