When Will the Impending '3G Sunset' Dawn on Our Trucking Community?
The urgency behind 4G LTE transition before fleets suffer informational blindspots
A hearty welcome to the seventh edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
What makes a smartphone, a ‘smart’ phone? While a cursory definition tells us that it’s a phone that can perform several functions that are native to a computer, many of its features are—in essence—available only when the device connects to the internet. There are two ways for a smartphone to connect to the internet—via a standard Wi-Fi hotspot or a cellular telephone service provider.
That brings us to the next question. What exactly is cellular network connectivity? It is the process through which the smartphone wirelessly communicates with a cellular network to send and receive packets of digital information. This is the ‘internet’ we know of on our phones.
That said, the term ‘connectivity’ tells us nothing about the speed of the connection. This is where the various generations of cellular network connectivity come into being—including 1G (stands for first-generation), 2G, 3G, 4G LTE, to the currently discussed 5G infrastructure.
Incremental technological progress has given us networks with data speeds several thousand times faster than where we started a few decades ago. This means that a 4G LTE-enabled smartphone from ‘21 is light years ahead in data transmission compared to a 2G-enabled smartphone from ‘07. So what does the topic of connectivity have to do with trucking fleets hauling freight across the country? Everything.
What does the topic of connectivity have to do with trucking fleets hauling freight across the country?Everything.
While the trucking industry has traditionally been accused of being sluggish to adapt to change and its apparent lack of enthusiasm in adopting technology, things have started to look up in recent times. Fleets have understood the impact of digitalization and the visibility technology brings with it. Understanding data streams arising from operations and leveraging them for quality insights has helped carriers stay on top of an often volatile market.
And to do this involves a variety of technology solutions—be it dash cams, door sensors, or temperature monitors. The idea is simple. Buy the hardware solution, fix it on the truck, install the frontend dashboard at the back office, and start gaining visibility into freight movement. However, integral to these asset trackers is the way they communicate in real-time with the back office. Asset data is pushed to the cloud, which is then processed by a multitude of algorithms to finally create tangible insights that are informative to the fleet management—in real-time.
But here’s the kicker. The real-time data that the industry talks about is not that ‘real-time’ after all. The reason is the latency—a fancy term denoting the time it takes for information to reach the back office from the moment of origin. The lower the latency, the more ‘real-time’ gets the data. A 4G LTE-enabled tracker would have much lower latency compared to a 3G-enabled tracker.
The real-time data that the industry talks about is not that ‘real-time’ after all.
Thus, a lot of it has to do with connectivity. Most trucking companies use 3G-enabled trackers, a relatively outdated technology compared to 4G LTE or the even faster 5G. Data transmission speeds in 4G LTE devices are around 100 megabytes per second on a mobile asset—several hundred times faster than a 3G-enabled device. That’s like putting a Ferrari on a race track with Usain Bolt. Bolt is fast, but isn’t that fast.
The need to reduce latency is what successive generations of data connectivity are all about. Data gets transferred a lot faster through a 4G LTE asset tracker to the back office than through a 3G tracker. So when we talk of improving the accuracy of the estimated time of arrivals (ETAs), it isn’t rocket science to see which device is better. Bottom line, it makes operational sense for carriers to transition to 4G LTE-enabled devices from their slower predecessor.
While the merits of 4G LTE trackers and sensors are reason enough for the transition, there is a more pressing motive for carriers to consider phasing out their old devices—the imminent demise of 3G network infrastructure.
The reason is simple. Cellular network providers own only so many network towers, a.k.a cell sites, across the country. Constructing towers cost a lot of money, which they could have spared if not for the already massive expenses they incur with introducing 5G technology. With a finite number of cell sites available, cellular providers are dismantling 3G networks to make way for 4G LTE and 5G infrastructure.
Major cellular providers have either phased out or are in the process of phasing out their 3G networks on a rolling basis. The last remnants of the 3G network would be taken out by the end of 2022. So in roughly a year and a half, all devices that work on a 3G network—in all manner of speaking—will stop working.
The last remnants of the 3G network would be taken out by the end of 2022. So in roughly a year and a half, all devices that work on a 3G network — in all manner of speaking — will stop working.
