What 5G Means for the Transportation and Logistics Industry
Last week, the Department of Justice gave the green light to the long-sought merger of telecom giants T-Mobile and Sprint. While the merger of the #3 and #4 American phone carriers, respectively, still has legal hurdles to overcome, it is expected to accelerate the deployment of 5G networks in the U.S. For consumers, 5G networks will deliver faster upload and download speeds, and decreased latency (the time it takes for devices to communicate with each other over the wireless network) with wide applications to everything from entertainment to health care.
What does 5G mean for the logistics and transportation industry? There are both short- and long-term impacts that shippers, carriers, and 3PLs will need to prepare for.
Short-term: There’s a high stakes race happening right now to build out 5G wireless networks across the nation – this requires a massive, rapid roll-out of physical technology infrastructure. GlobalTranz currently provides transportation and logistics services to major telecommunications companies engaged in the 5G roll out, so we have a front-row seat to this effort.
Building out a nationwide 5G network with the broadest coverage in the industry takes an incredible amount of work performed by skilled workers and technicians that must have the equipment they need delivered to facilities exactly when it’s needed. Without the right equipment network construction stalls, expensive labor idles, deadlines can be missed, and competitors surge ahead.
Key to this roll-out is the behind-the-scenes logistical effort to orchestrate and carefully transport sophisticated, high-value technology to the right place at exactly the right time, unscathed, to fuel continuous build-out.
Long-term: 5G will impact supply chain and logistics by allowing more data to be transferred more quickly in real-time, in turn making increased visibility throughout the supply chain possible. As more and more devices throughout the supply chain and manufacturing process become part of the “Internet of Things,” they will produce an incredibly rich data stream that will send signals in real-time to trigger a wide variety of events. For example, using a 5G network, a parts tote could communicate that the tote is 80% depleted for this SKU which would trigger a re-order of the necessary parts. This would be a trigger across the supply chain which would result in warehouse movements, maybe LTL, consolidation, and finally distribution and delivery of re-supplies. The key to leveraging this wealth of data is implementing an extensive technology platform that can process it into insights that drive supply chain efficiency.
To grasp the true promise of 5G, imagine a truly “connected” supply chain, in which everything from the equipment that manufactures the product, to the truck that picks it up, and even the retail store shelf where it is displayed, is sending real-time signals that play a decisive role in driving production and transportation activities. For example, a stock out at the retailer level could send a signal to the manufacturer indicating how much of a given product is needed, where to manufacture it, and when it is needed, as well as triggering the dispatch of a truck, which in turn leverages enhanced data regarding available capacity, location of the truck, road conditions, and the performance history of the driver.
Reaching the critical mass required to make 5G a reality will not only require a proliferation of low-cost 5G devices. It will also necessitate the creation of standards that guide development and govern how these devices interact. As has been the case with blockchain, these standards can take time to develop and implement. While we in transportation tend to think in terms of enhanced visibility to the movement of trucks and how that impacts available capacity, pick-up and delivery times, and pricing, the effects of 5G will be felt throughout the supply chain.
Greg Carter is the Chief Technology Officer at GlobalTranz.