It is evident that AI is already very prevalent within the Logistics World and is drastically changing the transport and warehousing sectors. However, is it changing the Logistics industry for the better? And what does that change look like?
What does AI look like in Logistics?
To understand how AI is changing the logistics industry, first we must comprehend what AI actually is.
AI, or Artificial Intelligence, is made up of multiple technologies which work in sync with machines to think like humans or arguably better and faster than humans. With AI assistance, machines have the ability to predict trends, interpret them, learn from them and implement actions according to the data it receives.
Applications for AI in The Logistics Industry
AI in logistics has many forms. The justifications for utilising AI can be seen in many operational areas, including:
- Customer demand trends
- Planning and resource management
- Route optimisation
- Marketing
- Warehouse automation
Where has AI changed the Logistics industry?
From robots carrying pallets to self driving vehicles, the mainstream media has painted a picture of a truly autonomous industry. In reality, we are seeing a vast increase in the use of AI across the logistics industry from SMEs to the biggest businesses.
Route optimisation has really benefited from the input of AI. Creating efficient routes in a World where sustainability seems, rightfully, to be the goal across the board. AI allows for real-time route optimisation from simple and easy-to-access solutions being utilised by drivers and small transport teams to truly autonomous end-to-end delivery systems such as those used by companies such as Dominoes and Amazon.
Going back to robots carrying pallets for a second – warehouse automation seems to have the largest increase in AI involvement. AI has helped logistics companies automate and optimise their warehouse operations with autonomous operational robots, sensors, RFID tags and even computerised picking, packing, sorting and storing.
AI has also helped logistics companies plan and optimise their supply chains by forecasting demand and supply. Analysing risks ahead of time and co-ordinating suppliers, customers and internal units.
The AI journey in the Logistics industry does not just stop at the supply and despatch, though.
We, as consumers, are seeing the advantages of AI within the transport sector too. From being able to collect our parcels from automated lockers to being able to track our shipment live on a map, on a simple app on our phones. The end user is also disadvantaged in some respects with the utilisation of AI, though, as AI is implemented to dynamically price goods or services…The more the demand, the higher the price.
A really good example of this falls out of the logistics sector but puts dynamic pricing into context – The Uber app. The AI uses an algorithm to set prices according to demand in the area, number of drivers in the area and a whole host of other contributing factors. These prices update in real-time for the end users whilst the rates for the drivers go up and down to essentially guide drivers into areas where there is more demand and more potential to earn.
How will AI shape how Logistics looks in the future?
It is almost incomprehensible to imagine what other Artificial Intelligence are in the pipeline or how it is going to manifest within the logistics industry.
It is fair to say that utilisation of AI will only grow within the sector with the uptake of autonomous vehicles, drones, smart lockers, smarter data collection and trend identification.
A research project has suggested that the use of AI has helped businesses improve logistics costs by 15%, inventory levels by 35% and service levels by 65%. If those figures are to be believed, and can be replicated across a broad array of real-world environments, then it is safe to say that the logistics and AI partnership will only grow, leading to further investment into AI technologies and introducing more aspects of artificial intelligence across the sector.
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