The IoT-Powered Logistics Industry: Advantages, Applications, and Challenges

The IoT-Powered Logistics Industry: Advantages, Applications, and Challenges


IoT or the Internet of Things, is not a new concept. The term was first coined in 1999 by Kevin Ashton. Kevin had proposed a system that used RFID (radio frequency identification chips) to track products through a supply chain.  

Nowadays, IoT systems comprise many different sensors and devices. Unlike RFID chips, these devices can communicate with each other over the internet and work together to make an entire system function perfectly.  

The most common example of IoT for a smart homes. These houses have sensors that automatically turn on/off lights, fans, and air conditioning, depending on the time of day and whether an occupant is present or not.   

But their uses can encompass much more than that. Today, we are going to look at one specific industry that can benefit from the use of IoT: The logistics industry.  

In this article, we will examine the benefits, use cases, and challenges of implementing IoT systems in logistics.  

What Are the Potential Benefits of IoT in the Logistics Industry?  

Listed below are some potential benefits of IoT in the logistics industry.  


  • Logistics is a complex field. A lot of work goes into making a logistic operation successful. In business settings, logistics is defined as the overall process of procuring, storing, and moving resources.   
  • While simple in wording, it is a mammoth task that requires careful planning and consideration. There is a lot of human labor involved, and this results in human errors and lower productivity.  
  • With IoT implementation, a lot of tasks in the logistics sector can be automated to reduce the factor of human error. There are plenty of tasks that can be automated with IoT, but we will check them out in the use-case section.  

Improved Security  

  • With IoT, it is easier to secure storage facilities and vehicles. Any place where products must be stored for a long time is a prime candidate for crime. With IoT, it is possible to have cameras, thermal sensors, noise sensors, and other equipment in tandem to provide better security.    

Better Tracking  

  • A common problem in logistics is to keep track of all the goods that are being moved. This is more of a problem for multimillion-dollar companies that must deal with an enormous number of resources.   

  • With IoT, it is entirely possible to track each item in the pipeline, or at the very least track each shipment.   

What are Some Use Cases of IoT in the Logistics Industry?  

We checked out some benefits of IoT. Now, let’s see how IoT can be used in the logistics industry.  

Inventory Management  

IoT devices in retail industry can perform several different functions. IoT is just an umbrella term. Any device can be considered an IoT device if:  

  • It typically does not connect to the internet, but its IoT version does (i.e., sensors and actuators)  
  • Shares or uses data with/from other devices over the internet that enable it/them to work better  

Sensors like RFID (Radio Frequency Identification), NFC (near field communication), and even QR and barcode scanners are frequently used for inventory management.  

The IoT version of these devices helps track stock automatically. For example, there are RFID scanners at building warehouse entrances that automatically add or deduct items from the inventory when the relevant ID is scanned.  

QR codes work similarly. They are used when more elaborate actions need to be taken once an item is moved into or out of the inventory, such as sending an update message to a recipient. A device to scan a QR code is used to check in or check out the items out of storage, and the required action is automatically taken.  

The system can be configured to order more of something if its stock falls below a certain threshold.  

In logistics, such a system can be used to verify if there are enough items in a warehouse. This can be used to check if any items have been delayed or lost.  

Cargo Condition Monitoring

Logistics involve a lot of cargo transit, and part of that includes storage between transfers. Contrary to what many assume, cargo storage is anything but simple. Many types of products and resources cannot be stored under normal conditions.   

Food and medicine typically need to be kept in cooler temperatures, while electronics need to be kept in dry, magnetically insulated environments. There are many other examples of specific storage requirements.  

With IoT devices, it becomes a trivial task to monitor the storage conditions. Sensors that can check for humidity, temperature, light, and even smoke can be used in tandem to monitor storage conditions.   

If any of the values deviate from the norm, then the system can either adjust for it or simply raise an alarm.  

Fleet Monitoring and Tracking  

One of the most anxiety-inducing things in logistics is keeping track of the fleet. Fleet here refers to the regiment of cargo trucks, planes, and ships that carry cargo from one place to another.   

