6 ways 5G will accelerate possibilities in transportation and supply chain logistics.
The great 5G-fueled transformation has begun, unleashing new ways to reduce risk—and improve the bottom line—in transportation and supply chain logistics (T&L). Across the industry, leaders are embracing new technologies to increase employee productivity and supply chain efficiency.
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The future of logistics and supply chain management starts with 5G.
Today’s global shortages in everything from computer chips and medical supplies to common grocery items are directly linked to disruptions in supply chains—the intricate systems that connect manufacturing, transportation, and logistics to ensure goods and products go where they are needed.
The industry is looking to boost supply chain performance with 5G-enabled technologies in response to these disruptions. Success relies on unlocking value and managing operational risks, such as reducing the dangers drivers face on their routes or mitigating damage to or loss of assets.
For drivers, operators, and workers, communication and data are critical to efficiently transporting goods. Seamless connectivity is essential, with next-generation wireless networks like 5G expanding the capabilities of T&L technology.
Real-time communication powered by 5G enables T&L organizations to improve supply chain operations that are moving at peak efficiency while monitoring the health and safety of everyone throughout the ecosystem.
How 5G is transforming transportation and logistics supply chains.
Here are six ways 5G-powered solutions—and the data they deliver—are helping to save money, reduce risks, and advance the future of T&L.
1. Instant Communication with Supply Chain Partners
Geographically, the T&L ecosystem is disparate and comprised of many connected teams and assets. T&L encompasses carriers, distributors, and manufacturers beyond the operators who manage the physical transport of goods or people. Success depends on timely, effective communication through tools like transportation management systems (TMS), internal messaging services, and even SMS texts. Effective communication ensures that tasks are completed and transferred seamlessly from one point to another.
For T&L organizations, 5G technology unlocks the efficiency of communications among people, vehicles, and goods. And low latency delivers minimal delay between messages, allowing teams to surface vital data insights quickly. Real-time communication powered by 5G enables T&L organizations to improve supply chain operations that are moving at peak efficiency while monitoring the health and safety of everyone throughout the ecosystem.
McKinsey reports that data-driven digital transformation initiatives can create additional value of
10-20%
McKinsey reports that data-driven digital transformation initiatives can create additional value of
10-20%
2. Smarter Supply Chain Decision-Making
Increased worker demands, more data points, and an expanded scope of supply chain needs are changing the T&L ecosystem. Workers need access to real-time information and the ability to employ sophisticated supply chain technology to uncover insights from the data they produce daily. According to DAA Capital Partners, 93% of shippers and 98% of third-party logistics firms feel data-driven decision making is crucial to supply chain activities.1
As 5G supply chain technology evolves, organizations can use more data to help operators make well-informed, real-time decisions that speed up time to value. When data is synthesized and contextualized, it provides visibility, risk prediction analytics, forecasting, and accessible reports for the T&L ecosystem. Operators and managers can use this information to make better decisions about routes, maintenance schedules, and delivery times. McKinsey reports that data-driven digital transformation initiatives can create 10–20% in additional value.2
3. Fleet Management Optimization
Almost every segment and node in the supply chain produces accessible data that could reveal new opportunities to optimize fleet management. The key to boosting supply chain performance and maximizing output for fleets, operators, and workers is turning this data into insights for timely, well-informed decisions.
We can see this in transportation management systems. Timely speed and fuel usage data can help transportation companies optimize their routes and fueling times and identify more places to eliminate costly or inefficient steps. Recently, Samsara saw a 300% increase in API pings to its Connected Operations Cloud, with most pings routing to TMS.3 The cloud helps companies streamline processes and communications related to compliance, routing, and dispatch. Gartner reports that end users can expect an average savings from a TMS to be between 5–15% of yearly freight spend.4
5G logistics is also driving innovations in vehicle-to-infrastructure (V2I) technologies like freight signal prioritization. Prioritized connectivity facilitates fleet vehicles’ safe and efficient movement through intersections by optimizing traffic queues, stopping/holding conflicting traffic, and clearing congested traffic. This results in accelerated destination times, improvements in fuel efficiency, and better traffic management for municipalities through increased optimization and transparency.
20-30%
estimated productivity gains after pairing use cases like automation, robotics, and connected workers with 5G and other enabling technologies
These solutions are just the beginning. Accenture estimates that T&L organizations will experience 20–30% in productivity gains after pairing use cases like logistics automation, robotics, and connected workers with 5G and other enabling technologies.5
Onboard systems can instantly notify drivers of road hazards almost instantaneously to mitigate risk.
