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Pros and cons of smart cargo

supply chain
(Image credit: Image source: Shutterstock/KAMONRAT)

For all the havoc it has wreaked across the business landscape, the ongoing pandemic has also had a silver lining. It opened the gates to the increased industrial reliance on novel technologies and intensified the push toward Industry 4.0 – or the fourth industrial revolution, as many call it. 

The positive change has immensely benefited many industries, especially in the supply chain. According to Niko Polvinen, the CEO of Logmore, “Supply chains are long, processes complex, packages handled by so many different contractors, and companies often have very little visibility to all of it.”

To solve these, and many other issues plaguing supply chains across different industries and segments, technology has come up with an answer in smart cargo.

Advantages of smart cargo

There are four major benefits that smart cargo is bringing to businesses willing to deploy the concept, starting with:

Advanced data visibility

Smart cargo is capable of producing a much more substantial amount of data in comparison to other, more traditional methods of supply chain management. 

Solutions like Logmore monitor what happens to the cargo every step of the way, providing a large body of data about it. This data includes the shipment’s humidity, temperature, lighting, tilt, and shocks. 

The technology relies on a dynamic e-ink QR code solution for scalable intermittent connectivity across the supply chain. IoT sensors are attached to the cargo tags, refreshing a QR code on a small display. Anyone can scan this QR code from the logger’s screen and examine the relevant data upon arrival. 

This provides businesses the option to generate visualized and detailed shipment reports, as well as access all of the shipment data on user dashboards. In turn, they can detect and address any bottlenecks, deviations, and trends in the process, as well as efficiently manage shipment reports, calibration certificates, and other important documentation.

On top of that, the data stored in a secure database can be presented at the web service’s API. An API by a trustworthy, flexible, and cost-efficient data logging provider removes the need for building any extra infrastructure for analyzing your supply chain analytics. 

Comprehensive data security

Another important aspect of smart cargo solutions is data security and integrity. These are guaranteed by end-to-end encrypted HTTPS connections that inhibit data manipulation, robust permission management to prevent unauthorized access, and highly secure data retrieval from QR data loggers.

All of the data collected by the QR logger is encrypted and then transferred through a secure connection. Such a system of data collection is far safer than using unsecured USB connections and more reliable than RFID loggers that have been used for the past 20 years.

Also, to receive the data from the API and user interface, the user always has to be authorized and authenticated. To this end, a provider of smart cargo solutions should offer a strong authentication option, such as the ISO27001, ISO27018-compliant solution with HIPAA BAA and EU-US Privacy Shield Framework.

Preventing cargo damage

Did you know that 14 percent of the world’s food goes to waste due to snafus along the supply chain? And that the same thing happens to at least 20 percent of pharmaceutical freight? 

Perishables like food and pharmaceuticals, along with other sensitive products like electronic components, specialist and custom-made machinery, and construction materials are prone to degrading when shipped or stored in inadequate conditions.

This creates all sorts of problems, starting with millions of dollars in lost supply, damaged company reputation, decreased consumer trust. And not to mention environmental harm and legal repercussions from damaged and/or disposed goods.

Systematic monitoring during warehousing and transportation allows insight into exactly where in the chain the damages to the cargo occur and their causes (shocks, humidity, etc.). Having detailed data on this will help you prevent or mitigate the losses caused by inadequate storage and handling, delays, and broken materials, as well as ensure legal protection. 

Reduced carbon footprint

Last but not least, consider the amount of waste produced by the cargo transportation process – which is reduced by introducing the concept of smart cargo into the mix.

As mentioned above, a large amount of goods is lost or wasted during transportation, which has a staggering effect on carbon emissions, especially where food is involved. In fact, food wastage alone accounts for nearly 8 percent of total greenhouse gas emissions caused by humans.

With the more efficient use of data provided by smart cargo solutions, a lot can be done. Every process in the supply chain management can be made more productive, along with better optimization of both marketing and production strategies. Thanks to improved efficiency, we can also reduce waste, and with it, decrease pollution and increase profits.

Disadvantages of smart cargo

It’s not all roses for smart cargo, which also has some shortcomings, including:

QR code safety

The use of QR codes in smart cargo may entail some risks. These include being an attractive target for hackers, as these codes are capable of doing far more than simply displaying a website address. 

Specifically, attackers can use them for initiating costly actions like sending a payment or making a phone call. 

Malicious QR codes can also install software without the user's knowledge. They can be used for phishing, to send email messages, steal information about your device and network, create spam calendar events, and more. This is why robust security in smart cargo is a must.

IoT risks

Likewise, reliance on IoT technologies in the supply chain (such as sensors on cargo tags) opens concerns over data security and connectivity. 

Let’s imagine a resourceful hacker somehow manages to crack a single endpoint in a company’s IT system. It would be relatively easy for them to bankrupt the company, drain the customers’ accounts, blackmail its owners, or cause other kinds of damage.

Industrial-level IoT may also suffer from the divide between the OT (Operational Technology) and IT teams inside a business. This is due to the fact that IT teams don’t have enough knowledge in OT, and vice versa. The OT teams may not have the expertise on the most recent security principles. 

In both cases, improved security methods and employee education can help immensely.

Final thoughts

Introducing newer and smarter supply management frameworks may seem daunting at first. However, any potential challenges are overshadowed by all the positive changes your company’s supply chain will be experiencing. These include advanced transparency, improved data security, minimized cargo damage, and reduced environmental impact – just to name a few.

Before long, any manager or logistician that makes the transition will witness these changes first-hand.

Ralph Tkatchuk, freelance writer

Ralph Tkatchuk is a freelance data security consultant and IT expert with over a decade of field experience working with clients of various sizes and niches.