IoT investment is set to overtake cloud computing, security, big data analytics and other digital transformation technologies across the transport and logistics sector in the near future, according to satellite company Inmarsat.

Transport and logistics respondents reported plans to invest the greatest proportion of their IT budget on IoT projects over the next three years.

IoT has reached a high level of maturity across most organisations, with transport and logistics businesses now planning to spend an average of $3m on their IoT investments to 2024. While IoT accounted for an average of 6.6 per cent of a typical transport and logistics organisation’s IT budget between 2017 and 2020, businesses are planning to spend 9.5 per cent of their IT budgets on IoT projects over the next three years.

Planned investments in IoT are notably higher than those earmarked for other Industry 4.0 technologies, including cloud computing (9.0 per cent), security (7.3 per cent), big data analytics (7.1 per cent) and augmented reality (4.3 per cent).

In addition to receiving more investment than other technologies vying for IT budgets, the research also reveals that the mainstream adoption of IoT across the transport and logistics sector is already making a significant difference in terms of operational cost-savings to many organisations. On average, transport and logistics respondents report that IoT projects save their organisations eight per cent of their yearly costs. In the future, respondents expect to achieve an average of 14 per cent cost-savings in 12 months’ time, rising to 21 per cent in three years and 29 per cent in five years.

IoT budgets for the rail sector are noticeably higher than the average of $2.8m across all industry sectors, with an average planned spend on IoT projects in the next three years of $4.4m by a typical rail organisation. Whereas IoT budgets for the logistics sector are slightly lower than average, with an average planned spend on IoT projects of $2.5m by a typical logistics organisation. These compare with planned IoT investments in agriculture (£2m), mining ($2.7m), electrical utilities ($3.1m) and oil and gas ($3.2m).

“Although levels of planned IoT investments differ according to sector, geography and organisation size, all businesses we surveyed in transport and logistics have reported similar IT priorities,” said Steven Tompkins, director of market development at Inmarsat. “They have earmarked a considerably higher proportion of their IT budgets for IoT projects than most other digital transformation technologies. This trend is particularly evident in the rail industry and among the largest organisations surveyed in our research. Businesses are adopting and investing more in IoT to ensure tomorrow’s land logistics networks are safer, more sustainable, and more efficient than ever before.”

Mike Carter, president of Inmarsat Enterprise, added: “Our latest research reveals IoT is now the primary Industry 4.0 technology in which companies are investing over the next three years. The emergence of IoT as an investment priority for businesses, and the increasing level of cost-savings they expect IoT to deliver in the years ahead, clearly demonstrates how well-established a technology IoT has become in transport and logistics. However, there are still several significant areas for all organisations on which to improve to draw optimum benefits from the technology, namely securing reliable connectivity, improving data management and addressing their IoT skills gaps and security concerns.”

Despite already seeing rapidly increasing levels of IoT adoption, he said Covid-19 had emphasised the importance of Industry 4.0 technologies such as IoT for business continuity.

“With the world’s production and supply chains becoming increasingly interconnected and digitalised, those companies producing digital twins of their supply chains and sharing data, are the ones reaping the benefits,” he said.