Since its launch, AI has been reshaping the eCommerce industry every day. With its advanced capability, artificial intelligence has left its mark in every part of eCommerce and transformed the way people purchase online.
Logistics is also no exception! When the giant retail brand Amazon started adopting AI technology to improve logistics operations, it became a trend in the industry and this trend shows no sign of waning. In 2022, the global market size for artificial intelligence in supply chain and logistics stood at USD 5172.68 million and is estimated to have a consistent CAGR of USD 15010.88 by the end of 2028.
Here, we will look at the 7 game-changing use cases of AI that are revolutionizing the entire logistics sector.
Smart courier allocation
Every courier has its own specialty and unique strengths. While some logistics firms excel in catering to remote areas, some stand out for their excellence in shipping time-sensitive goods. Likewise, certain couriers are proficient in fragile goods shipping. For example, Blue Dart is known for handling heavier shipments, while DHL is adept at transporting high-value goods.
That is why a few shipping software in the market integrate the smart courier allocation technique. Based on the suppliers’ needs or the type of shipments, it strategically allocates the most appropriate courier, which further enhances the overall efficiency.
Route optimization for seamless transportation
Gone are those days when route optimization was heavily dependent on manual planning. As it was based on fixed statistics and rules, it often led to longer delivery times and more fuel consumption. AI has fixed this problem to a great extent. It analyzes data from traffic sensors, GPS tracking, and weather forecasts to identify the optimal route with less traffic and lower accident risks. As a result, the shipments reach their destination in a fast and secure way.
Let’s take some examples. Delhivery uses an AI algorithm to optimize the delivery routes. Likewise, DHL has incorporated an AI-powered system called “Cubicycle” for better route planning within urban areas.
Smart warehouse management
The integration of AI in warehouse management is a secret sauce of logistics success. When different AI-based systems like AR (Augmented Reality) and robotic technology are incorporated into warehouses, the operational processes become faster and error-free. In fact, it also saves a huge chunk of labor costs.
For instance, AR-powered devices can swiftly scan item-level RFID tags or barcodes and present important information like inventory levels, expiry dates, and product details. On the other hand, robots automate most manual tasks like material handling, picking, packing, and space utilization. Apart from these, AI also analyzes historical data, market trends, etc., and contributes to efficient inventory management through demand forecasting.
Take Amazon as a burning reference. It has recently launched a new robotic system called ‘Sequoia’ to identify and store inventory at the fulfillment centers. Amazon itself stated that this new adoption has successfully improved the speed of finding products by 75% and reduced the processing time by up to 25%.
Autonomous vehicles in last-mile logistics
As autonomous vehicles can operate 24/7, it helps companies provide constant service to customers. These vehicles are equipped with advanced sensors. Consequently, they can avoid obstacles easily. Minus Zero (a Bangalore-based autonomous vehicle development company) has launched ‘zPod’ which can travel in any geographical location without any human intervention. Hence, it can be used in any sector, including logistics.
Some companies also use drones to reach hard-to-access remote areas. Amazon’s Prime drone technology (the MK30) can even function in adverse weather conditions and reach customers within an hour.
Fraud detection and prevention
Though AI is in its beta phase, it still does a great job (far better than human intuition) in detecting supply chain fraud. It can efficiently analyze vast datasets and establish normal patterns of behavior within the supply chain. Plus, it also leverages past data to predict potential risks. Thus, AI is helpful in billing fraud detection, supplier risk assessment, and cyber threat mitigation.
Computer vision for quality control
Computer vision is a field of artificial intelligence that enables machines to understand the visual data from their surroundings – just like humans use their eyes and brains. In logistics, this computer vision can be harnessed in multiple ways to keep up with the quality standards. For example, it can be used to automatically inspect products/packages, identify defects and analyze the dimensions of cargo.
Mahindra Logistics, for instance, has achieved significant accuracy in package counting and inspection across all its warehouses by integrating AI computer vision.
Co-Founder
Tech & Product, ClickPost
Efficient returns management
No doubt, returns management is a daunting task for retailers. Thankfully, AI can help them in this case, too. In fact, most post-purchase experience platforms leverage AI to enhance the efficiency of reverse logistics and ease the retailers’ decision-making process. AI can quickly evaluate return requests, check product quality, and identify the reasons behind returns. Plus, it can also detect fraudulent returns and recommend the most suitable alternatives to the customers.
Step beyond limits by integrating AI in logistics operations
While humans can only use manpower and leverage intuition, AI has the capability to go beyond and make effective choices. It offers untouchable efficiency, makes accurate data-driven decisions, and speeds up the processes so retailers can optimize the logistics operations with a far better approach.
