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The big benefits of 5G technology in logistics
Russell Simmons
Russell Simmons
Discover content team
4 min read
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We’ve all got used to 4G. Websites load quickly, apps are responsive, and sending photos is simple. We take it for granted, even though it’s only been widely used for less than 10 years. But technology marches on, and the next cellular network upgrade is unsurprisingly called ‘5G’.

5G—the fifth generation of mobile technology—is already active in 70 countries around the world. But what is the impact of 5G? And what are the benefits of 5G technology to the logistics industry? Is it just about data transfer speed? And do we even need more speed? Let’s find out.

“Is 5G just about faster data transfer speeds?”

What is 5G?

Every smartphone uses radio waves to send and receive data, whether it’s voice calls or web browsing. As technology has improved, the capabilities of these radio wave networks—or cellular networks—has improved.

The first generation of cellular networks, known as 1G, was launched in the late 1970s and became more widely available in the late 80s and early 90s. Since then, we’ve moved through 2G, 3G, and 4G, each time adding faster data transfer speeds and more features, such as text messaging.1

5G is the latest generation of these cellular networks. But what are the benefits of 5G over the previous generations?

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5 reasons to love 5G

FASTER DOWNLOADS

Yes, as you’d expect, 5G is much faster than 4G. In fact, 5G matches or surpasses the speeds of a standard domestic broadband connection. But as you’ll soon see, this is far from the most exciting thing about 5G.

LOWER LATENCY

5G also offers lower latency. Latency is the time it takes for data to travel a full round trip—from your device to the server and back again. 5G latency is much lower than 4G (1-5ms compared to 30-100ms). 20ms is considered good enough for a video call.2

MORE SIMULTANEOUS DEVICES

Perhaps the biggest upgrade is in connectivity. Each 4G cell tower can handle around 2,000 devices at one time. 5G can handle one million. This is a game changer: it means the Internet Of Things, smart cities and autonomous vehicles can finally reach their full potential.3

“A 4G cell tower can serve 2,000 devices. A 5G cell tower can serve 1,000,000.”

BETTER SECURITY

5G is more secure than 4G because it uses more advanced encryption methods and technologies. 5G also offers more options for secure authentication, such as SIM-based authentication and network slicing.

EASIER TO ROLL OUT

Deploying 4G is—especially if you need a private network for your business—is slow, costly, and requires very specific skills. 5G still requires highly technical work, but because more of 5G’s infrastructure relies on cloud servers and software, it’s a faster, simpler job.

However, most consumers won’t see much difference in day-to-day use. Yes, it’s faster, so data-intensive features like streaming may see some improvement, and video calls will be more responsive on low-latency 5G connections—but they’re not the primary use cases for 5G.

The true benefits of 5G will be seen in the business-to-business and industrial sectors—including the logistics sector. 5G’s latency, capacity, security, and energy consumption are all a world away from their 4G counterparts. There are clear advantages of 5G technology, but let’s explore exactly what this means for logistics.

DHL vans parked

5G benefits for logistics and logistics customers

There are some big advantages of 5G technology for the logistics industry.

FASTER DOWNLOADS MEANS MORE SENSORS AND MORE CONTROL

For logistics, data transfer speeds aren’t a big deal. But as the number of sensors increases (such as cameras, temperature sensors, humidity, etc.) the more data we’ll need to move from place to place. 5G gives logistics operators the data transfer capacity to cope with this deluge of data.

In the near future, logistics firms will be giving their customers constant updates, ranging from temperature and humidity to exact location and live video feeds. Want to know where your shipment is and if it is in good condition? Just log in and check the feed supplied by your logistics provider. That way, goods are less vulnerable to damage, tampering or even theft. Of course, this is theoretically possible with existing 4G, but there’s a problem: 4G doesn’t have the capacity to deal with it. And 4G devices are power hungry; 5G adds capacity and cuts energy consumption.