During transit, there are very limited ways of tracking which vehicle is where and what it is carrying. With IoT devices, it is possible to track both the vehicle and its cargo/inventory in real-time.  

An IoT GPS tracker can track the vehicle, and the information can be used for package tracking. The tracking information can be displayed on a website or application so that the people at the destination know where the shipment is.  

In this way, the cargo fleet can be easily monitored using IoT devices and systems.  

Smart Scheduling  

Scheduling is always a concern in logistics. After all, warehouses only have so much capacity. They can’t hold goods indefinitely. So, it is paramount to schedule both the arrival and delivery of goods in advance.  

If scheduling is not done well, it can result in cargo vehicles getting stuck at warehouses due to their inability to unload. The opposite situation, where trucks are just waiting for goods that haven’t arrived yet can also occur.  

This can result in massive delays in the supply chain and disrupt the market. With an IoT system, it is possible to deal with these issues through smart scheduling.   

We have previously covered whether it is possible to track shipments in real-time. So, using that information, a smart scheduler can delay or speed up other tasks. For example, let’s say a warehouse is slower in processing the cargo and cannot offload it quickly. Instead of having trucks wait for the process to finish, they can be scheduled to do other tasks like:  

  • Doing deliveries,  
  • Getting their maintenance done
  • Helping other warehouses/depots in their region of operations  

Of course, much more could be done with such a system, but that would also increase the complexity of its implementation. The possibility is there, though, should one decide to avail of it.  

Challenges of IoT in Logistics  

As useful as IoT appears to be, there are a lot of challenges associated with the proper implementation of complex IoT systems. Let’s look at some things that make it difficult to set up IoT systems in the logistics industry.  


  • The logistics industry, by default, is quite large. It requires setups in different cities and states, including warehouses, depots, vehicles, and vehicle bays.   
  • Implementing an IoT system that can monitor, track, and smartly schedule all aspects of such a widespread setup is a gargantuan task.   
  • Let’s assume you succeeded in setting it up when your setup was smaller. You will still have more problems when you try to scale up the IoT system along with your logistics operations.   
  • Because of the higher complexity, you will need a bigger and more powerful network infrastructure, with powerful servers, to deal with all the data provided by the IoT devices. This just adds more work and requires bringing in experts as well.  

Security Concerns  

  • IoT devices are typically just sensors that have been fitted with some small computational devices that allow them to send their collected data to a server.  
  • Owing to their small size, they are woefully inadequate in memory, RAM, and processing power. This makes it extremely challenging to provide a software security solution that resides on an IoT device.  
  • As a result, IoT devices are a favorite attack vector for hackers.  One of the most famous examples of this is the Mirai botnet, which used many compromised IoT devices to launch DDOS attacks.   
  • As if that was not enough, IoT devices also lack hardware security features. If somebody can physically access an IoT device, they can compromise it and use it as an attack vector.  
  • While work is being done on these aspects of IoT, it remains a considerable risk, and logistics companies should assess whether they are willing to take on such a risk.  

Associated Costs  

  • The costs of installing, maintaining, and scaling an IoT system can be astronomical. The cost of the equipment itself is high, especially when you consider how many sensors you will need to buy. However, the cost of experts who will set up the system for you is also high because they are technical people doing skilled labor.  
  • Another thing that adds just more costs to everything is that you need to set up some network infrastructure. This includes your servers, relays, switches, and all the wires/cabling and wireless antennas that are required for network connection.  
  • That is another big expense. So, before you start implementing an IoT system, make sure to get a quote on how much it is going to cost you.  


IoT has a lot of benefits and use cases in the logistics industry. If applied properly, it can reduce delays, improve tracking, enhance cargo safety, and do many more things. However, it also comes with a set of issues, such as associated costs, security risks, and difficulty in scaling.   

As technology progresses, the challenges will naturally be addressed, and IoT will become common in different industries.    

Also, read: Case Study on Applying AI to Automate Quality Inspection in Manufacturing