April, 2025
Shanghai New International Expo Centre, Shanghai, China

How will 5G change the logistics industry?

At the China ICT Expo 2019, Mr. Chen Zhaoxiong, Deputy Minister of China's Ministry of Industry and Information Technology announced that 5G technology will be put to commercial use, and by the end of 2019, a total of 130,000 5G base stations will be launched to cover Beijing, Shanghai, and their adjacent cities. This marks the start of a new era when 5G services can be enjoyed by all. As the next-generation of information technology, 5G will also empower the logistics industry. 


Phases of next-generation logistics based on 5G and evolution of application scenarios


▼ 1. 5G makes it possible to build smart warehouses.

The next-generation logistics entails fully-automated warehousing, which requires breakthroughs in AI technology. By far, many intelligent robotic devices have been employed in warehousing for automated sorting, transfer, as well as inbound and outbound logistics. The introduction of 5G makes it more likely to achieve full automation in warehousing.
There is an inevitable trend for the integrated use of 5G and AI. With the existing communication technologies, hardware chips embedded in many robotic devices are often underused due to problems such as latency and excessive energy consumption; while the reliable transmission enabled by 5G will undoubtedly facilitate the use of intelligent robots. By far, AI technology has been used in many areas of the logistics industry, and many robot-like hardware devices have been employed to serve logistics purposes.


Automated warehouse diagram 

Smart warehousing is one of the scenarios where AI can be extensively used in the next generation of logistics. 5G, as a transport layer technology, provides a robust communications environment for it. Meanwhile, 5G, which allows the simultaneous access of massive numbers of devices, will enable smart terminal equipment, e.g. drones, robots, shuttles, wearable devices, and sorting equipment, to play an larger role in different modules of warehousing.

Highly-efficient smart warehousing will not be possible without the support of 5G. By making smart warehousing a reality, 5G indirectly provides goods safety guarantee for upstream e-commerce enterprises, thereby offering a better logistics service experience for the customers. Smart warehousing requires more hardware resources and optimized warehousing model so that 5G can play a greater role. The Chinese national government pays great attention to progress of logistics enterprises in terms of warehousing automation, as the warehousing link has the largest value on the entire supply chain. Smart warehousing is not just about ensuring safety, but also serves to improve the efficiency of inbound and outbound logistics.


▼ 2. 5G makes fully-automated transportation a reality

Be it automated driving or other smart driving technologies, they all need the support of the IoV technology, which enables vehicles, drones and other equipment in logistics to easily connected to the network platform, and allows remote control centers to dispatch and issue necessary instructions to them. As the next generation of high-efficiency mobile communications technology, 5G will enable smart technologies concerning transporting vehicles to break the existing bottlenecks, such as non-line-of-sight perception and instant sharing of data, thus helping to develop a fully-automated transportation system.

During transportation, 5G is primarily used for terminal communication, i.e. data exchange and communication between transporting vehicles and remote cloud control centers or logistics applications. The terminals will collect data, receive instructions, and send back information, e.g. road and vehicle conditions; while application services and cloud control centers may continue using wired Ethernet for communications. The main rationale for adopting 5G in the architecture is that 5G can meet the performance requirements in an IoV environment, such as self-organizing network construction, instant sharing and mass transmission of data, low latency, and high reliability. 


▼ 3. 5G enables AR technology to be applied in logistics


The next-generation AR technology used in logistics will rely on 5G as its support for data communication.

The most tricky parts of warehouse operations lie in sorting and reviewing. In these regards, AR technology may help navigate staff with arrows in an visual environment to specific cargo locations, and then indicate the quantity of items to be picked up. Also, AR technology enables engineers to view the 3D layout of the warehouse so that they can adjust the layout for optimal warehouse design. 

Thanks to AR technology and background computing in the transportation process, the transportation personnel will be able to optimize the loading quantity and sequence of the items concerned, thereby making the loading and dispatching process more accurate and efficient. In the distribution process, AR technology may help optimize the distribution route by indicating the road conditions in an accurate and timely manner. For the last-mile delivery, AR glasses will help the couriers to more efficiently pinpoint particular items and match the apartment number of the receivers.

5G enables logistics staff to use AR glasses to complete their work efficiently at any time, and truly streamline the logistics process, from warehousing, to transportation, and to distribution.


AR technology is a major application scenario for 5G's high speed feature in the next-generation logistics, where AR equipment can help logistics staff to efficiently complete their tasks in warehousing, transportation, and distribution. AR technology is also of vital importance to e-commerce platforms in the upstream. The data obtained by AR equipment, including both order and customer information, is historical data provided by these platforms. The use of AR technology in logistics will, first of all, guarantee the accuracy of logistics services for upstream e-commerce platforms so that problems such as prolonged dispatch and faulty order processing will cease to exist. Secondly, it serves to promote the development of the retail industry, as AR equipment will make warehousing, transportation, and distribution much more efficient. Consequentially, the better the customer experience is, the more extensive online retail business can be.


