The true role of AI in logistics

By Bart De Muynck
The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

You can hardly read an article these days without coming across the term “AI,” or “artificial intelligence.”

Many folks will challenge the true value of AI and whether it is just more hype. At the same time, AI has already saved human lives by applying it in the medical analysis of kidney disease. 

So, let’s dive into the topic to figure out if there exists a real role for AI in the logistics industry.

The industry has been undergoing a profound transformation these past few years, driven by industry disruptions and the rise of cutting-edge technologies. AI’s ability to process vast amounts of data, to make intelligent decisions and to predict outcomes has made it an increasingly important tool in the logistics sector.

The integration of AI and robotics has led to significant advancements in warehouse automation. AI-powered robots can efficiently sort, pick, pack and organize inventory, speeding up the order fulfillment process. The intelligence is truly “artificial” where warehouse workers can be replaced by robots for many of the tasks performed. Additionally, AI-driven sensors, cameras and radio frequency identification tags enable real-time tracking and monitoring of inventory, allowing for better inventory management and reduced losses. This creates an abundance of new, real-time data in the warehouse that can be used for predictive analytics and improved controls of the warehouse processes.

The automation of warehouses is especially important at a time when there is a shortage of warehouse workers, the threat of union strikes as well as an ever-increasing cost of human labor. And so, the need to apply this AI in combination with robotics is no longer an opportunity but rather a necessity.

In transportation, the story is a little different. The human remains at the center of the transportation process.

But many folks are wondering if AI — specifically ChatGPT — will take over their jobs. I personally refer to AI as “augmented intelligence” when it comes to transportation. AI does not replace but rather helps humans to be more efficient, handle more volume, do their jobs faster and have better quality outcomes. And at the end of the day, people will like their jobs better, which helps companies with recruitment and retention that are vital in today’s “war for talent.” Companies should apply AI to assist transportation personnel in their daily operations.

Some of the main applications of AI in transportation are in optimization of trucking fleets with vendors like Optym, in yard automation platforms like EAIGLE, in visibility platforms like project44 (inventory in motion) and Mojix (inventory at rest), in risk management platforms like Everstream Analytics, or freight spend analytics solutions offered by Intelligent Audit.

The ever-growing amounts of data being collected on these logistics platforms make them a prime candidate to use AI. AI is being used to improve data quality, generate synthetic data through generative AI when real data is not available and provide valuable insights through predictions or forecasts. One of the most significant contributions of AI in logistics is its powerful application in predictive analytics fueled by explosive growth in data.

By 2025, 181 zettabytes of data will be created, which is the equivalent of 200 billion iPhone 14s.

Combined with exponentially increasing computing power, larger models capable of doing more complex tasks can be created. These predictive analytics will continue to evolve into prescriptive analytics and will ultimately lead to the automation of larger parts of workflows.

But the question remains: Are companies ready to fully utilize AI? 

Although technology has made huge leaps in recent years, technology alone cannot fix the problems in logistics. Digital transformation requires three critical ingredients: the right digital talent, adjusted business models and processes, and the right mix of technology.

Most companies currently do not have the level of digital maturity, the right talent or the mindset to take full advantage of what AI has to offer. Companies need to change their behaviors from looking in the rearview mirror to what has happened and start looking forward to using real-time and predictive insights. They need to trust the data that allows them these insights on which they can make instantaneous decisions and then execute them.

Only then will real change happen and can digital transformation be achieved.

Look for more articles from me every Friday on FreightWaves.com.

About the author

Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.

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