Supply Chain & Travel Logistics: AI
Artificial intelligence plays a critical role across the supply chain for the logistics industry. Importantly, artificial intelligence has been adopted at divergent rates across autonomous vehicles, assisted driving, and package delivery. AI adoption has been driven by retailers and customers in the logistics industry.
Low adoption of AI
- As an emerging technology, logistics companies have not largely adopted AI. Heavy capital investments are largely to blame for low interest by use of AI by logistics companies.
- Significantly, only 21% of logistics firms in a McKinsey's survey had engaged in deploying AI solutions after initial testing phase.
Customer driven AI adoption
- With AI, logistic companies can improve interactions with customers across the supply chain.
- UPS has developed UPS My Choice and UPS Chatbot for interacting with customers using AI. UPS My Choice assist customers to decide how, where and when home deliveries occur whereas the UPS Chatbot uses AI to create human conversations with customers regarding the status of their deliveries.
- Importantly, 38% of consumers believe that AI can improve customer service. Customer demand for improved customer service has contributed to 53% of service organizations expecting to develop customer chat bots within 18 months.
Retailer driven AI adoption in the supply chain
- For retailers, the supply chain plays a critical role in overall organizational profitability.
- Importantly, 37% of retailers are investing in AI to enhance supply chain logistics especially in internal operations.
- With AI, retailers can optimize operations and reduce costs. UPS developed Enhanced Dynamic Global Execution (EDGE) to tackle these challenges and make its logistics network smarter.
AI for Autonomous vehicles
- Self-driving capabilities for vehicles will transform logistics operations in the future. Already, companies such as Tesla, Uber, GM, and Mercedes are working to develop self-driving capabilities for vehicles.
- The use of artificial intelligence to drive and operate trucks will significantly reduce operational costs of hiring truck drivers while increasing operational efficiencies. Importantly, logistics operators will have full control over their operations with limited downtime.
- In the next 5 to 10 years, the trucking industry will already have autonomous systems. Before the onset of full self-driving capabilities globally, logistics companies are utilizing AI for assisted driving
AI for package delivery
- Package delivery faces multiple challenges such as manual entry of package data, delivery delays, delivery rescheduling challenges, and lack of information on the progress of the delivery. AI can significantly tackle these package delivery challenges.
- Mercedes' CoROS technology (Cargo Recognition and Organization System) utilizes AI for weighing packages, determining their optimal shelf location, automatically reading and logging in bar code data and tracking packages movement within a transit vehicle.
- AI operated drones for supply chain logistics will grow at an annual growth rate of 66.8% between 2017 and 2023.