• Bluedrop Blogs and Guides

  • Bluedrop Insurance Blog
  • How Industry 4.0 is changing the haulage industry

    Industry 4.0

    Ever since the turn of the 21st century, technology has accelerated at what feels like ever-increasing pace and 'industry 4.0' is no different. From the widespread integration of the Internet and mobile phones - to the recent rise of voice activated home hubs like Alexa - digital technology has transformed how we live day-to-day and impacted society on a mass global scale.


    In fact, today’s digital reality couldn’t be any further from the ominous Y2K fallout some analysis predicted in the run-up to the millennium, when threats of entire system shutdowns as the clock struck midnight were echoed far and wide. Yet, as we now know, instead of the world cataclysmically collapsing, quite the opposite chain of events occurred.

    In less than 20 years society has become so digitally advanced that the way we shop, source information, and stay in touch with friends, family and colleagues is now vastly different from our pre 21st century existence. Not only have entire careers been born from the digital evolution, virtual currency has become an accepted payment type, friendships exist exclusively in the online space, and those that backed the digital boom are now considerably richer for having the foresight to do so.

    It’s this same integrated and second nature state of digital transformation that Industry 4.0 now seeks to emulate, in a bid to similarly improve operational efficiency in process-driven sectors, such as logistics and haulage.

    What is industry 4.0?

    Industry 4.0 is a general term used to describe the integration of digital technology within the context of industry. A shift widely hailed as the 4th industrial revolution.

    This type of digital transformation has already begun in earnest, with the integration of voice activated search and customer service agents powered by artificial technology (of which chatbots are one example). But, as industries increasingly compete for revenue in competitive market sectors, so comes a need for greater efficiency, better cost-effectiveness and higher productivity - and it’s these outcomes specifically that Industry 4.0 digitising seeks to deliver.

    In other words, Industry 4.0 refers to a time when digital technology is so interconnected and fluid across an organisations’ entire end-to-end production line, it has the capability to make commercially beneficial decisions that optimise productively and improve outcomes. Eventually, reaching a point where machine learning is so sophisticated it can autonomously intervene on a business’s behalf, without any prompting or direction from a human enforcer.

    What does Industry 4.0 mean for the haulage industry?

    The haulage sector is just one of many process-led industries that operate as part of a wider supply chain. Responsible for the transportation of large-scale cargo goods by rail, road or sea, haulage operators manage the logistics of getting item A from its point of origin to its final destination, both safely and on time.

    Haulage as an industry has been largely slow to digitise to the extent that other sectors have embraced digital transformation. Healthcare for example, has leveraged video conferencing and emerging technology to allow some GPs to conduct entire patient appointments virtually as an online consultation. Not only does attending to patients in this way reduce the number of physical visits to the practice, it also allows GPs to consult with a higher volume of patients, thereby improving practice efficiency.

    Conversely haulage hasn’t embraced today’s digital technology to anywhere near the same degree of sophistication - despite the technology to do so being widely available and accessible. So as a commercial sector its operations are still largely reliant on multiple processes, overseen and executed by multiple people. Naturally this increases the margin for error, and runs the risk of detrimentally damaging a business’s reputation, productivity and revenue generation as a consequence, not to mention restricting operational efficiency.

    What are the benefits of embracing Industry 4.0?

    Industry 4.0 digitisation seeks to irradiate barriers to success and improve operational practices, with digital technology that’s “all-seeing” and connects every step of a haulage operator’s distribution chain into a singular autonomous system, which communicates using the Internet of Things.

    In much the same way as telematics technology endeavours to give plant operators and dispatchers visibility over a driver’s whereabouts, route, and behaviour while behind the wheel, industry 4.0 seeks to use advanced data and AI to manage end-to-end aspects of the logistics funnel. It’s hoped that this digital transformation of the industry will help the haulage and logistics sector to better manage operational challenges alongside adopting greener practices.

    Of course, the biggest benefit to emerge from Industry 4.0 is increased efficiency, through which business will see a positive impact on output and revenue generation. By digitising many elements of the haulage and distribution supply chain, businesses are able to increase production turnover, enjoy greater transparency, and replace human decision-making with machine algorithms. The result is a streamlined and fluid supply chain, with the ability to learn enough human behaviours so as to function entirely autonomously.

    What impact will Industry 4.0 have on the future of the haulage industry?

    When we refer to industry 4.0 what we’re talking about is a complete overhaul in inbound and outbound logistics practices, something that’s becoming increasingly urgent as the complexities of moving vast quantities of cargo around the world continues to present haulage operators with logistical challenges.

    Of course, while the move to embrace digitisation and improve operational efficiency within the haulage sector is viewed as a positive and timely evolution, the impact of these changes will undoubtedly be felt-sector wide, not least of all, among those employed within the logistics supply chain.

    Two of the biggest takeaways of Industry 4.0 include:

    Machine automation

    As in any industry, where machine automation is the end goal, with industry 4.0 looking to absorb processes traditionally handled by humans, some roles within the haulage industry are likely to become obsolete. Machines, using learned-algorithms, will increasingly make commercial decisions over people relying on their own experience and judgement, which will limit human interference in operational processes to a minimum.

    We’ve already seen the effect machine automation and digital technology has had in other areas, such as machine terminals replacing human-manned ticket offices at transport hubs, self-service checkouts at supermarkets and AI-powered chatbots acting as customer service advisors. As the logistics and haulage industry continues to digitise and rely more on interoperability, this too will see a reduced need for human employees in roles that can be fulfilled autonomously by machines.

    Unbridled transparency

    Greater end-to-end transparency across the entire logistics supply chain is another of the key impacts of Industry 4.0 digitisation in the haulage sector – boosting data quality and bringing an end to information silos.

    This increased interconnectivity, powered by the Internet of Things and other integrated technologies, will have a knock-on effect across the entire haulage chain, heralding a more agile system of up-to-the minute working where stakeholders have complete real-time visibility.

    Not only is this ascension to a cohesive infrastructure set to benefit haulage operators in terms of time, resource and expenditure, the operational value it delivers is unlike anything the haulage sector has experienced up to now.

    Want to find out more about Bluedrop's Haulage Insurance?
    Return to blog menu