Logistics 5.0: 3 how IoT is driving a sustainable automotive supply chain

Logistics 5.0: 3 how IoT is driving a sustainable automotive supply chain

May 31, 2022

Have you heard of Logistics 5.0? Maybe you were just getting to grips with Logistics 4.0!

In a nutshell, Logistics 5.0 is all about how we continue to adopt the technology that brought us Logistics 4.0 whilst ensuring it is done in a sustainable manner. Sustainability in the automotive - and all other - supply chains has always been important to us at CHEP. We were amongst the first to think about packaging in a circular way by offering pooled and reusable pallets and containers. Since then, we have been constantly looking at ways to further optimize supply chains and find the technologies that will help us do that. 

One technology seeing an upsurge in usage and applications is the Internet of Things (IoT) and offers us a great entry point into Logistics 5.0. 

IoT isn’t just in the cars themselves, it runs right through the supply chain 

When you think of the IoT in the automotive industry, maybe your mind goes immediately to connected and autonomous cars – essentially the consumer end of the market.  

However, many other exciting IoT applications can be found in the supply chain that helps build those cars. Curiously, The Internet of Things as a term was coined by Kevin Ashton in 1999 - an innovator and consumer sensor expert - during his work at Procter&Gamble. He wanted to attract senior management’s attention to a new technology called RFID (Radio Frequency Identification) and its benefits for supply chain optimization. 

Not detracting from the technological leaps being made in automotive design and manufacture but, over 20 years on, it’s fascinating to see that one of the huge development areas for IoT is right back where it started.  

3 reasons why we see this more than in a disrupted and volatile automotive industry:  

1. Advances in internet connectivity  

There will be 41.6 billion connected IoT devices in operation by 2025, according to a 2019 IDC forecast. This multitude of devices will pump out a staggering 79.4 zettabytes of data. 

According to Statista, the global market for IoT - already sized at over 263 billion U.S. dollars in 2021 – will certainly benefit from that growth. It is expected to reach a value of some 1.11 trillion U.S. dollars by 2028. 

Such growth is largely due to advances in internet connectivity, mobile operator Ericsson stating that massive IoT technologies are expected to overtake broadband IoT and, by 2027, they will make up 51 percent of all cellular IoT connections. This is thanks to the benefits 5G can offer over and above other network technologies, and notably its ability to support a massive number of both static and mobile IoT devices, often with different speed, bandwidth, and quality requirements. 

2. The Impact of Covid-19 on the supply chain 

There is no denying that COVID-19 has brought much disruption and unpredictability to the supply chain, but these difficulties have also been a catalyst for the further adoption of supply chain optimization technologies, and notably IoT-based solutions.  

According to research conducted by mobile satellite communications company, Inmarsat, in 2021, 90% of transportation and logistics companies had accelerated - or planned to accelerate - the deployment of their IoT projects since the start of the pandemic. 72% of the transportation and logistics organizations surveyed at that time had fully implemented at least one IoT project, with the remaining respondents trialing or planning to implement an IoT project in the coming years. 

3. A climate agenda pushing for more sustainability from the transport industry 

Transportation is the fastest growing source of emissions worldwide, now accounting for 17 percent of global greenhouse gas emissions (Statista) and second only to the power sector.  

During COP26 in late 2021, we witnessed renewed impetus on the decarbonization of road transport and the development of electric vehicles. EVs sales of are on the rise and their arrival brings with it the single biggest disruption the automotive supply chain has ever seen. In rising to the challenge of net-zero transport, we also need to be agile and savvy enough to create together a reorganized supply chain that does not engender a massive carbon footprint.  

Add to this the Declaration on Zero Emission Shipping calling on the International Maritime Organization to align its target to full decarbonization by 2050, and all eyes are on the transport industry not just to develop zero carbon ships, trucks or cars, but equally technologies that can help move us towards zero emission routes. 

IoT uptake in the supply chain aligns with Logistics 5.0 and greater sustainability.

Sitting at the heart of global supply chains, at CHEP we are witnessing the way the world makes, movesmoves, and sells goods undergo a complete transformation.

Whilst being asked the agility to respond to consumers who want faster, cheaper, and easier transport solutions, businesses – and often those same consumers - are striving for a net-zero impact on the planet.  

At CHEP, we have come together with our clients in a collaborative initiative called Zero Waste World to find solutions that eliminate waste, eradicate empty transport miles, and cut out inefficiencies. With IoT technologies as one of the main facilitators of tomorrow’s sustainable solutions, here are three areas in which they are making a noticeable impact within the supply chain: 

  1. Tracking and Monitoring: Not an unfamiliar concept to the supply chain, but newer solutions offer ever more vital and usable data when it comes to things like fleet management, real-time location-tracking, storage condition monitoring, forecasting and inventory control. Based in Silicon Valley, BXB Digital (a partner company to CHEP in the Brambles group) leverages such IoT technologies to offer data-driven, end-to end collaboration through the entire length of the supply chain. Put simply, the better we all track and monitor goods as they move around the supply chain, the more reliability we offer whilst limiting loss, waste, and damage. 

  2. Connected Fleet Management: Tracking and monitoring all given assets at any one time allows for data collection that can be used to streamline logistics and transport solutions. IoT technology is being used by companies operating vast numbers of vehicles, connecting fleet management solutions to make the process more efficient. Much like inventory or warehouse management, these solutions use GPS technologies and real-time tracking to gather data on the locations and operations of their vehicles. At CHEP, servicing a multitude of clients with a pooling model, we use the same data to offer collaborative transport solutions. In 2021, and across 1,392 collaborative initiatives, we saved just over 87 million transport kilometers and 112,419 tons of CO2. And all thanks to the Internet of Things! 

  3. Route Optimization: Not a one-time activity, route optimization involves continually combining data collected over time with real-time data (all provided by IoT sensors) to help get the most out of a delivery route. Always having been about planning the shortest, fastest, and cheapest route without compromising on efficiency, these solutions are being favored now more than ever to reduce transport emissions. 

The future is already here 

As our society - and the technology that propels it forward - develops more quickly than before, what may have seemed futuristic and unimaginable just a few decades ago is already with us. With the rollout of 5G underway, our industrial future is set to be super-charged as these new networks will provide the infrastructure to facilitate massive IoT distribution, more powerful Artificial Intelligence (AI) and advanced automation and robotics. 

Moving forward, we need to be thinking not just about what we can do, but what we need to do. Not just for our clients, but for the planet. IoT is already bringing us solutions for both and that’s a discussion I, for one, want to continue. 

Simone Koch

Simone Koch Customer Service Automotive Europe & North America Director UK - Weybridge

Simone joined CHEP in 2005 and has had numerous roles across the Automotive and Pallets business units. She has worked in various departments within the customer service area with a strong focus on improving customer loyalty and customer satisfaction. During the last six years Simone has contributed successfully in several roles, supporting and leading the customer experience program for Automotive Europe. Simone holds a degree in Business Studies, majoring in tourism, and more than 12 years of customer service experience in the Automotive and FMCG (fast moving consumer goods) industries.

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Logistics 5.0: 3 how IoT is driving a sustainable automotive supply chain |CHEP USA