The transport and logistics sector looks to upgrade from private LTE and wi-fi to private 5G

For decades, trucking companies, railroads, couriers, port authorities, warehouse operators, and other members of the transportation and logistics ecosystem have used cellular to track the location and condition of vehicles, shipping containers, cargo ships and other assets. In fact, the only thing that’s changed in recent years is a marked shift to private mobile networks — a trend that’s even more pronounced with 5G.

Early market indicators suggest that the transport and logistics sector is enthusiastic about 5G, according to an Analysys Mason survey. By 2024, 92% of large transportation and logistics businesses (n=13 respondents) say they plan to deploy a private 5G network. This high number likely includes public 5G as awareness of the benefits of private 5G is still nascent.

Compared to LTE, 5G provides a variety of new capabilities that are a good fit for the digital transformation initiatives that transport and logistics companies want to launch or expand. One example is 5G standalone’s Enhanced Mobile Broadband (eMBB) feature set, which is ideal for bandwidth-intensive applications such as backhauling hundreds of security cameras around a port or railyard. Another example is Ultra-Reliable Low-Latency Communications (URLLC), whose single-digit-millisecond latencies are ideal for delay-sensitive, mission-critical applications such as autonomous forklifts and locomotives.

In addition to low latency and high speed, 5G also has a cloud-native architecture. Eighty-five percent of the transport and logistics companies surveyed said a cloud-native architecture is a top criterion. That response aligns with what their peers are saying in other surveys. For example, when Oracle asked supply chain professionals about challenges such as cost containment, lack of real-time visibility and the need to maintain high customer service levels, “roughly one-third of respondents see cloud solutions as being a ‘game changer’ or providing a significant positive impact.”

Which private 5G deployment model dominates?

Three out of four transport and logistics companies (77%) overwhelmingly prefer the hybrid deployment model, which combines a dedicated, on-premises network and a virtual, private slice of a public 5G network. The majority of other sectors in the survey also preferred hybrid, but not by such a wide margin. For example, less than half (45%) of manufacturers plan to go hybrid. 

Another 15% of transport and logistics companies prefer to have everything provided as a slice rather than owning any core and RAN infrastructure. None indicated a preference for owning a core and RAN.

With a combined 92% looking to use some or all of a public network, that’s good news for mobile operators. It’s also not surprising, considering the sector’s name: Transportation means assets are always on the move, often across great distances. It would be cost-prohibitive for these companies to own a network that covers an entire city, region or country. Public 5G networks will have that coverage, so it makes business sense to leverage those. 

Top concerns and needs

The transport and logistics sector’s enthusiasm for private 5G hybrid networks is tempered by a few concerns, starting with cost (54%) and management complexity (54%). Besides cost, enterprises are concerned about whether they can customize a network slice to meet their unique requirements. 

Mobile operators, systems integrators and other specialists targeting the transport and logistics sector can turn these concerns into opportunities by acknowledging them in their sales and marketing and offering clear solutions. For example, some businesses might accept a higher cost if it gets them a private 5G service that’s easier to customize and manage. 

An equal number (62%) say support for a range of specialist devices and integration with fixed networks (62%) is important. These responses bode well for vendors and systems integrators that already specialize in transport and logistics. Mobile operators also could partner with those incumbents to leverage their expertise and brand recognition. 

Not surprisingly, security is a top requirement (77%). Eighty-five percent say security KPI reporting is important, well ahead of KPIs for network performance (69%) and application performance (69%). To win their business, mobile operators, systems integrators and other specialists could provide a turnkey suite of KPI tools covering all three, such as monitoring private network traffic to detect security anomalies and performance degradations. 

Insights from early adoption of 5G in transport 

In addition to the Analysys Mason report, mobile operators, vendors and systems integrators can find further sector insights in existing private LTE networks and the initial private 5G deployments. One example is the Port of Seattle, where Nokia’s partnership with Tideworks Technology shows how mobile vendors can team with transportation/logistics specialists to meet the sector’s unique needs and wants. Their joint solution at the Port of Seattle’s Terminal 5 includes Nokia’s Digital Automation Cloud (DAC) and ruggedized tablets, and Tideworks’ terminal operating system, using private LTE/5G in Band 53 (Globalstar-licensed) and Band 48 (CBRS).

In an earlier proof-of-concept trial at Oakland International Container Terminal, Nokia says “a small number of DAC private LTE radios provided superior coverage and reliability than approximately 200 existing Wi-Fi access points located across two Oakland sites.” That’s noteworthy because Wi-Fi is the only network technology with a higher rate of deployment than private LTE.

For more information about the Analysys Mason survey, take a look at the infographic or download the complete report. Upcoming blog posts will explore the nuances of specific countries’ private 5G markets, with Germany first in that series.