THE INTERNET OF LOGISTICS

The Internet of Logistics is a global communication standard for shipping and logistics data, initiated by Ericsson and managed and developed by a growing number of logistics actors and institutions such as the IATA and the umbrella organization Digital Cargo Forum, for example.

The Internet of Logistics can also be described as a decentralized data sharing platform for logistics, which is based on the Internet principle and the Internet standard.

Somewhere along the line, while working on the 5G standard, the telecommunications company LM Ericsson realized that the logistics industry was for the birds.

UPS was operating separately from everyone else. So was DHL. So was PostNord. It was a sea of independent line-haulers and last-mile actors. A ton of warehouse and reloading hubs, ports, and shipping companies. And so on. Wherever you turned to look throughout the logistics chain, everyone was standing like a separate silo. They were all connected, just not to each other.

The Sum Could Not Be Bigger Than the Individual Parts

One of the consequences of this was that not just anybody could offer shipping, delivery, or storage services by plugging into a network and saying, “At your service.” If you were a carrier or private person driving a car and were “passing by anyway,” or if you felt like moving a few packages from A to B while you were out biking...

That was. Not. Possible.

There was no internet for logistics, so to speak. There was no platform for digital cooperation.

... the logistics industry ... needed a total digital makeover ...

So how would it matter if Ericsson supplemented the mobile phone network’s capacity with a system for the fifth generation network standard if all actors on the market were just running their own race and only using peer-to-peer communication?

Improved capacity for managing mobile data in the form of the new 5G standard has a high value anyway, just not to the logistics industry, which obviously first needed a total digital makeover, "said" Ericsson after it had explored how an avocado gets from Kenya to Sverige:

For some segments of the journey, it would have taken just as long to transport the avocado 1000 kilometers with a bike as it did to handle the shelf after shelf of shipping documents that were generated by and that followed the little fruit along its way.

Ericsson was focused foremost on trade across country borders—how the cocoa bean gets to the chocolate factory, so to speak—which is what people usually think about when they talk about a supply chain. LogTrade wants to emphasize, however, that the largest gain from providing the logistics industry with an internet is in how the “second half” of the distribution, between the factory and the consumer as well as from the consumer to the recycling center, can be changed when the role of the middlemen is altered in a fundamental way. Therefore, also read: The Internet of Packages

So What Is the Internet of Logistics Then?

A distribution chain consists not only of products that are being transported from the manufacturer to the customer but also of a flow of information. Since every shipment has to exchange information with several other actors, it becomes, like the avocado example illustrates, a very cumbersome process if data has to be sent in a comparatively ancient way.

Ericsson has hereby created fertile soil for a global, democratic, supply chain culture.

If all actors in a delivery chain are supposed to be able to act smarter, they all have to break loose from the silo structures and instead exchange shipping and logistics data via a virtual platform-based infrastructure for data exchange. That, in turn, requires a standardized data management model for shipping and logistics data.

Since this was nowhere to be found, Ericsson did two things:

  1. Initiated, in cooperation with around 50 other actors in the logistics industry, the fundamental framework of a global communications standard for logistics;
  2. Created a virtual platform, a so-called cloud or data center to give the standard a platform to start from. This is called Connected Logistics Chain (CLC) and can be accessed via a browser.

So the Internet of Logistics is both the name of the semantic data model standards AND the result that we hope the “new” way of exchanging data in the logistics industry will generate, namely a sort of world wide web for supply chains.

The Internet of Logistics is a process under development. During this process, it will be determined what kind of data the system should be able to handle, how the data should be handled, and who should be able to get access to the data.

Democratizing Logistics

The Internet of Logistics is also an open standard. “Anyone” can use it and apply it. The system is open to all established and non-conventional carriers and logistics partners. Ericsson has hereby created fertile soil for a global, democratic, supply chain culture.

It is democratic because it makes it possible to open up the delivery flows to and for everyone. At the same time, it is “only” a platform for cooperation. How good the concept will become depends on what we do with it.

With the Internet of Logistics as a foundation, LogTrade, and others like us, can create a system that means you no longer have to own your own transports, invest in a massive digital infrastructure, or make large capital expenditures in order to take control of the logistics chain and implement a logistics flow that works in a sensible—not to mention sustainable—way. That is our mission.

When Will the New Logistics World Order Fully Bloom?

The new standard was launched in October 2018. As the number of actors that use the Internet of Logistics and the amount of data grow, so will its power. The process, or journey, is the same one that has made the Internet into the World Wide Web that we all know “it” as today.

You can read more about the IATA’s work to develop the standard here: One Record.

Read more: What is The Internet of Packages?