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InformationWeek 500: New Technologies Fuel IT Spending At Logistics And Transportation Companies


Systems focused on efficient operations may be the cause of a boost in logistics and transportation companies' IT budgets, as market leaders push ahead and competitors try to keep up.



The three-year freeze on IT budgets in the logistics and transportation industry may be thawing as customer self-service, global positioning, and automated fleet-tracking and maintenance systems offer new economies of operation.

Three-quarters of logistics and transportation companies say they expect IT spending to rise this year, according to the InformationWeek 500 survey. Only retail and consulting and business services came in slightly higher.

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click image to view the Logistics & Transportation Industry Snapshot
That expectation defies three years of results that show IT budgets in this industry segment have been static, at 2% of annual revenue, down from a high of 4.8% in 2002. Systems focused on efficient operations may be the reason for those budget boosts, as market leaders push ahead and competitors try to keep up.

Rising fuel prices make obvious the advantages of an IT application that tracks the whereabouts of fleet vehicles and applies a set of boundaries to their routes. That practice, known as "geofencing," can alert fleet managers if drivers stray off course or need a route correction. Also, sensors placed around the trucks can feed information into a local area network on the vehicles for analysis at the maintenance motor pool. Trucks built by International Truck & Engine, for example, can send alerts to headquarters on components that aren't running normally, allowing mechanics to pull vehicles off the road for preventive maintenance before they break down.

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