Digital Transformation in the Transportation and Storage Sector

This report examines digital transformation (DX) in the Transportation and Storage sector, enabled by the key technology groups that are the focus of Transforma Insights’ research. It focuses on the use of DX in supply chains including inbound logistics, outbound logistics, and warehousing.

Digital Transformation potential in the Transportation and Storage sector

Ever higher demands are being placed on supply chains of all kinds, driven by the emerging dominance of e-commerce and consumer (and regulator) requirements for new kinds of provenance information. Meanwhile, significant cost savings can be achieved in supply chains by better managing warehousing and inventory levels and delivery networks.

These same cost savings often correspond to significant sustainability benefits, helping in decarbonising digital supply chains. Meanwhile, condition monitoring of goods in the supply chain can reduce wastage, also unlocking significant cost and sustainability benefits. The digital transformation of supply chains should be a priority focus area for all organisations, large and small.

Seven key domains of change in the Transportation and Storage sector

Overall, we have identified seven key domains of change in the Transportation and Storage sector that are enabled by digital transformation. The seven key domains are summarised below:

• Location Management and Route Optimisation refers to real-time monitoring of location of transportation vehicles (including trucks, ships and railway carriages) and supply chain assets (including containers, cages, and more) to make operations more efficient.
• Condition Monitoring refers to monitoring of the condition of goods (especially, perishable and refrigerated goods) while they are in transit and after their arrival, to guard against theft, spoilage, and breakage.
• Supply Chain Transparency refers to capturing and sharing of data across supply chains and logistical networks (potentially using permanent immutable records of goods) so that all participants (including end consumers) can have transparency into how goods have moved through a supply chain and also the origination of input components and raw materials.
• Warehouse Management refers to technologies deployed in warehouses (including distribution centres and fulfilment centres) that make the processes automated, efficient and intelligent. This includes the use of automated guided vehicles (AGVs) and robots for automated picking, packing, sorting, and more.
• Inventory Management refers to the use of technology (such as sensors, drones, and machine learning) for efficient tracking, monitoring, and storage of inventory in warehouses to ensure optimal inventory levels.
• Last Mile Delivery considers the use of technologies to improve last-mile deliveries (the final step when the parcel is moved from distribution hubs to customers’ doorsteps). This includes smart parcel lockers, delivery drones, sidewalk robots, autonomous delivery vans and more.
• Supply Chain Planning and Operations considers the use of digital technologies to support supply chain planning operations ranging from demand planning, supply planning and coordination, and alignment of supply chain decisions internally and externally. This solution area particularly focuses on the use of digital twins to support supply chain planning.

Collectively, the activities listed above will bring significant changes to the Transportation and Storage industry.

Tracking the impact of 11 Digital Transformation technologies

The findings of this report were based on wide-ranging analysis of digital transformation in the Transportation & Storage sector, including analysis of sector Case Studies included in Transforma Insights’ Best Practice & Vendor Selection Database. This database includes over one-thousand case studies that collectively illustrate how new emerging technologies can impact enterprises in all sectors. At the time of writing, the database included 1,036 case studies in total, 136 of which are in the Transportation & Storage sector. The 136 case studies collectively provide 441 illustrations of Use Case deployments in the Transportation & Storage sector (since more than one Use Case can be associated with a single case study).

This report examines digital transformation in the Transportation and Storage sector as enabled by the key technology groups that are the focus of Transforma Insights’ research. These technology groups comprise:

• 3D Printing & Additive Manufacturing
• Artificial Intelligence
• Autonomous Robotic Systems
• Data Sharing
• Distributed Ledger
• Edge Computing
• Future Technologies
• Human Machine Interface
• Hyperconnectivity
• Internet of Things (IoT)
• Product Lifecycle Management
• Robotic Process Automation

Accordingly, the aim of this document is not to chart the future direction of the transportation and storage industry, but to highlight key areas of change enabled by new and emerging technologies. The bulk of this report is concerned with the discussion of these key areas of change, including an overview of each area, together with an analysis of the business impact, and associated with each area. We also identify key enabling technologies for each area (from the list above) and provide summary details of illustrative case studies that are available in Transforma Insights Best Practice & Vendor Selection database.

The purpose of the document is two-fold. Firstly, from the perspective of a practitioner working in the transportation and storage industry, the document highlights new and emerging changes that can be expected to impact the industry (particularly from the perspective of supply chain) in the next few years. Secondly, from the perspective of potential vendors for the transportation and storage industry, it highlights the key emerging areas of opportunity to sell new products, services, and solutions to the industry. Our analysis of the key technologies that enable each of the identified areas of digital transformation will help vendors of horizontal (technology-specific) capabilities to identify the contexts in which they may secure new business from the transportation and storage sector.

Specific exclusions from the scope of this report include integrated public transportation systems and digital solutions supporting smart mobility (both of which are separately covered in Digital Transformation (DX) in Smart Cities).

The analysis contained in this report draws significantly on Transforma Insights’ Best Practice & Vendor Selection Database and analysis of the transportation and storage sector Case Studies that are part of the database included in a section of the report.

If you have any questions about the content of this report or would like to speak with the author or any other analysts on any topic, you can make use of our Analyst Enquiries service by emailing enquiries@transforminsights.com.