While consumer expectation around delivery timeframes has radically changed, (with same day or next day standardised), transparency on delivery is an equally critical element of the online shopping experience.

Meeting this expectation requires a seamless and efficient logistics process, both within and across borders. To deliver this service reliably, communications networks must underpin the ability for logistics companies to track and deliver packages. 

However, a significant number of small to medium retailers continue to utilise legacy package tracking systems which operate on 2G or 3G networks. The customer experience can be held back by a retailer’s inability to upgrade to more advanced communication infrastructures. In an era when customer experience is at the core of customer satisfaction (and resulting loyalty), customer dissatisfaction in service quality will undermine online retail success.

On the positive side, these frustrations can become obsolete. It’s only a matter of time before these older systems are no longer available, as operators begin to switch them off to free up spectrum for 4G and 5G. This, however, puts the onus on retailers to switch from 2G and 3G infrastructure.

Old technology for modern expectations

To understand the current challenges, we need to look at how legacy connectivity is used in the logistics industry today.

Once a package leaves the warehouse, its location must be tracked. This data enables the logistics company and retailer to reliably estimate delivery times; know if a package has been stolen or gone missing; and update the customer on the status of an order. Connectivity makes tracking packages across land and sea possible and is normally done via GPS location sent via cellular or satellite. 

Logistics companies will use 2G, as only a small volume of data is needed for transmission. However, problems can arise with performance; although it is cheaper, it might be a false economy in terms of loss of speed and efficiency – and critically, security flaws. 

Mobile operators face a conundrum

On the other side of the coin, mobile operators are driving towards next generation networks, such as 4G and 5G. They are looking to shut down these older networks – known as being ‘sunset’ – and are trying to figure out how to support an evolution without compromising the customer experience, reliability, and control that retailers demand. Some operators have deployed Narrowband IoT Technologies, specifically LTE-M and NB-IOT, to replace the older networks to continue to service the Logistics segment.  However, the use of LTE-M and NB-IOT is fragmented across the globe.

Logistics companies consider their options

Faced with the inevitable loss of older networks, logistics companies must utilise the best form of connectivity available. They will need to make a bet on what technology they need to help them meet expectation. The options available are:  

  • Unlicensed spectrum: although this is a cheap option, the amount of spectrum that is available is very small—only a few bands. As many users are competing for use, there’s greater potential for interference and unreliable connectivity 
  • Narrowband IoT: this is an affordable, standards-based low power wide area (LPWA) technology to enable a wide range of new IoT devices and services. Devices can connect to an IoT platform, allowing the company to see data in real time. This data can be transmitted over newer networks, such as 5G
  • 4G networks: although widely available, access can be expensive and logistics companies may not need all functionality that 4G offers

Making this decision can be a challenging, yet critical part of planning. Firstly, a full assessment of the data volumes and number of devices needed must be completed, taking into consideration how each device will be powered. 

Next, the company must consider the price of operation versus the quality of service and security needed. Each country may have a different standard for connectivity and a key objective must be to maintain a standard of service regardless of geography. 

New solutions spanning multiple operators will emerge for the logistics market. Companies wishing to navigate these offerings may consider working with an independent partner to understand which solution would work well for their business needs.

Preparation is key

It’s a matter of when, not if, 2G and 3G networks will be shut down. Maintaining a high level of service while making the shift to newer networks is key; logistics operators cannot afford to have a dip in service or productivity as it relates to tracking and delivery times. 

Working with a trusted partner will help to ensure they have the most cost-effective solution to maintain their outputs and customer service during the migration. In this way, logistics companies will be prepared for the major connectivity shift, ultimately helping to future-proof their business.

Dan Klaeren, Senior Product Management Director, Syniverse