Space technology is revolutionizing supply chains and mobility. This is how it will impact companies and consumers

There is much about outer space that humanity does not understand, but this has not stopped us from using space to advance our understanding of our own planet.

For thousands of years, humans have used astronomical observations to help them navigate the Earth. Take compasses, which are guided by the magnetic field that extends from Earth into space, or the lesser-known sunstones that Viking sailors used to help them locate the sun even on cloudy days. Famed Portuguese explorer Vasco da Gama reportedly used an astrolabe – a device that could measure altitudes at sea when the sun was directly overhead – to find his way to India.

Today, while we still use space to help us find our way around our own planet – the Positioning, Navigation and Timing (PNT) systems that many of us now have on our phones and in our cars get information from an array of satellites orbiting the Earth – technological innovations are going to new frontiers and opening up new possibilities in all sorts of areas.

Space is also becoming a key element in telecommunications systems, particularly to expand network coverage to areas where signals were previously unavailable. It plays host to large numbers of Earth Observation (EO) satellites that have a wide range of applications, from monitoring environmental protection efforts and helping farmers find the best times to harvest crops, to assisting emergency-service responses, particularly to natural disasters, and enabling energy companies to gather the information they need to optimize their site choices for renewables deployment and transmission infrastructure.

All of these developments are fuelling rapid growth in the global space economy, which is projected to expand to $1.8 trillion by 2035, from $630 billion in 2023. But the largest and fastest-growing segment is in an area called SCTM – supply chain, transportation and mobility, according to research by the World Economic Forum and McKinsey & Company.

Predicted size of the space economy, $ billion

The term SCTM covers the movement of goods and people around the world. It involves the use of all of the world’s infrastructure and transportation networks (rail, road, air, oceans), and companies in this sector are increasingly turning to space-based technologies to help them track, guide and optimize the movements of their cargo or customers.

Space technology helps because it offers real-time visibility of supply chains and transportation networks. The satellites involved also provide rapid data transfer, and for businesses that make the most of this information, there is a significant opportunity to unlock insights that can improve business efficiency and resilience.

NASA says that using space to help with supply chain management can help companies cut their costs by at least 35%, adding that it will “bring the solar system within the economic sphere of our society”.

Technology continues to advance and two central trends are emerging. The first is capability improvements in space technologies, from EO satellites to satellite communications and PNT systems. These systems are not only becoming more capable, but they are also becoming more cost-effective and less expensive to launch, enabling more organizations to see how space technologies can improve what they do on the ground.

The second trend is a rise in funding allocations for these technologies that is enabling companies to unlock more and more value from their activities in space. This shift is closely interlinked to the first trend, with cost declines in state-of-the-art connectivity and data processing making space technologies more economically viable for a wider range of businesses. The resulting rise in the level of data being picked up from space is creating opportunities that are enabling not just a small step but a giant leap for the SCTM sector.

Space is at a tipping point in providing ubiquitous, real-time connectivity, as well as in terms of data collection and distribution. By 2035, there are expected to be more than 6.4 billion space-connected devices across the supply chain network and its infrastructure (compared with just over 3 billion in 2024), as well as nearly 140 billion Internet-of-things (IOT) connected sensors (compared with approximately 36 billion in 2024).

This could be compared to flipping on billions of light switches in a previously dark room. It will enable companies to see possibilities they may have never even conceived of.

Combined with a rise in Earth-imagery satellites that are monitoring and collecting data on supply chains, infrastructure and the environment, alongside progress on the precision of navigation and positioning satellites, the question facing SCTM companies is how to best unlock the full potential of this vast amount of data, connectivity and real-time visibility.

Doing so could solve real business problems for companies around the world that would like to have hyper-accurate, second-by-second visibility of their shipments but are constrained by early-21st-century technology. It could make these firms more efficient and more resilient, as well as give them insights that could make them more sustainable and safer.

This would unlock vast amounts of value in not just the space economy, but in planet Earth’s economy, too.

Making the most of the potential that space technologies can offer will require a shift in mindset, according to the Forum and McKinsey.

