Effect of internet of things on road freight industry

Abstract

Background: Evolution in global supply chain has created numerous complexities especially in the transportation of freight. Some of the complexities include ever increasing operational cost, long lead-times, limited end-to-end visibility and raw material supply disruptions because of adverse weather conditions. To improve processes and keep abreast of competition, it is vital for businesses to leverage their operations on current technologies. Internet of things (IoT) technology is one of the innovative technologies that can bring about radical transformations to freight transportation. Despite the promising capabilities of IoT, research on its application and effect on road freight sector in developing economies is scanty. Objectives: The purpose of this article is to establish the likely effect of IoT on the road freight sector. This article identifies IoT technologies used in road freight and establishes the relationship between the drivers and benefits of implementing IoT technologies. Method: Structured questionnaires were sent to employees working within the road freight industry within South Africa. The data were subjected to factor analysis for dimension reduction. Regression analysis helped to establish the relationship between drivers and benefits of IoT. Results: The benefits of IoT were operational effectiveness and improved decision making. The drivers of implementing IoT were identified as asset visibility and the need for real-time information sharing. The main effect of IoT on road freight sector is increased asset visibility. The challenges impeding implementation of IoT include high cost of installation, skills gap, fear of hacking and cyberattacks. Conclusion: Road freight transport managers are advised that IoT can be a strategic tool that uses smart sensor technologies that provide visibility of assets to reduce operational costs and improve decision making. The article contributes to logistics management literature by enumerating the IoT technologies used in the road freight sector in South Africa. It also highlights that IoT provides end-to-end visibility resulting in improved decision-making for optimal operations.