So what does this mean to carriers relying on 3G-enabled trackers for their daily operations? The immediate issue they’d likely see is their devices having blind spots during the haul, in places where network coverage is at its weakest. Over time, these blind spots will widen, and the devices will eventually fail to be of any constructive use. This being said, certain cellular providers will continue providing coverage till a cliff date, when they’d shut down their entire 3G network.
While the 3G sunset awareness is still hazy within the trucking industry, the disregard shown to the eventual transition is palpable. In a way, this should not come as a surprise after what went down within the trucking ecosystem during the months leading to the electronic logging device (ELD) mandate. Though there was significant media coverage on the mandate and several ELD options did float around in the market, adoption was severely lacking—even months after soft implementation came into force in December ‘17.
But unlike the ELD mandate, the 3G sunset is not preceded by any high-level regulation from the government. It’s far less obvious, too, as it involves fleets to trash their 3G-enabled devices for a 4G LTE solution, unlike adopting a brand new technology like the ELD, which created a sustained dialogue in the industry.
Bigger fleets and private fleets hauling for major companies understand the risk of a data outage with the 3G sunset and are the early movers in transitioning to the 4G LTE devices. However, transitioning is not easy. Companies need to zero in on their preferred solution provider and see if they can make a seamless transition. If the trucks number in the hundreds, there are significant logistics involved in grounding them in a staggered manner to ensure they all get their retrofits done.
In the case of smaller trucking firms and owner-operators, there is little to show that they are adopting en masse. With the fragmentation that exists within the industry, information is not democratized in the ecosystem. Studies may need to be done, but it would be reasonable to assume many of them are oblivious to the 3G sunset. Carriers that are not conscious of the 3G sunset could end up having devices failing to register data during hauls, which could end up hurting their market prospects.
With the fragmentation that exists within the industry, information is not democratized in the ecosystem.
Even within the community aware of the need for 4G LTE transition, the urge remains weak. This is understandable, considering the freight rates today. Rocketing truckload capacity demand has made this a carrier market, pushing every trucking firm to look at expanding its fleet. Grounding a part of the fleet to get its 3G devices changed is probably not on top of a carrier’s priority list today.
With the market expected to remain hot for a considerable part of this year, the lingering question is thus—when will the impending 3G sunset dawn on our trucking community?
The Weekly Roundup
Apple has announced this week that there will be a shortage of iPads and Macbooks due to the ongoing semiconductor shortage crisis that has impacted all kinds of industries. The supply chain crisis has taken a heavy toll on global automakers as well. This has affected the transport industry as truck makers can’t churn out enough Class 8 trucks, leading to spiking prices in the used truck market.
ATL Partners led a $300 million investment round in freight brokerage firm Arrive Logistics, which is doing brisk business today—thanks to the burgeoning freight market. The company connects shippers with logistics carriers, witnessing its LTL business grow tremendously due to the rise of e-commerce. The company expects to increase its revenue by 48% this year, from the $810 million it made in 2020.
With emissions reduction a priority, a collective of UK rail and freight associations have written to the UK government to electrify more of its country’s railroads. The UK aims to decarbonize transport by 2050, which would require the electrification of roughly 8,000 single-track miles across the country. The Director-General of the Rail Freight Group (RFG) stated that electrifying the rail network was not a ‘choice’ for the government.
Drone startup Wingcopter has introduced the triple-drop delivery drone, which can make three deliveries per flight. Developed mainly for last-mile deliveries, the new drone can drastically improve delivery efficiency by hauling multiple packages in a single run. The Wingcopter 198, as it’s called, can carry three small packages, two medium-sized packages, or one large package over a haul.
While it is widely known that container shipping prices are at historic highs, the massive tonnage of commodities imported from China has boosted the bulk shipping segment within the maritime industry. Freight prices of Capesize vessels—some of the largest bulk carriers—have risen to an 18-month high this week, averaging around $35,000 per day. The rebound is stunning, considering the depths to which the industry fell at the heights of the pandemic last year.
...said who?
“There’s a leaderboard, and you can see who’s on top, but it’s not at the virtual worlds level.”
- Kristi Montgomery, the vice president of innovation for Kenco Logistics, commenting on their warehousing gamification which has improved productivity by 10% to 15% since its implementation.
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