4. Better Safety Solutions
Driving is risky—especially when large vehicles and hazardous or flammable materials are involved. Add on the regular distractions that occur in the cab or on the road, and safety concerns become critical to the success and safety of drivers. Safety should always be a top priority because distracted drivers can easily put themselves and the wider public at risk.
Preventing costly accidents requires optimizing driver and operator experiences through data insights. 5G enables new levels of connectivity with faster speeds and lower latency within transportation technology—improving the delivery of data from sensors to dispatch and operations and, ultimately, back to the driver, resulting in productivity and performance improvements. For example, enhanced bandwidth drives the network speed needed to better capture and analyze video data from sensors within vehicles. 5G can also power machine learning to synthesize data for solutions like weather forecasting. Lastly, onboard systems can instantly notify drivers of road hazards almost instantaneously to mitigate risk.
5. Efficiency-Boosting Supply Chain Automation
In supply chain logistics, “automation” refers to process automation or bots that perform repetitive tasks, create efficiencies, and reduce costs. Automation in T&L entails everything from drones that conduct deliveries and tools that parse and pull data or simplify invoicing to robotics that increase warehouse operations productivity and improve workers’ safety.
Connected and automated vehicles could save 4,000 lives, prevent 210,000 accidents, and save the industry $3.6 billion in collision costs every year.
According to Deloitte, 80% of T&L organizations leverage or plan to leverage robotics to automate repetitive tasks.6 Housing developer Hillwood recently tested mobility solutions, like automated freight, in its Mobility Innovation Zone (MIZ) in Alliance, Texas. They found that logistics automation can help companies address driver shortages in the U.S. (over 60,000 in 2018 and expected to grow to 160,000 by 2028).7 Driver-related expenses are the highest cost for trucking companies and account for approximately 28–50% of revenue.8
Automation will also generate new revenue growth opportunities for T&L by allowing employees to shift away from manual tasks, placing the focus on reskilling and upskilling workers with industry expertise. 5G can enable immersive on-the-job training, with gamified, structured learning through connected devices using Augmented or Virtual Reality (AR/VR) transportation technology. This allows drivers, operators, and workers to learn at their own pace and according to their own schedules—wherever they are. Additionally, automation can power exciting new solutions, like remote maintenance, which helps transportation companies keep their fleets operational and on the road via monitoring systems and intelligence tools.
Over time, large-scale logistics automation will increasingly protect drivers and handle the transfer of goods and products. Connected and automated vehicles could save 4,000 lives, prevent 210,000 accidents, and save the industry $3.6 billion in collision costs every year.9
6. A Powerful Foundation for Future Innovation
The future of T&L will rely on 5G’s ultra-low latency and seamless connections between networks, devices, and environments to exchange data. Today, 5G surpasses 4G performance in terms of bandwidth, and network expansion will provide access to new levels of speed and reliability to support new use cases.
Eventually, 5G will support cellular vehicle-to-everything (C-V2X) to make road travel less dangerous, reduce environmental impact, and enable smart infrastructure for safer and more efficient operations.
A key benefit of 5G is the ability to support simultaneous connectivity—encompassing potentially one million connections per square kilometer. This dense connectivity is crucial to implementing industrial Internet of Things (IoT) applications, like visibility-bolstering asset tracking, performance-enhancing smart metering, and predictive maintenance. 5G is the backbone of bandwidth-heavy computations and video-based telematics services. Examples include supporting improved supply chain logistics security and goods-condition diagnostics or enabling networks of sensors and machines to capture data sets and apply artificial intelligence to surface insights via dashboards.
5G leverages always-on, low-power logistics technology devices to maintain a consistent feedback loop among vehicles, infrastructure, and mobile devices. 5G also assists in addressing last-mile challenges. Eventually, 5G will support cellular vehicle-to-everything (C-V2X) to make road travel less dangerous, reduce environmental impact, and enable smart infrastructure for safer and more efficient operations. Investments in intelligent transportation technology systems are critical because they create the foundation for vehicle automation and expanded telematics capabilities that will shape the future of T&L.
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1DAA Capital Partners
2McKinsey
3Fleet Equipment
4Freight Waves
5Accenture
6Deloitte
7Trucking Info
8Freight Waves
9Accenture