• 25-01-2022

Benefits of AI implementation in Logistics

AI’s innovations have reached the world of business across many industries as well. For the supply and demand chain and logistics operations, AI has been a game-changer.

Let’s look at the top advantages of integrating Artificial Intelligence in Logistics.

Enriching Data Quality

First and foremost, the primary benefit of AI’s application in logistics will always be the quality of the data it helps to ascertain. Capacities within AI, such as Natural Language Processing (NLP) and Machine Learning (ML), help accurately obtain and organize information that pours into logistics companies at insurmountable volumes every day. NLP can understand terms, phrases, and even jargon that is commonly repeated, and ML can draw connections between these key points—creating context and learning as these words evolve.

Better, faster global connections allow AI to be more accurate than ever before, and when applied to logistics, it will enable optimal data usage within shipping. Avoiding risks and creating more efficient solutions, AI maximizes resources and slashes costs. With synergy between man and machine, enriched data can help tell a company where they need the precise amount of people and assets when they need them, and for how long—even in multiple locations.

With improved information authenticity and consolidation, more insight is gained, and logistics companies can make needed refinements across the board for day-to-day operations in a high-demand era.

Improved Predictive Analytics

In the past, logistics planners assessed the state of operations manually—mostly by hand on pen and paper. Even with years of experience through trial and error and shrewd gut feeling, there is no way that logistics professionals can ensure optimization alone in today’s day and age. Sorting through data analytics, capacity estimation, and network analyses makes it nearly impossible for the human brain to know how to optimally transport a single shipment from point A to point B at any point in time. Not to mention that these processes are very time-intensive, and the variance of every component only escalates in peak times or as a company grows larger.

That is where a solution powered by AI and predictive analytics comes in.

Better Transportation Forecasting

It was projected that AI would increase productivity in logistics by more than 40% by 2035. Efficient output in the supply and demand chain is especially make-or-break now, with E-commerce exploding—up 33% to $792 billion in 2021 alone.

Today, having a crystal ball capacity to forecast where assets are needed is a huge advantage. AI can be linked into a multitude of databases along the transportation chain, procuring information on all available components and opportunities, and providing a roadmap to enhanced feasibility.

Optimized Linehaul and Last Mile Planning

In 2021, there was a 24.3% increase in the parcel and last-mile segment of transportation from growth in E-commerce and home delivery. Rather than subscribing to subjective guesswork, logistics companies need to apply AI to linehaul planning to streamline and enhance overall operations.

Oftentimes in shipping, transport networks are complex, and figuring out the supply chain never is a singular equation. AI leverages the potential of shipment data, allowing companies to derive informative insights and better optimize their fleets. These innovations can take all user requirements and business constraints into account and provide the optimal linehaul capacity to help automate and schedule logistics plans for superior functionality.

With a capacity to predict forthcoming volumes on the most granular level, every leg of a shipment’s journey can be solidified. This is especially prevalent in last-mile planning, which brings in the currently dwindling element of service level into play.

By understanding all the external factors that might occur along the arduous line of a shipment, AI can help logistics technology companies plan around unnecessary roadblocks and remain efficient—especially in the last mile of transportation. Unlocking informed data for linehaul planning through AI will set companies apart from their competitors because they can prove in real-time that they can both literally and figuratively deliver.

How to leverage AI for Logistics?

2021 has been a game-changing year for logistics technology solution companies. AI is due to growing from 12% to 60% within logistics over the next five years—showing how important it is for logistics players to get on board with these innovations.

To stay competitive and leverage physical assets and infrastructure to the fullest logistics businesses need to take their digital organization as the priority.