Artificial Intelligence in Logistics


Artificial Intelligence (AI) is definitely here to stay, and it’s easy to understand why.

Leading industries such as technology and finance have fully embraced AI and are using it to power it’s existing solutions and to innovate. However, other more industrial sectors such as Logistics are barely beginning to understand the importance of AI and the limitless benefits that it can provide.

So what is AI exactly? In a nutshell, it can be defined as human intelligence displayed by machines. Systems that can approximate, mimic, replicate and automate human thinking, and eventually even improve upon it.

Although there is no doubt that AI will bring about massive change, similar to what the Internet did in the 90s, it still has a very long way to go. AI is still in its infancy stage and its biggest hurdle is the fact that there are many people who simply don’t fully trust it. This is due to the hype generated by its supporters saying that AI will replace human work, thereby leaving many people without a job.

For this reason when introducing artificial intelligence to companies, it is important to apply it gently. Make changes step by step and help people understand it is not a tool of replacement, but rather a means of enhancing or upgrading any given job.

Why Logistics? Why Now?

Now is the best time for Logistics to embrace AI. Due to its technology shift, never before has the industry had this amount of technology so accessible and affordable. Companies that decide not to embrace AI run the risk of obsolescence in the long term, because believe it or not, AI will be a key component of the Logistics future.

Logistics companies are in the unique position of reaping benefits in almost every aspect of the supply chain by adopting AI. Many companies are embracing the digital transformation, updating both software and hardware to prepare for the Logistics 2.0 era. AI can help the industry redefine today’s behaviors and practices, making them proactive instead of reactive. We can stop planning and begin predicting; a process will become autonomous and standard services will become personalized.

As in many other industries, AI can be applied internally in the company (Back Office) as well as externally (Front Office).

How Can AI Be Used in the Back Office?

AI presents a one-of-a-kind opportunity to save time, reduce costs and increase both productivity and accuracy. This is due to Cognitive Automation, which will perform routine tasks that usually take time away from an employee’s more urgent work. Thanks to the combination of RPA (Robotic Process Automation) and AI, these everyday tasks will be performed by automated systems. This allows employees to dedicate 100% of their time to the most important, money-generating job functions.

These automated routine tasks can be:

  1. Gathering of Financial Information: Logistics providers often rely on multiple third parties in order to operate core functions of their business. AI can process all of the necessary financial data such as billing amounts and other types of account information. AI can optimize time and money by processing and extracting financial information.

  2. Contract Processing: Normally Logistics companies need to handle multiple long and complex contracts at a time. With AI machines similar to IBM’s Watson, which interpret these contracts in a matter of seconds, Logistics companies can stop wasting time and money on fancy lawyers that often take days, if not weeks to read through contracts.

  3. Customer Information Processing: Keeping customer information updated is a challenge for any large company. In Logistics making sure addresses and other customer information is accurate is crucial for the operation of the company. CircleBack, an American startup, has developed an AI engine that helps to manage the contact information of any company.

  4. Customs Processing: Customs tend to be a long and exhausting process for everyone involved. Delivering the correct data and documents, declaring the goods, having the customs officers validate the information and figuring out the final customs cost of every declared item is a long but necessary process for every Logistics company. With the same platform used in Contracts (Watson), Customs or Freight Forwarders can significantly speed up the process. Instead of having an individual inspect every document, a machine can process all paperwork in a matter of seconds.

Predictive Logistics: The Operational Upgrade

AI can help the Logistics industry fundamentally change its operational model from reactive actions to proactive operations with predictive intelligence.

  • Predictive Network Management: AI can advance the performance of Logistics operations. For example, DHL has developed a machine that can predict air freight transit time delays. This helps the American company enable proactive mitigation, thereby preventing any delays on their flights.

  • Intelligent Route Optimization: It is critical for any Logistics company to know the most efficient, fastest and best-suited route for every customer. This will reduce costs, save time and improve customer satisfaction. This is why in the early 2000s Deutsche Post pioneered the SmartTruck system, which develops proprietary real-time routing algorithms for all of their truck operators and drivers. This allows them to deliver each and every one of their packages in the shortest amount of time possible.

  • Satellite Imagery: The newest and most significant player in personal transportation, Uber, uses this system to predict the time and cost of every ride. This lets customers know exactly how long the ride will take and what the cost will be, before they even get in the car.

Artificial Intelligence will help Logistics operators see, understand and interact with the world in a faster and more efficient way than ever before. We believe that the future of AI in Logistics is very promising, with unlimited potential. AI is becoming a bigger and bigger part of the day-to-day business of the Logistics industry, accelerating its path towards a proactive, predictive, automated and personalized future.

We believe the time is now for AI in Logistics…do you?