The promise of the Internet of Things is compelling different parts of the supply chain to work in innovative ways. Huawei Technologies and Deutsche Post DHL Group get that, and are crossing industry lines to work on a connected logistics solution.
The Chinese and German companies announced Feb. 14 that they signed a Memorandum of Understanding to work together on cellular-based IoT technology.
Huawei, an information and communications technology solutions provider, and logistics provider DHL will jointly develop a range of supply chain solutions for customers using industrial-grade Internet of Things hardware and infrastructure, according to press releases from each company.
The collaboration marks the organizations’ latest efforts to dive deeper into the lucrative IoT market, which is expected to enable users to better monitor and optimize supply chain processes with low-cost networked sensors and devices, they said. IoT could generate up to €1.77 trillion (US$1.9 trillion) in additional value for the global logistics industry by 2025, according to the companies. Meanwhile, the connected logistics market is expected to grow from $10.04 billion in 2016 to $41.30 billion by 2021, which represents a compound annual growth rate (CAGR) of 32.7%, a recent report from MarketsandMarkets estimated.
“Spending on connected logistics solutions is expected to more than double between now and 2020, and many logistics providers including Deutsche Post DHL Group have already begun to explore Internet of Things applications in their supply chains, including everything from enhanced asset tracking to driverless delivery vehicles,” said Markus Voss, DHL Supply Chain’s global chief operating officer and chief information officer, in a statement. “This MOU will allow both Huawei and Deutsche Post DHL Group to tackle complex operational and business challenges with a powerful combination of world-class Internet of Things hardware, networks, and expertise in end-to-end supply chain management.”
The companies will collaborate on IoT technology aimed at connecting large volumes of devices across long distances with minimal power consumption. Improved connectivity is expected to “deliver a more integrated logistics value chain by providing critical data and visibility in warehousing operations, freight transportation, and last-mile delivery,” they said.
Under the terms of the agreement, Huawei will make its IoT devices, connectivity experts and network infrastructure accessible to DHL; DHL will continue its efforts to incorporate greater sensing and automation capabilities into its warehousing, freight and last-mile delivery services, according to the press release.
Huawei and DHL will jointly market and commercialize their results and will pilot commercial projects in Europe and China, the companies said.
“Relying on Cloud-Pipe-Device Collaboration, Huawei builds an open, flexible, elastic and secure platform, helping customers easily integrate and develop applications tailored to actual service scenarios,” said Yan Lida, president of Huawei Enterprise Business Group, in a statement. This partnership opens up an opportunity to improve the efficiency, safety and customer service offered by global supply chains in previously-impossible ways, and defines how the Internet of Things will shape the fortunes of the logistics industry in the next few critical years of innovation.”
The deal widens DHL’s play in the young IoT-based logistics space. The logistics provider’s initial jump into IoT came in 2016 with its launch of a €90 million Advanced Regional Center in Singapore. The hub features an almost-entirely automated picking and storing infrastructure that performs 20 percent more efficiently than manual approaches, DHL said.
Competition in the space is considerable. Some of the key players in the IoT in logistics market include IBM, Microsoft, Intel, SAP, FedEx Corporation, XPO Logistics and Cisco Systems, according to MarketsandMarkets.