The Future of Logistics: How Artificial Intelligence Will Change Logistics Execution

In recent years we have gotten familiar with hearing how artificial intelligence (AI) will change various businesses. Among them, logistics is also one of the industries to be affected by this new wave.

What is Artificial Intelligence (AI), and how is it different from Machine?

A machine operates and perceives things in accordance with the logic programmed by a human. On the other hand, Artificial intelligence (AI) is defined as a computer or a program able to solve problems or learn from historical data. Unlike a simple machine or robot which recalls the solution saved for the same problem, AI can implement a new solution from what they have learned.

Then how AI can be implemented in the logistics business?

Optimized Planning

Many expect AI will allow a company to organize large-scaled data and extract meaningful information to make a decision. In the complex and dynamically changing environment, the algorithms will derive predictions on the demand patterns and potential risks that may directly impact the company outcomes. This also can be grounds for executives in logistics to allocate resources in a more efficient way, such as employee, inventory, and vehicle mobilization.

The AI system can also utilize satellite maps to seek the most efficient routes considering the traffic, which will save the trucking charges and fuel costs. Furthermore, it can seek the most optimized container and truckload plan based on the variance of cargo specifications, market situations, or assets.

Effective Warehousing

From the vast amount of data accumulated daily, AI will be able to read the trends about which items are ordered more frequently and when they will be shipped out. This data enables businesses to come up with more efficient solutions to distribute the cargo into different warehouses or the location within a warehouse.

These trends also result in reducing the amount of work and time when the goods are picked up, since the AI places them in the productive order considering the traveling route and congestion.

The other benefit we can expect by using AI is that the systematized control will help reduce human mistakes. Information about hundreds to thousands of products is well organized in its own system, allowing it to prevent the risk of picking up the wrong product.

Automated Transportation

A self-operating vehicle is one of the most notable revolutions AI can bring to the logistics business. Not only wage-wise but also it can provide better consideration for drivers’ health with optimized routes and reduced driving time. A drone can also be a great shipping option to expand the delivery area to the destination where the trailers cannot reach the lower cost.

Another critical part of the logistics business is tracking shipments, AI-based systems with big data management and automated trucking will make it possible to provide the real-time shipment track with accuracy, even predictions for a delay. 

According to P&S Intelligence, the global AI market for transportation is expected to reach USD 3.5 billion by 2023. At this time, AI technology has a long way to develop for application to the field; however, there is no doubt that it will dramatically change the way global logistics works and improve its efficiency.

Contributor: Hana Kim

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About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia and Allyn regional headquarters are strategically located in Fort Myers FL USA, Shanghai P.R. CHINA and Prague, CZECH REPUBLIC. For more information, log on to www.allynintl.com.