IoT logistics visibility cuts costs & emissions

A recent study makes an arresting point: “In total, logistics emissions from freight and warehousing account for at least 7% of global greenhouse gas (GHG) emissions. Any successful path to net zero will thus need to address them as part of a company’s holistic environmental, social, and governance (ESG) strategy.”¹

A similar point is made here: “Transportation accounts for 37% of carbon emissions, with >30% created from fleet vehicles.”² Interestingly, the study goes on to note that fleet management solutions can reduce fuel consumption by “15% on average, and up to 25%.”³

Europe is a case in point, with road transport accounting for around 73% of transport emissions. “Heavy-duty vehicles,” which includes freight vehicles and passenger transports with more than eight seats, are the largest culprits.⁴ The scale of the problem is clear, yet transition to a cleaner future remains nascent – less than 2% of heavy-duty vehicles today in the European area are zero-emission.⁵ Even the ones that have made the change to zero-emission are overwhelmingly passenger carriers such as city buses. Freight carriers lag in this regard. This is especially important as road freight keeps growing: once reports are in, it is projected that 2025’s volume globally will total up to 16 billion tons.⁶ 

Given the focus on environmental issues, and the pressures corporates are under to address their own environmental impacts, reducing emissions seems a no-brainer for logistics operators that own and maintain large road-freight fleets. Most – if not all – major logistics operators will have ESG strategies by now. Reductions in emissions are part of the new reality, not least because customers and end users expect them.

However, there is a perception that these reductions – and ESG gains – come with a price tag attached. But what if there were measurable cost and efficiency savings that went together with lower emissions? 

The good news is that IoT-powered visibility across an entire road logistics fleet can deliver on all these fronts. This has an impact both on the ESG front, and on a company’s bottom line. To take just one instance, around 60% of logistics companies use AI-driven route optimization, which reduces fuel consumption by 10%–15%.⁷ Not only does this save fuel, but also less fuel burnt means fewer emissions. 

To study this in more detail, let us first consider the challenges operators face.

The cost of limited visibility

Logistics operators with large fleets of trailers and swap bodies – multimodal transport trailers that can be carried both by rail and by road – face the following issues, among others: 

Driver communication: Without a secure and efficient telematics solution – put simply, an integrated approach to sending, receiving, and storing information through telecommunications that enables the control of remote objects – the only feasible way to check where a driver is, is to call them. This is obviously less than ideal.

Goods tracking: A lack of visibility impacts what you can tell your customers. When transporting perishables, for instance in refrigerated containers (reefers), a lack of information regarding parameters such as temperature and humidity carries real costs. 

Excessive standstill times: Unplanned stoppages due to traffic or breakdowns can cause cascading effects through the network, which lead to further delays and costs.

Suboptimal utilization of assets: A lack of data across the network can lead to adverse outcomes that include the transport of empty containers and swap bodies, and inefficient route planning that increases fuel costs and ties up both drivers and boxes. A particular issue is when the asset is at its end-of-lease and must be returned. In the European market, this can be a journey of over 100 kilometers with an empty asset.

Security: Pilfering and outright theft are problems every operator faces.

Data across the chain helps answer all these questions. As Sharath Muddaiah, Head of Customer Success and Business Strategy, IoT, at G+D Mobile Security pointed out, “The delivery of reliable data – such as location, usage patterns, and timelines – enables businesses to make informed decisions and enhances security.” 

Increasingly, this reliable data is available.

Visibility offers data across the chain

To view the data, you first need the hardware that collects and delivers it to the operator. Ideally, the new generation of tracker devices should be smaller and more durable. Durability is valuable due to how much road traffic moves, and the conditions it encounters: from the weather, for instance, and during handling at depots and the like. Devices that combine low power usage with longevity would deliver cost-effective visibility across the logistics cycle. Further, they need to deliver all the information stakeholders in an increasingly complex supply chain require, including real-time location, temperature, etc. Finally, they need to be easy to set up and run. Sending an engineer out every time a tracker needs to be installed – or replaced – is expensive and creates emissions. 

Thankfully, advances in connectivity and device technology are powering a new generation of IoT-enabled track-and-trace solutions that deliver all these benefits.

