The expansion of the e-commerce sector, which will account for a 17% share in global retail sales by 2021, has increased the incorporation of the internet of things (IoT) technology for enhancing the logistics ecosystem. The booming e-commerce industry, on account of the changing consumer behavior, requires fast and free shipping with competitive product pricing.
To keep up with this changing customer behavior, various companies have started adopting IoT solutions in their logistics activities to manage a sudden order rise, time-sensitive needs of customers, and inconsistent shipping.
The adoption of IoT solutions improves the efficiency of logistics operations, as they help in tracking the inventory and warehousing, monitoring the driver activity, allowing for smart location management, and updating the delivery status. The benefits offered by IoT technology are imperative for the success of any logistics company.
This realization will, therefore, increase the IoT in logistics market size from $34,504.8 million in 2019 to $100,984.5 million by 2030. According to P&S Intelligence, the market will advance at a CAGR of 13.2% during 2020–2030.
Additionally, the rapid digitization in the logistics sector is propelling the demand for IoT solutions. Logistics and trucking companies across the globe are using data analytics, telematics, self-driving, and robotic technologies to attain operational efficiency and combat issues such as the shortage of truckers. Besides, the integration of robotics in supply chain management, data analytics, warehousing, and machine learning has helped in solving the issue of labor shortage and enhancing technical efficiency.
Furthermore, the developments in the 5G network technology will fuel the demand for IoT solutions from the logistics industry. The 5G technology will improve the experience of drivers by providing better insurance coverage for vehicles and real-time traffic updates.
Moreover, this cellular network technology allows logistics companies to cut down the latency, thus ensuring higher efficiency in operations. Apart from this, the logistics industry also uses local area network (LAN) technology-based IoT solutions to improve its operations.
In the past, the North American logistics sector displayed the highest adoption of IoT solutions, on account of the rapid digital transformation in the region. Moreover, the emergence of new IT startups due to the surging internet penetration and expanding scope of e-commerce has facilitated the adoption of IoT technology in the logistics industry.
Besides, a surge in advertising and marketing activities pertaining to robotics, near-field communication (NFC), low-power wide-area network (LPWAN), artificial intelligence (AI), and radio-frequency identification (RFID) technologies and an increase in the efforts to educate and train professionals in these technologies widen the scope for companies offering IoT solutions for regional logistics companies.
This will be because of the fact that blockchain for supply chain management has the ability to replace conventional processes as it uses ledger technology that makes logistics operations sustainable and ethical.
Geographically, the market will demonstrate the fastest growth in Asia-Pacific in the coming years, as per the estimates of the market research company, P&S Intelligence. Rapid technological advancements in the logistics industry are the major factor fueling the expansion of the IoT in the logistics market in this region.