▼ 4. Industrial-grade logistics monitoring relies on 5G

Logistics monitoring refers to the use of information technology to realize real-time monitoring and full-process tracking of cargo in warehousing and transportation. What's monitored include the quality, identification and real-time locations of cargo during transportation.

The next-generation logistics monitoring system will introduce cutting-edge technologies, e.g. AI, big data and cloud computing, so that it can monitor in real time the temperature and humidity of the cargo in the warehouse, and the damages of goods during transportation and the transportation routes. If any abnormalities occur, such as damages caused by man-made mistakes or natural disasters, the system will upload data in time, carry out remote operations, and make intelligent decisions to maintain the safety of goods during transportation.


5G-based functional framework for industrial-grade logistics monitoring

Thanks to a stable bandwidth that enables industrial-grade intelligent monitoring, 5G makes it possible to reflect in real time the problems encountered in transportation and warehousing to the data center in the form of video or image. In this sense, 5G makes the key link of logistics monitoring much more efficient and intelligent that traditional communication technologies.

▼ 5. Logistics data computing will be accelerated thanks to 5G

Big data and cloud computing enable modern logistics to store and analyze information more effectively. Therefore, they will also be the key technologies adopted by the next-generation logistics, where efficient data storage and analysis architecture enables logistics data to be stored and mined in time and powerful cloud computing architecture enables logistics applications to enjoy high-performance computing services. The high bandwidth of 5G makes the “cloud logistics” architecture based on big data and cloud computing a more practical solution.

In the next generation of logistics, the data computing at logistics nodes will have two models: centralized computing and mobile edge computing. The combination of the two computing schemes makes it easier to accurately calculate the data in logistics. Correspondingly, there are two data storage schemes, either centralized or distributed, which complement each other.

5G can provide high-speed communications for edge computing in the next generation of logistics computing solutions. Its ability to allow simultaneous access of massive numbers of devices also seamless integrates edge and centralized computing. One of the core technologies of 5G is to provide efficient communications solutions for edge computing. Distributed mobile cloud edge computing is also a model for computing edge nodes in the next generation logistics. 

In logistics, a fair number of nodes are edge communication ones, e.g. transporting vehicles, and logistics nodes embedded in intelligent terminals. Unlike traditional cloud computing, mobile edge computing does not publish computing tasks directly to a centralized cloud computing platform; instead, the computing resources used are on the user's edge. Such a way of computing leads to reduced resource losses caused by redundant computing and data transmission. 

5G adopted in next-generation logistics enables all mobile nodes to place data computing, storage, and caches at the edge of the terminal's network. The edge servers will then start syncing with remote cloud computing servers. The distributed mobile cloud edge computing solution frees logistics data computing platforms from the role of centralized management, and makes computing more efficient by leveraging edge servers to complete operations such as the data computing and storage of adjacent nodes.


▼ 6. 5G-backed blockchain technology makes logistics safer 

Blockchain technology is capable of truly and reliably recording and transmitting the transactions, products, and real-time locations during transportation, among other information generated in the logistics process, while 5G technology serves to ensure the information are transmitted efficiently in real time, thereby improving the overall efficiency of the industry.

In addition, as the assets recorded on blockchain cannot be altered or counterfeited, all merchandises concerned are recorded as assets, i.e. each merchandise has a unique identifier on the blockchain, which can be used to track the item in real time. In other words, thanks to blockchain technology, the merchandises become traceable and falsifiable, and their information cannot be tampered with.

Members of the logistics supply chain may record the logistics and user information on the blockchain through smart contracts, and design an encryption mechanism to ensure the information is confidential and anti-calculation-based modifications. The 5G-underpinned blockchain-based logistics safety system uses smart contracts instead of traditional server programs to make it possible to run specific contract programs on the blockchain.

As a result, smart contracts inject the logistics safety system with privacy protection, automation, and intelligence, making the logistics process more transparent, and improving the authenticity and trustworthiness of data in the supply chain. 5G brings improved speed and bandwidth for communications between distributed modules, which will enable the next-generation logistics to develop at a speed faster than ever.


In 2019, 5G is expected to start sprouting in the commercial realm, where various industries will phase in the use of 5G applications. In 2020, 5G is likely to enter the private sector where everyone will be able to enjoy the convenience brought by 5G services. The logistics industry, as one stair on the ladder of the service industry, will take the lead to popularize 5G applications. By far, major courier, logistics, and retail companies are standing on the starting line, getting ready for the all-out commercial use of 5G technology. Powered 5G, the next-generation logistics industry will provide enterprises and individuals with brand new logistics services of better quality and intelligence.