It will further require the divide between space data and terrestrial-based IOT data to be not just broken down but discarded completely. This will enable “data fusion”, in which the two previously isolated information sources are merged.

Fusing this information is step one; analyzing it using AI and machine learning is step two, and the combination could create transformative potential for businesses. It would provide an unprecedented level of layered and holistic visibility over every inch of SCTM business activities, helping companies to reach more informed conclusions when making critical decisions and enabling them to see opportunities for efficiencies or new use cases that they would never previously have spotted.

For the SCTM sector, these use cases could emerge in three main areas – fleet management, marine connectivity and app-based mobility and delivery. Around 50% of space economy growth in 2023-35 is projected to come from these three areas.

Fleet management companies working in the shipping and trucking sectors are already integrating space and terrestrial platform-based sensor technology into vehicles.

By using devices such as engine sensors, PNT receivers and 360-degree cameras, they are enabling emissions monitoring, route optimization and real-time performance monitoring. Paired with machine learning, this is also empowering predictive maintenance and analytics, while combining it with AI is yielding suggestions for improvements in driving patterns, with implications for areas such as fuel efficiency.

This fusion of data harvested from space with that collected on the ground is the essence of what is known as telematics, an advanced method of monitoring vehicles in isolation and in relation to one another by combining PNT data with onboard diagnostics.

This is turning vehicles into “giant smartphones”, according to global freight company DHL, which is already using telematics on most of its delivery vehicles in the US. It is also using telematics in its SmarTrucking programme in India, where it is combined with sensors and IOT capabilities to provide drivers with optimized routes for their journeys.

“Compared to traditional trucking routing methods, it is estimated to reduce transit times by up to 50% while providing 95% on-time delivery and 24/7 visibility,” the company says, adding that this also reduces fatigue among drivers as they spend less time on the road, and allows them to go home to their families more regularly. DHL plans to consequently plans a tenfold boost to its IOT-enabled fleet to 10,000 trucks by 2028.

High-quality telematics is crucial if the mass rollout of autonomous vehicles (AVs) is ever to become a reality. It would allow AVs to effectively communicate with one another as well as with a city’s transportation infrastructure.

In the SCTM field, telematics can operate in a similar way, transferring data between all parts of a fleet to optimize the company’s ecosystem, in effect giving drivers and fleet managers multiple sets of eyes. This means vehicles following in the tracks of one another can avoid delays that may be caused by accidents, weather events or any other issue, improving fleet utilization rates and boosting bottom lines while also ensuring consumers and end-users get the goods they’ve ordered faster.

Telematics can also cut emissions by 5-10% and slash companies’ fuel costs, the Forum and McKinsey research points out. This is made possible by optimizing routing and speed adjustments, improving driving behavior and enabling predictive maintenance (vehicles emit less CO2 when they are in peak condition).

The use of telematics and the accompanying physical tech – such as PNT – is increasing, and as it continues to scale, the technology will become more and more cost-effective.

Some PNT sensors are already cost-effective enough to be designed for one-time use, and this is making it possible to track individual assets, from packages to livestock.

These data-rich, ultra-connected visibility services are projected to generate approximately $3 billion in additional profits for the trucking sector and are enabling new business models such as transportation as a service. It is also is dramatically reducing the risk of theft or fraud, which impacted 1 in 43 US freight shipments in 2023.

The main benefits of space technology for sea shipping revolve around reducing risks. This encompasses uncontrollable issues such as weather events, controllable issues such as port congestion, and third-party issues such as vessels involved in illegal activity (such as smuggling or breaching sanctions) that avoid traditional radars by turning off their onboard tracking devices

EO technologies will be critical in achieving these advances, as they allow real-time monitoring of these problems and create the potential for mitigation, whether by allowing ships to be re-routed or providing warning that protective or preventative measures need to be deployed.

Satellite and analytics company Synspective has combined EO data with machine learning in Tokyo Bay to allow monitoring of ships entering and leaving the port. The system has been used to control port congestion as well as to detect potentially illegal trading activity.

