Experts say ‘IoT’ will alter the freight transportation landscape in myriad ways

Bananas ripening perfectly in a truck trailer outfitted with sensors controlling the ripening gases that turn the fruit that rich canary yellow color that appeals most to consumers.

That is one of thousands of potential uses for the “Internet of Things” (IoT) line of innovative thinking that enterprises will be connecting assets and leveraging predictive analytics and advanced intelligence as part of digital transformation in freight transport.

And most importantly, what is the realized value?

“Ten years from now do you want to be that guy with obsolete equipment?” asked Ralph Rio, vice president of Enterprise Software of ARC Advisory, a leading technology research firm for industry and infrastructure.

Rio spoke at the Software AG Innovation Tour 2017 conference in Washington, where these technologies were examined as ways to leverage and digitalize industries, including freight transportation.

There are at least three technologies occurring simultaneously, he said. One is mobility in the cloud technology, Big Data and analytics and the IoT smart machines, Rio said.

Industrial IoT is expected to drive business value in factories, plants, facilities and trucks and trains, Rio predicted.  It will take information from facilities and provide efficiencies that help eliminate unplanned downtime to factories and refineries and improved reliability, he said.

But how will it play in transport? Is it reimagining the products manufacturers sell and driving usage-based business models? Is it monitoring the production line that is driving improved machine reliability and product quality? Or is it streamlining the supply chain that keeps factories running smoothly with reduced inventory? For many IoT plays a role in all of these examples.

Data quality improves because of it is electronically gathered, as opposed to manually. That helps eliminate unplanned downtime, which can cost up $31,000 an hour in a paper plant or $43,000 an hour in an automotive panel stamping plant.

Predictive maintenance can be improved with platforms that develop applications with services and utilities that are more accurate and sustainable. “It’s a much lower cost for predictive maintenance,” Rio said.

Some 82 percent of all assets have a random failure pattern, he said. That probability of failure can be reduced through increased IoT examination of these patterns to better do preventative maintenance in trucks, railroad cars and other transport assets, he said.

Before IOT there were three strategies for maintenance—reactive, preventative and condition based. With IoT, “prescriptive” and “predictive” maintenance can be scheduled based on specific equipment algorithms and modeling.

“The only way to successfully reduce unplanned downtime is with IoT and analytics,” Rio said. “That is the driver today.”

Some old-line transportation companies are in the midst of transforming themselves from heavy duty equipment companies to essentially software companies, Rio said.

Software has become a key competitive advantage for many products today. A $50,000 Cummins diesel engine that typically powers a Class 8 heavy truck today uses an intelligent and connected engine computer module. Now fleets are getting real-time operating data from the highway to better monitor operations in an example of the digital transformation under way in transport today.

“Having a viable IoT strategy is absolutely vital today for many old line equipment suppliers,” Rio said.

That will all help transportation companies reduce the number of maintenance personnel. The IoT also will help scheduled maintenance on a smarter schedule based on the proactively predictable failures in engines and other components. It will also lead to longer engine and asset lives, Rio predicted.

Companies with similar assets, such as trucking fleets and other transport operators, will be in a particularly strong position to use predictive analytics algorithms to better avoid costly repairs and delays due to equipment failures,  he added.

Amit Gupta, senior vice president of manufacturing and high tech at HCL, a $7.3 billion technical consulting and IT solutions company, said digital supply chains are already using analytics to drive efficiencies in manufacturing industries.

That is causing a “blurring of lines” between manufacturers, suppliers and partners and customers. The digital supply chain that is driving 21st Century manufacturing is experience driven, ecosystem driven and service oriented around the end customer, Gupta said.

The Burlington Northern Santa Fe Railway, owned by Berkshire Hathaway and Warren Buffett, is an example of a transport company undergoing a digital modernization using digital architecture and e-platform, Gupta said.

If the IoT craze proves as essential as its backers claim, the BNSF will not be alone among transports jumping on the bandwagon.