In a connected world, the way we ship goods has transformed. Without the ability for seamless logistics, the global economy grinds to a halt. Recent strains on global logistics because of COVID-19 have sped up trends in technology adoption that were occurring already. One of the most significant technologies that have seen an uptick in use is artificial intelligence (AI) and subsets of the domain, including machine learning (ML) and deep learning (DL).
If this is your first time encountering this technology and its related terms, we have you covered. Check out these past blog articles where we dive into and answer, ‘What is artificial intelligence?’
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One common misconception about logistics is that it functions almost siloed off from other industries. This is not the case. Logistics touches everything from manufacturing to consumer pricing and insurance. While this is not an exhaustive list, technology adoption in transportation can have a downstream impact on how other industries price their products and bring them to market. For those reasons, all professionals should keep an eye out for new trends in logistics, and what it means for your specific business.
A changing industry
Front’s 2019 Logistics Trends Report found the respondents agreed that strategic technology investments were pivotal to keep up in a fast-paced, ever-changing industry. Specifically, the study found that 56% of companies spend over $100,00 on workplace software investments every year and that most companies are investing in other technologies to become digitized as well:
- 77% have said they have digitized their operations
- 81% said they plan to increase spending on software over the next two years
- 84% of companies said that they are interested in introducing some sort of automation
The reason most companies have made these investments and plan to keep investing is simple: they need to invest in technology in order to scale their business and increase their sales.
Today, consumers are used to being served faster than ever before and they expect 24/7 customer service, largely in part to the “Amazon Effect.” The only way companies can keep up with these growing demands is by using technology to optimize processes and speed up the supply chain.
Where AI is making an impact in Logistics
Transportation is an extensive field, and as you might expect, there are many areas where emerging technology is making an impact. For this blog, though, we focused on areas that have a ripple effect on other industries.
AI boosts logistic automation of warehouse management and optimizes supply chain planning
We can optimize warehouse management by conducting accurate calculations of the number of items and equipment needed for a given time period. With the help of machine learning in logistics, it is possible to ‘touch’ items less with predictive analytics and increase the overall productivity of pick-and-pack processes.
Logistic automation systems can also vastly improve the speed and accuracy of the communication process. The elements conduct a dialogue with each other embracing system monitoring and control which ensures efficient warehouse management and provides the supply chains with contextual intelligence that allows making effective planning decisions based on the range of factors like the demand, possible transportation issues, and factory production planning.
AI in Logistics promotes autonomous vehicles
The popularity of autonomous vehicles is rising with breakneck speed. One reason for this is the contribution the artificial intelligence makes to outperform human driving capabilities. AI allows the vehicle to perceive and predict the changes in its environment with the help of sensing technologies that perform together to produce a three-dimensional map of the vehicle’s environment, including traffic signals and laws, interpreting road signs, identifying obstacles, etc. Without a possibility to hard-program a vehicle to react to every likely scenario, the capabilities of vehicles need constant refinement with the help of AI as they enter the new surroundings.
Most B2C interactions have just two touchpoints: during checkout with an online retailer and receiving delivery or returning the item. While for B2B, the touchpoints are multiple: long-term contracts, operation of global supply chains, service level agreements, etc. AI in logistics can increase customer loyalty and retention through the personalization of these touchpoints.
One example is a voice-based service that was adopted by DHL Parcel in 2017. Their customers became able to ask Amazon’s Alexa the shipment information about their parcels. Logistics data analysis has the potential to take customer experience to the next level, delivering goods before they have even ordered them. Drawing insight from logistical data services, browsing and purchase history, weather data, and social media, companies can predict the next order a customer will make. Other use cases include demand prediction and shortening delivery time.
Wrapping it up
AI in logistics has far-reaching implications for transportation. With logistics affecting every facet of the economy, the adoption of new technology is likely to ripple across other industries as well. New use cases for artificial intelligence arise constantly in logistics, making this industry one of the most rapidly growing users of AI. As logistics is a backbone of the global economy, this is one sector that everyone should keep tabs on.