“Satellite remote sensing and geospatial data can tackle maritime logistics, planning, and management,” the company says. “They have the capability to analyze ships, containers and trucks at ports, recognize disruptions, and calculate future congestion… Automated ship detection saves valuable time.”

Pairing EO with PNT and space connectivity means that problems can be pinpointed, thereby enabling improved forecasting and predictions to be made for issues as diverse as port arrival times and fuel consumption.

Using remote sensing also means shipment-level commodity tracking is within reach – a potential game-changer for everything from just-in-time logistics and counter-smuggling operations to improving traceability to help verify whether specific goods comply with new rules on issues such as deforestation. This level of observation could also help enforce emissions monitoring on a ship-by-ship basis.

Overall, this level of enhanced visibility across the logistics value chain could enable up to $79 billion of cost savings each year across the SCTM sector, according to earlier McKinsey research.

Around half of these savings would come from increases in efficiency at ports. By improving flows of information between ships and ports – in terms of speed and accuracy – this could enable better container positioning and improvements in crane utilization rates. Factors such as this could lead to ports creating 11% more capacity without adding an inch to their physical footprint.

The ultimate goal for the freight sector would be full visibility of goods transportation across all modes of transport, enabling precise arrival times to be relayed along all legs of the logistics journey. This would rewrite the rulebook on resource allocation, taking efficiency and utilization to unparalleled levels, and the prospect of achieving this is expected to help drive a 12% increase in the number of space-connected devices in use by 2035, McKinsey estimates.

More than 7.2 million kilometres were covered by autonomous delivery vehicles in California in 2024. That marked a significant rise from 4.8 million kilometres in 2023 (itself a fivefold rise from 2022) and is evidence of an accelerating growth rate in these kind of activities.

Space-based PNT plays a central role in guiding these vehicles, and under certain conditions these autonomous solutions are proving to be safer than the average human-driven car, with initial reports from autonomous ride-hailing company Waymo showing that these vehicles resulted in 73% fewer crashes that caused an injury.

For consumers, the rollout of autonomous deliveries would mean potentially more accurate and up-to-the-minute tracking via app-based delivery services.

More and more of these deliveries could also start being handled by drones. These so-called unmanned aircraft systems (UAS) carried out more than 1 million commercial-drone delivery flights in 2023, and UAS shipments of meals, parcels and groceries are expected to grow by 27% (from 2022 to 2030) according to McKinsey.

For the companies behind these deliveries, switching to autonomous technologies has the potential to unlock up to $95 billion by streamlining operations and improving efficiency.

At the larger end of the autonomous delivery spectrum, self-driving heavy-duty trucks have been shown to have a total cost of ownership that is 42% lower than traditional trucks.

These vehicles are more prevalent in developed countries at the moment, but the benefits of app-based mobility and delivery powered by space tech are being felt more and more in emerging markets thanks to expanding smartphone use. App-based SCTM services are growing by 6-8% a year in these countries, double the rate of more developed nations, with 2 billion incremental users expected to be added by 2035.

And it’s not just consumers who will benefit, but workers too, with the number of people employed worldwide in app-based mobility and delivery services expected to surge to more than 90 million by 2035, from around 48 million today.

Space has played a rich if often overlooked part in the history of Earth exploration and navigation, but its role in the future is likely to become more and more prominent.

It is already becoming an indispensable pillar in modern supply chain infrastructure, and as space-connected technologies continue to evolve, SCTM sector leaders will need to remain at the forefront of this evolution or risk seeing their business disappear off the map.

They will need to understand how space technologies such as EO, satellite connectivity and PNT fit in with their organization – whether they can make existing operations more efficient or open up growth opportunities in new areas.

The space industry will also need to keep pace with the accelerating demands of an increasingly interconnected but also uncertain world. The potential future economic, strategic and operational value of space technology is as vast as space itself.

Additional reporting by Jim Adams, Partner, McKinsey & Company, and Ian Shine, Senior Writer, Forum Stories.