LOWER LATENCY MAKES AUTONOMOUS VEHICLES (AND FASTER SERVICES) POSSIBLE

5G’s low latency and improved reliability mean data can be transmitted almost instantly. This is essential for self-driving logistics vehicles, so any remote operator or server can act on that data sooner. For logistics customers, this means cheaper and more efficient services. Additionally, autonomous vehicles can improve safety, as they have the potential to eliminate human error and prevent accidents.

“Autonomous delivery vehicles are already here”

DHL will soon be integrating autonomous vehicle technology into our supply chain. We have reserved 100 autonomous trucks from TuSimple, the US self-driving truck developer. TuSimple has also been hauling freight daily for DHL on routes that are part of the USA’s Autonomous Freight Network (AFN).4

MORE DEVICES MEANS BETTER, FASTER SERVICES FOR LOGISTICS CUSTOMERS

Previous generations of cellular networks weren’t designed for the Internet of Things (IoT), but that has changed with 5G. 5G is the first generation to put IoT applications front and center. It’s nothing to do with faster transfer speeds, instead it’s all about capacity and battery life. 4G’s capacity is limited, with only a few thousand users (devices) per cell tower. 5G can support up to a million. With this kind of support, every existing RFID tag could become a powerful sensor array capable of transmitting the exact location of every package, as well as the environmental conditions. Is your shipment of flour coming into contact with water due to a broken roof panel? An instant alert could save you thousands of dollars in spoiled goods.

“There will be 27 billion IoT devices online by 2025”5

Knowing the precise location of vehicles and goods means far more precise, agile planning so that allocating resources and warehouse space becomes faster and easier. Thanks to 5G, an unscheduled delay is no longer a nasty surprise.

Automated picking and packing become easier, as all packages would have an exact known location (understandable by a computer) within the warehouse. Augmented Reality (AR) applications used for picking and packing, enhanced by 5G, will be an everyday sight on the warehouse floor. Staff wearing AR glasses can be guided to specific locations and told which items to pick up.

Outside the warehouse, 5G-supported AR technology can also assist by guiding employees loading vans. Heavy or dangerous items could be flagged before the employee even touches them. As we know, the order in which goods are loaded matters. This becomes a much easier task, with digital tech making it simple to see which package goes on the vehicle in what order. And at the other end of the journey, it can help couriers locate specific items in their vans and even the house number of the customer.

All this means faster, cheaper services for customers.

5G ADDS ADVANCED SECURITY TO KEEP YOU SAFER

5G is built with security in mind. 5G’s underlying technology is more secure than previous generations of wireless communications because it runs on software and servers, not less secure hardware appliances. 5G is more secure than 4G because it supports end-to-end encryption, meaning that data is encrypted from its source to its destination, making it much more difficult for anyone to intercept or modify the data in transit.

“5G’s underlying tech is more secure by design”

5G also brings secure authentication, such as SIM-based authentication and network slicing. Network slicing means business users no longer need to purchase expensive cell hardware to create their own private cell networks. Instead, business customers create their own private 5G networks using the same 5G hardware used by the general public but now with a software-defined ‘isolated’ section, improving security and reliability. Network slicing adds another layer of security for every user.

shipping containers stacked on top of each other

Putting 5G to the test

The benefits of 5G are very compelling in a port environment, as proven by a trial project in the UK. The West of England Combined Authority and its 12 partners, including Bristol University and Cardiff Business School, ran a test case called the 5G Logistics Project to explore the benefits of 5G in a real-world freight port setting. 

The 18-month project found that three use cases clearly demonstrated the advantages of 5G technology in a port environment: security, traceability and tracking of real-time goods; autonomous drone flights for port surveillance and emergency response; and improvements to road traffic management through 5G smart junctions, easing congestion and reducing air pollution around ports and Enterprise Zones.6

Be in no doubt, once it reaches its full potential, the positive impact of 5G and the benefits of 5G to the logistics industry cannot be overstated. For details of what else is making a difference in logistics, see our recent article on delivery and logistics trends.