At a time when same-day deliveries, real-time tracking, and agile supply chains are becoming the norm, it is easy to focus on innovations such as automated warehouses, self-driving trucks, and drone deliveries. However, beneath these headline-making trends and technologies is an often-overlooked but vital foundation: digital infrastructure.
It is not surprising that 70% of logistics companies have embraced digital transformation and are reaping the benefits of doing so. It is also no surprise that the global digital logistics market size is expected to grow at a CAGR of 18.1% from $37.64 billion in 2025 to $120.33 billion in 2032. Find out more about the core components of digital infrastructure and how they are shaping logistics.
Cloud Computing
Cloud computing allows businesses to move away from rigid on-site IT systems and toward scalable, agile platforms. With cloud computing, these platforms can handle massive volumes of data and support collaboration in real time.
Cloud-based transportation management systems (TMS) and warehouse management systems (WMS) offer logistics companies access to integrated workflows, predictive analytics, and real-time data. Businesses like FedEx use cloud technology to track delays in movement and changing weather conditions, monitoring risks for packages end route. This allows them to manage inventory, route shipments dynamically, and coordinate across partners with ease.
APIs and System Integration
Contemporary supply chains involve manufacturers, suppliers, logistics companies, retailers, and customers. Smooth communication between these parties depends on effective system integration, which is where application programming interfaces (APIs) come in.
APIs enable smooth data exchange between different platforms, such as linking a retailer’s e-commerce platform with a third-party logistics company’s WMS. This digital infrastructure allows for automation as APIs reduce manual data entry and speed up transaction times. It also enables logistics companies to create custom workflows and adapt to changes quickly. Transparency improves as real-time data exchange improves visibility across the supply chain.
In addition to using cloud technology, FedEx is known for its use of APIs to enhance operational efficiency and customer experience. The company uses shipping, tracking, and rating APIs to streamline global deliveries.
Internet of Things (IoT)
IoT technology is transforming logistics by providing a wealth of real-time data from physical assets such as containers, individual packages, pallets, and trucks. Sensors and RFID tags can track shipment locations, monitor temperature and humidity for sensitive goods, and detect delays or unauthorized access.
Powered by IoT, fleet telematics also helps monitor vehicle performance and driver behavior and provides enhanced visibility, operational efficiency, and risk mitigation.
DHL fitted its highest-traffic routes with IoT sensors and AI analytics to enhance operations. The results were an 18% improvement in delivery times, a 12% reduction in fuel costs, and a 25% decrease in maintenance expenses.
Artificial Intelligence (AI) and Machine Learning (ML)
AI and ML actively shape how logistics companies plan, forecast, and make their operations more efficient. United Parcel Service (UPS) uses AI and ML to optimize delivery routes and enhance package sorting, as well as for improved fleet vehicle predictive maintenance, customer service, and sustainability initiatives.
AI-powered tools analyze vast amounts of data to optimize delivery routes, forecast demand, and recommend inventory levels, while ML algorithms constantly learn from data to improve accuracy over time. These digital infrastructures can improve operations through labor efficiency, enhanced routing, and predictive analytics.
5G Connectivity
5G next-generation network enables ultra-fast data transfer, low latency, and massive device connectivity.
In logistics, 5G supports the dense IoT systems used in smart warehouses and ports, and facilitates real-time video monitoring for remote inspections and security. 5G also enables smooth communication between self-driving vehicles and delivers advantages such as capacity to handle thousands of connected devices, enabling innovation, and faster data transmission.
Teltech Group utilized this tech to its full potential by deploying a private 5G network in its warehouses to add smart applications to its operations without the risk of unwanted interference.
Blockchain
Trust and traceability are essential in global logistics. Blockchain offers a tamper-proof decentralized ledger that improves transparency across the supply chain. This digital infrastructure is used to verify the authenticity of goods, track product journeys from source to consumer, and simplify documentation such as customs forms and bills of lading.
UPS teamed up with e-commerce platform Inxeption to create a blockchain-based platform called Inxeption Zippy. The platform simplifies and secures the supply chain process for B2B transactions, providing full visibility and traceability of products.
With blockchain, efficiency is improved, security is boosted, and transparency is enhanced.
Digital Twins
A digital twin is a virtual replica of a physical asset or process that enables simulation and analysis in a risk-free system. Companies like CEVA Logistics are creating digital twins of supply chains, warehouses, and distribution networks to test scenarios, forecast disruptions, and enhance resource allocation. The benefits of this digital infrastructure include optimization, scenario planning, and sustainability.
CEVA Logistics’ Simul8 digital twin technology reduced annual operating costs and improved resource allocation for a fashion retailer’s fulfillment center.
Digital Infrastructure: The Road Ahead
As the logistics industry continues to transform in response to changing customer expectations, global trade complexities, and sustainability pressures, the importance of digital infrastructure is set to grow, especially as resources like cloud-based services look set to reach a market value of $1,240.9 billion by 2027.
This infrastructure brings people, platforms, and processes together, often working quietly in the background to offer the accuracy, flexibility, and speed demanded by modern supply chains. Investing in digital infrastructure is essential to creating resilient, future-proof logistics networks.
About the author:
Kristie Wright is an experienced freelance writer who covers topics on logistics, finance and management, mostly catering to small businesses and sole proprietors. When she’s not typing away at her keyboard, Kristie enjoys roasting her own coffee and is an avid tabletop gamer.
