The effects of internet of things on the transportation cost management: a study of logistics company

Abstract

Purpose- The purpose of this study is to examine the Internet of Things (IoT) conceptually and structurally. In this regard, the study will examine the potential effects of the investments of the Internet of Things in the transportation operations of logistics, discuss the potential effects of the transportation costs of the Internet of Things and investments on control and Management. This study also analyze and evaluate such investments in a logistics company. Methodology- In order to examine the potential effects of IoT investments on the management of transportation costs, an interview was conducted with an Istanbul-centered company of logistics service provider in this study. The data were collected and evaluated by asking open-ended questions within the scope of qualitative research with an interview technique. Findings- It was determined that the company gained the advantage of real-time monitoring and controlling of the transportation operations, real-time monitoring of vehicles and drivers, monitoring of the thermal conditions of loads, monitoring and controlling of the incidents of losses and accidents through hardware and various technology like the Internet of Things (IoT) and integrated sensors to it. On the other hand, the study received comprehensive support of data from the company about the transportation process and the control of vehicles, loads, and drivers with IoT investments and the costs of transportation. Thus, the study obtained significant advantages for determining, calculating, and controlling costs. However, since IoT investments are new, and R & D operations for some integrated technologies continue in the company, the quantitative data that include cost advantages have not been formed yet. Therefore, a limited evaluation was conducted. Conclusion- Technically, IoT is a technology that connects the vehicles in transportation operations in logistics with smart networks. IoT enables complete control and real-time monitoring for transportation operations, and it can decrease setbacks and waiting during the transportation process. In this regard, it can increase the management power for the transportation costs by offering advantageous qualities, such as comprehensive data support and real-time monitoring for determining and calculating the transportation costs and controlling expenses or spending. Hence, IoT can increase value-added for transportation operations and provide competitive pricing advantages with its cost. Consequently, IoT investments can provide advantages like “offering a transportation service with high value-added to supply chains, decreasing the costs of vehicles and drivers, and optimal pricing” to logistics companies against their opponents. Keywords: Internet of things, transport operations, logistics cost, transportation cost, cost management. JEL Codes: L90, L91, M10