Artificial Intelligence in Logistics. Is There a Place for AI in Our Industry?

The development of artificial intelligence (AI) is no longer a walk, not even a run, but a real sprint. AI solutions are rapidly entering new industries, significantly transforming the way various companies operate on a daily basis.

Modern logistics is an industry characterized by significant complexity of processes. How can AI change the landscape of our industry in the coming years? Is there any room for support from AI technology in logistics? In this article we will try to answer these questions.

AI in logistics: route optimization

In an interview regarding usage of transport management systems, Arkadiusz Rozumek (EU Senior Manager, Carrier Sales at Coyote Logistics) stated:

“When I observe the dynamic development of artificial intelligence, I think that in the coming years there will be more and more innovative solutions that will support the everyday work of forwarders and dispatchers.”

One of the areas in which AI can provide support to logistics professionals is route optimization. AI tools implemented into TMS software can analyze traffic patterns and current and historical data on weather conditions in a given area or route. Based on the analysis, AI can propose the most optimal routes for trucks. That’s not all, because artificial intelligence can use information from past or current social media activity to forecast traffic disruptions and update planned vehicle routes on this basis. This will allow drivers to avoid potential delays. Thanks to this, punctuality of deliveries can increase and fuel consumption costs will be reduced. The use of AI algorithms to optimize routes also has an ecological aspect, because it may also result in reducing the carbon footprint of logistics operations.

AI in logistics: warehouse management

Artificial intelligence can also improve warehouse operations: packing, sorting and even inventory replenishment processes. In the case of packing and sorting, human activities can be assisted by robots guided by AI algorithms, thus limiting the risk of human error, increasing efficiency and reducing operating costs. AI tools, by analyzing historical data on changes in inventory levels over time, can predict when a given type of product will run out and order it in advance, which will result in an optimal inventory rotation. In the area of warehouse management, AI can also be used to predict energy needs and optimize electricity consumption, which will result in both cost savings and will also be beneficial for the environment.

AI in logistics: demand forecasting by shippers

AI in logistics can be used to run predictive analyses, thanks to which shippers will be able to forecast demand for their goods with greater accuracy, and thus guarantee inventory levels correlated with the expected scale of demand. Artificial intelligence can analyze past data to predict seasonal spikes (or due to various types of cyclical events) in demand. This will allow shippers to allocate resources in advance, such as needed warehouse space or transportation needs.

AI in logistics: what about the future?

Autonomous trucks may become the future of artificial intelligence in the logistics industry. For now, however, driverless cars “powered” by AI are still in the early stages of development and it will take years before this technology is safe and reliable enough to become widely popular. The same applies to small drones delivering parcels or robots used for the same purpose, also using AI technology –they are constantly developing and will probably revolutionize courier services in the future, but it will be a long time before they become common.

AI in logistics: what to remember

A certain barrier to the dissemination of AI in the logistics industry are the costs of purchasing and implementing artificial intelligence technology in the enterprise, as well as the need to allocate additional financial resources and time to properly train employees in the use of AI tools. The latter’s reluctance to use technology, which they may be afraid of for various reasons (one of them may be the fear, currently unjustified, that AI will deprive them of their jobs) may also constitute a certain difficulty.

Once a logistics company implements artificial intelligence solutions, it will be necessary to follow certain guidelines to ensure that the use of AI is risk-free for the company. These include limited trust in the results of AI work, constant human supervision over AI tools, the use of artificial intelligence only as a support in everyday tasks, rather than a technology that will fully take over this work, avoid sharing sensitive company data with AI, and prepare an AI policy in the company, which will detail all the rules regarding the use of artificial intelligence in the enterprise.

Answering the question stated in the title of this article, we can say: there is definitely a place for AI in the logistics industry. The use of artificial intelligence in logistics can result in better optimization of processes taking place in the enterprise, optimization of costs, and increased employee productivity. We can therefore say that we are currently witnessing the process of popularization of AI tools in logistics. However, it must be remembered that their use by logistics companies should be done in a conscious, safe manner, in accordance with applicable regulations, under constant human supervision and in such a way that the benefits for the company that AI brings do not mean any harm to one or all stakeholders.

Data sources:

• https://www.forbes.com/sites/forbestechcouncil/2023/08/17/the-true-role-of-ai-in-logistics/
• https://www.economist.com/special-report/2018/03/28/how-ai-is-spreading-throughout-the-supply-chain
• https://transportlogistic.de/en/discover/industry-insights/detail/artificial-intelligence-revolutionizes-logistics.html
• https://www.linkedin.com/pulse/impact-artificial-intelligence-logistics-industry-ritesh-pandey-/
• https://en.codept.de/blog/5-ways-to-use-artificial-intelligence-in-logistics