At the back end, telematics solutions are now available that monitor and manage fleets so the operator has full transparency and control over its assets. In the best case, these solutions can be accessed through web browsers and as mobile apps, minimizing expensive integration with existing systems and software.

The data that the trackers provide can be utilized to deliver messages, alerts, and reports that can be tailored to what the operator needs to act upon. Real-time information can be channeled with existing technology into measurable efficiencies that include cost savings. 

As noted earlier, increasing numbers of fleet operators are using AI-assisted route optimization tools to deliver lower fuel costs and less emissions. Communicating with drivers through these systems saves on humans having to call each other to find out where everyone is. The possibilities multiply with use cases. 

Once the data is available from all those trackers in the field, the right platform delivers the visibility operators crave. Let’s delve deeper into the benefits visibility brings to the logistics cycle.

How visibility helps profitability

One immediate win that better tracking of goods along the supply chain delivers is lower delays and a reduction in consequent penalties. Simon Wakely, GVP, Global Head of Sales at G+D, noted that service-level agreements (SLAs) are the norm in logistics, particularly in markets such as Europe and North America. Late delivery of high-value goods carries strict penalties for the logistics provider. “Through providing greater visibility for one of our clients in the DACH region, we enabled them to save tens of thousands of euros annually in terms of late delivery and SLA penalties,” he said. 

Optimizing the utilization of assets is another standout success of greater visibility and more reliable data. Muddaiah mentioned a client with 720 containers, with an average rental cost of $6 to $8 per container, per day. The client simply didn’t know where the containers were. Many of them were sitting empty. Essentially, the operator was paying rent on dead assets. Outfitting those boxes with trackers and linking them to a system revealed insights over the course of a year that enabled them to reduce their fleet by 100 units, without reducing the operator’s productivity. “This saved them over $125,000 in the first year, and nearly half a million dollars over the first four years,” said Muddaiah. Larger companies with more extensive fleets can expect to save more.

More data on routes enables cost savings in terms of fuel as well. As mentioned earlier, end-of-lease returns can be costly and inefficient: Muddaiah pointed to a G+D portal that helps companies identify drop-offs that are closer to where the assets actually are, reducing fuel costs and driver scheduling.

The ESG case writes itself

In road logistics, efficient really does equal lower emissions. Route optimization through currently available technologies helps fleet managers plot the shortest and least congested paths from pick-up to delivery. This reduces the carbon footprint by lowering both fuel consumption and emissions. Further, more data means loads can be better consolidated. Assets can be filled to their capacity before they’re dispatched. In addition, an operator doesn’t have to send managers out into the field to track down their boxes, because they already know where they are. Geofencing also delivers immediate gains by lowering fuel consumption and reducing emissions through features such as idle reduction in a crowded depot. 

At the back end, G+D’s class-leading IoTgo^® Track-Fleet is a telematics platform that delivers on all these points, including real-time object tracking, alerts, and reports. Among other features, geofencing is available for improved route management and better security. It is available on web browsers, as an app, and can be delivered to other systems via its robust API. 

Interestingly, the tracker itself delivers measurable benefits through better use of technology. Long-life trackers, such as G+D’s IoTgo^® Track-Solar asset tracker, are designed to be robust and efficient. It makes its own power – as its name implies – delivering sustainability from the start. Crucially, even in the absence of sunlight, its battery backup can provide short-cycle tracking for more than six months. It comes bundled with out-of-the-box connectivity that makes it easy to install. Further, it is guaranteed for a lifespan of 10 years or more and requires few upgrades. Longevity is its own reward in this instance, with lower replacement costs matched with the emissions savings on fewer engineer visits. Even the long-life battery minimizes eco-unfriendly waste.

A more efficient and sustainable logistics cycle is beyond the “nice-to-have” stage. It is a necessity and is recognized as such by operators. Harnessing the growth of the IoT – and the various technological advances that have enabled it – can deliver measurable gains to a logistics operator. Lower emissions and a logistics cycle that is tuned to the sustainability demands of the future join up with cost savings and business efficiencies that promise to be transformative. 

Visibility across the cycle is the key to delivering all this. The best trackers working in tandem with the most efficient platform bring that visibility to logistics operators, and the customers who depend upon them. “The business case for IoT visibility has progressed beyond adopting the technology,” noted Muddaiah. “The question is how much inefficiency and emissions operators are willing to accept without it.”