Expanding Supply Chain Tracking with Returnable Transport Assets (RTAs)

Generally speaking, Returnable Transport Assets (RTAs) can be defined as assets used for moving foods in the supply chain. Some examples include pallets, racks, roll cages, kegs, crates, containers, and drums. Historically, these RTAs have been written off as Operational Expenditure (OPEX) due to the difficulty in tracking the enormous number of these supply chain assets by hand. Enter RTA trackers, which are battery-powered Internet of Things (IoT) devices connected via Wide Area Network (WAN) technology.

Market Overview

• Currently, the adoption of Internet of Things (IoT)-powered Returnable Transport Asset (RTA) trackers is mostly borne out of a need to manage high-value assets in the supply chain. RTA tracking solutions can track the location of pallets, containers, crates, drums, and other assets used in the supply chain.
• Through the next 5 years, the greatest Total Addressable Market (TAM) will come from rigid containers/totes/trays & bins—with 9.3  billion units by 2027.
• Wooden pallets, with 5.7 billion RTAs this year, will have a TAM of 6.7 million RTAs by 2027.
• China is and will continue to be the dominant regional market for WAN-based RTA trackers, increasing its installed base from 3.6 million in 2022 to almost 30 million by 2027.
• Behind China will be North America, Western Europe, and the rest of Asia-Pacific—with installed bases of 27.8 million, 25.5 million, and 22 million, respectively, by the end of the forecast window.
• Proprietary Low-Powered Wide-Area Networks (LPWANs), because of their low cost and sufficiency, are currently the most popular LPWAN form factor in supply chain asset tracking. However, the RTA tracker market is hungry for cellular LPWAN solutions and it will overtake proprietary LPWAN by 2025.
• In 2022, the installed base for RTA trackers using proprietary LPWAN was 6.3 million, compared to just 2.6 million for cellular LPWAN. But just 3 years later and those numbers will be 22 million and 25 million, respectively. By 2027, the installed base for cellular LPWAN will be more than double that of proprietary LPWAN, reaching nearly 79 million.

“It is easier to create business cases for some RTAs than for others, and massive adoption of WAN IoT in low-individual value RTAs is only likely to come in 3 to 5 years. It is important for solution providers and adopters alike to understand what the opportunity is for different RTA types in order to plan with an evolutionary approach to technology in the market.”  – Tancred Taylor, Industry Analyst at ABI Research

Key Decision Items

Aim for Value-Added Key Performance Indicators

Today, there is still considerable hesitancy to adopt RTA tracking solutions, largely due to costs. Vendors can generate wider enterprise buy-in through value-added services that encompass myriad supply chain use cases. For instance, coordinating asset management and product order/shipment systems can enable RTA owners to share data with customers and supply chain partners to increase visibility into broader logistical touchpoints. Managers could look into technologies like WAN and WAN + Short-Range Wireless (SRW) to offer location-based or sensor-based value-added services to customers.

As another example, condition-based sensors can be used by supply chain managers to monitor the temperature, humidity, and even washing cycles of perishable food or pharmaceutical products in transit. Not only do these value-added services make RTA tracking solutions more attractive to cold chain decision makers, but they create new recurring revenue streams for the vendor.

Define a Long-Term Roadmap for Customers

Initial RTA tracking solution implementations will be limited in scope. However, as the Total Cost of Ownership (TCO) decreases and more enterprise departments are brought in, the potential compounds. This is why it’s paramount that vendors work closely with supply chain managers to outline a long-term roadmap. Some of the most triumphant IoT RTA implementers have 10-year roadmap plans.

For example, the company Dutch IoT Solutions (DIS) has a long-term partnership with major pallet pooler IPP, aiming to develop a fully-connected pallet pool. From the viewpoint of DIS, it will take at least the next 10 years to achieve this goal. For now, the company is helping IPP extract value from micro-level implementations on an ongoing (rather than immediate) basis.

A successful roadmap for how the customer will digitize supply chain operations should account for the evolution of implementation architectures, device/connectivity/software costs, and use cases. Further, stakeholders must be able to create timelines for when certain technological deployments will be introduced and which departments will be involved.

There are three levels of value generation that vendors and end customers will traverse when implementing RTA, as follows:

• Level 1: The initial layer within the RTA tracking market, which is largely concerned with data collection on the RTA via barcode or WAN tracking device.
• Level 2: A more in-depth analysis of the assembled data. This enables supply chain managers to identify and solve systemic weaknesses, emerging market opportunities, the performance of trading partners and carriers, and RTA workflow optimization on the facility and network level.
• Level 3: A more operationally inclusive approach is formed. Once levels 1 and 2 are mastered, it’s time to coordinate multiple supply chain elements and focus on value-generating services.

Refrain from a Technology-First Approach

Using a technology-first approach is one of the easiest ways to fail in seeing where IoT value exists. Instead, solution providers and their enterprise customers need to take an outcome-first approach. In turn, this allows you to pick and choose the most appropriate technologies that have the features required to realize supply chain goals.

An outcome-based approach to IoT RTA tracking might necessitate a maturation of tools that are used, as opposed to rapidly transitioning to a 100% WAN solution. Often, going all-in on WAN is a mistake and will only lead to wasted time and money. On many occasions, alternative tools like SRW technologies or Radio Frequency Identification (RFID) are befitting.

Explore Satellite Connectivity Solutions

Low-Power Wide Area Networking (LPWAN), while one of the most popular connectivity options in the RTA tracking market today, needs some help. The problem is that operators do not have a large enough global footprint to handle the proliferation of RTA tracking use cases. ABI Research expects satellite networks, such as EchoStar Mobile, Lacuna Space, and others to play an increasingly crucial role. The Long Range Wide Area Network (LoRaWAN) ecosystem is one of the most forward-looking solutions for Direct-to-Satellite (D2S) connectivity.

On that account, satellite network operators should be viewed as potential partners that can fill in coverage and roaming gaps. For example, telecommunications company ZiFiSense recently partnered with satellite-based IoT operator Kinéis. The path to achieving full potential with satellite-based RTA tracking solutions will be heavily influenced by satellite operators’ go-to-market strategies and commercialization side by side with terrestrial telcos, Original Equipment Manufacturers (OEMs), and solution providers.

Look beyond Location-Based RTA Tracking

RTA tracking should not be confined to just location-based tracking in the supply chain. Yes, it’s a major use case for RTA tracking, but it’s also just a springboard to value generation. Besides location and sensor-based tracking, RTA tracking extends to the following supply chain optimizations:

• Number of truckloads used to transport empty RTAs
• Length of journeys for empty RTAs
• Reduction in human touchpoints in the supply chain
• Faster and more precise billing services
• Carbon impact of materials and journeys

Key Market Players to Watch

• BOX ID
• Brambles
• Digipal
• Digital Matter
• Dutch IoT Solutions
• Groupe ZeKat
• HERE Technologies
• RM2
• Sensize
• SMART Logistics
• System Loco
• ZiFiSense

Dig Deeper for the Full Picture

To understand the technologies and approaches used for RTA supply chain tracking and to optimize product portfolios according to visibility demands, download ABI Research’s Returnable Transport Assets: Market Opportunity and Technologies Analysis research report.

Not ready for the report yet? Check out the following Research Highlights:

• How Digital Transformation Fits into the Food and Grocery Retail Supply Chain
• Is Seaport Automation the Answer to Supply Chain Constraints?

This content is part of the company’s IoT Markets and Supply Chain Management & Logistics Research Services.