The internet of things (IoT) is a disruptive technology which is transforming the way the industries function by adding new, innovative capabilities, thereby creating efficient ways to operate. The concept of IoT can be dated back to the 1990s where technologies such as sensors, Radio Frequency Infrared (RFID), and wireless technologies were used for tagging, tracking, connecting, and reading objects.
With regards to the logistics industry, IoT is altering the way primary operations such warehousing, monitoring, routing, and delivering are performed. The main drivers for the increasing use of IoT technology in the logistics industry is the growing network of connected devices, continuous tracking, growing mobile computing, affordable sensor technology, and advanced cloud computing and big data technology.
Connected Logistics is a compilation of logistics solutions which makes the logistics activities transparent to the end users and the logistics providers. IoT is the backbone of connected logistics. Smart sensors, embedded technology and RFID devices are used in deploying connected logistics solutions which make the entire transportation process coordinated and visible. Sensors play a major role in the front-end data collection which can be further used for inventory tracking, monitoring fleets, tracking cargo, and off-board modes of transportation such as roads, railway stations, and ports.
Furthermore, the role of RFID is very crucial and its importance is not expected to decrease in the near future. The affordable prices of RFID-based devices are enhancing the use of IoT in logistics operations all over the world. Supply chain management is a key functional area of connected logistics as it helps in streamlining inventory management, theft analysis, and stock replenishment. Despite its enormous benefits, security is considered to be the biggest concern that has restricted its widespread adoption. Lack of standards and interoperability are the other factors that are inhibiting the growth of this market.
In the near future, MarketsandMarkets expects the connected logistics market to grow at the highest rate in the emerging Asia-Pacific region owing to factors such as internet ubiquity, smartphone penetration, and improved economic conditions. North America is expected to retain its position as the top contributing region in the connected logistics market, accounting for a market share of about 37% of the overall connected logistics market. This market is still at a nascent stage and is slowly gaining acceptance in all the regions at the highest growth rate observed in the emerging economies during the forecast period.
The global connected logistics market is expected to grow from USD 5.05 billion in 2015 to USD 20.46 billion by 2020, at a Compound Annual Growth Rate (CAGR) of 32.3%
Connected Logistics Market by Software (Asset Management, Warehouse IoT, Security, Network Management, Data Management, and Streaming Analytics), Platform, Service, Transportation Mode, Vertical, and Region - Global Forecast to 2021
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