Digital Transformation in Logistics Industry – What, Why and How


One could assume that with the dawn of cyberspace which brought with it online shopping and deliveries, logistics as we knew it took a blow, since soft purchasing of tickets, downloading music or movies increased, as almost everything can be acquired online.

However, slowly but surely, logistics had to adjust in line with trends, and we can safely say that it caught up brilliantly. Not only it stayed put but it attuned to modern times, becoming part and parcel of one`s purchase, with its cost eventually featuring, enlisted and included in your final overall order.

The digital transformation of logistics is furthermore shown by impressive facts, as figures tell us that on any particular day more than 85 million goods are conveyed, which is in itself a feat to be recognised!

Logistics Industry Need to Go Digital – Here`s Why

Admittedly, the transition of logistics to digital was very slow, at least at first, but as businesses and competitors started to establish themselves and sell online, logistics had to move accordingly.

Technology firms, especially, were among the first to virtually portray their presence. This industry is worth hundreds of billions, thriving to ever increase their market share, so logistics had to adapt in line with the trends to remain significant in their sector.

Old logistics tools as we knew them, like AS400 green displays, back-office operations, and procedures are being digitally replaced by avant-garde gears such as big data, artificial intelligence (AI), machine learning, natural language processing, blockchain, and cloud computing which are powering the digital transition providing end-to-end visibility of the whole transaction or purchase.

These advanced technologies are benefitting all areas of logistics industry, including trucking transportation, conveyance via air and sea, supply chain management and shipment monitoring, resulting in greater efficiency in the supply chain, lessened expenses, decreased overheads and reduced miscalculations.

Moreover, the amplified effectiveness of logistics services subsidises the global economic growth.

Telstra Global & The Economist Intelligence conducted a survey to determine how well digital transformation is received across various businesses. Their assessment was carried out among 2,620 executives, from 11 dissimilar industries in 45 different cities globally. The study measures commerce confidence in the local environment`s capacity for digital transformation across five domains namely: innovation, entrepreneurship, financial environment, people and skills, creation of new technologies and ICT infrastructure.

From this survey, it transpired that industries that have the highest confidence in digital transformation are mining, manufacturing and financial services.

It is predicted that by 2027 global expenditure on logistics` digital transformation will reach $84.6 billion.

Reasons Why Leading Companies are Incorporating Digital Transformation in the Logistics Industry

Swift technology progress has drastically altered the dynamics of the logistics services sector`s competitive environment and forced reputable logistics service providers (LSPs) to go digital.

Logistics leaders like DHL, Supply Chain, FedEx, UPS, Samsara and others have already applied methods to generate, implement and distribute various technologies while supporting businesses in becoming more digitally advanced.

Areas for development and efficiency can also be pointed out by logistics companies, while tracking the transportation of goods in real time. It also empowers them to plot out their travel routes more professionally, taking into account potential interruptions, and ensign deliveries in case of vehicle loss or an accident.

Digital transformation in logistics also holds functions like geofencing, fleet tracking, route/fuel optimisation and precautionary upkeep, which can boost utilisation proportions while considerably lessen costs and time. Analytical reports, metrics and KPIs can capitalise on revenue, production and improve the efficacy of processes.

Benefits at a Glance

Competent logistics companies consider their switching to digital as a key factor in their business plans, and know that numerous projects and efforts are the results of these methods.

Here we list a few:

  • Using multi-mode tracking, an AI control tower can increase safety and delivery compliance levels to 99%
  • Standardisation of operational systems
  • Processing of paper documents in logistics management
  • Introducing AI-powered track & trace features that enable ETA estimation while digitising interactions with partners and customers through platform
  • Using predictive analytics to make the most use possible of their systems’ resources
  • Automation of essential transport, warehousing, and value-added logistics activities
  • Digitising back-office operations

How Digital Transformation is Changing the Logistics Industry

It is tough for industries to cope with modern issues, let alone a global pandemic and the ever-erratic consumer behaviour. All of these take a toll on the business ability to stay innovative.

A study carried out by the Federal Emergency Management Agency (FEMA) shows that after a catastrophe 40% of small businesses never reopen, and 20% of those who do, collapse within 1 year. Thus, the need was felt for digital transformation, empowering industries to become more robust and prepare better for any event.

For this purpose, the digital transformation contributes by offering a myriad of features, among which we name the most prominent:

IOT (Internet of Things) Integrated Supplied Chain – internet-connected physical gadgets are called IOT. In logistics these are utilised to reinforce and trace fleet administration, accelerate demand valuation, predictive maintenance, boost limpidity and visibility, and augment real-time inventory

Behaviour Analytics & Customer-Centricity – businesses may track user behaviour across platforms, utilising customer dynamics, path analysis, cohort analysis and data mining, providing visibility into the whole first-mile to last-mile journey

In Conclusion

It is evident by now that following the trend of digitalisation of almost all trades, the logistics industries had to follow suit. It has become necessary, in demand and on the increase, with modern digital technologies being the tools that enable this procedure.

There still exist businesses, albeit a small percentage, which are resisting this digital transformation, but perhaps they should really reassess in order to gain the various remunerations which ultimately affect their costs and time.

The majority of logistics industries though did migrate to digital in line with today`s business requirements, and as a result of this and greater competition, the value and quality of products have levelled off, leaving the delivery speed as the only deciding factor for end users.