8 ways in which AI helps the logistics industryby@monish-reddy
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3,174 reads

8 ways in which AI helps the logistics industry

by Monish reddyAugust 19th, 2019
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The world of logistics has been completely transformed with the advent of newer technologies, especially AI, and it is not a luxury anymore but a necessity for a business in this industry to thrive. The sales of warehousing and logistics robots will reach $22.4 billion by 2021, according to Tractica. Let us see 8 ways in which AI is changing the logistics industry: It can help predict demand, optimize delivery routes and manage networks. It can also help in navigating through any emergencies as it gets better at predicting events.

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The world of logistics has been completely transformed with the advent of newer technologies, especially AI, and it is not a luxury anymore but a necessity for a business in this industry to thrive. 

Artificial intelligence is seeping its way into every industry imaginable and the logistics industry is not going to be left behind. Independent market research firm Tractica estimates that the sales of warehousing and logistics robots will reach $22.4 billion by 2021. AI just spawned a billion dollar industry in a sub-niche! 

Here is a real-world example of how AI saves money and improves business processes. Supply chain company United Parcel Service (UPS) saves 10 million gallons of fuel every year thanks to the insights of Big Data coupled with AI. 

As the days go by, it is expected that latest technologies like AI, Machine Learning and Big Data will bring in more groundbreaking innovations that can completely alter the way we work now, in logistics or elsewhere. 

Image courtesy - freepik

Let us see 8 ways in which AI is changing the logistics industry:

#1 Helps with demand forecasting

One of the most game-changing aspects of AI in logistics is going to be its ability to predict demand, optimize delivery routes and manage networks. The predictive analytics part of AI helps companies make significant changes to their business based on the patterns that AI unearths. Its ability to objectively measure the factors that lead towards efficiency helps its prediction in demand accuracy. The forecasting is not a one-time thing, it can also predict trends based on different variables like weather, real-time sales and other exigencies. 

Being able to predict the number of sales expected from a particular region or the amount of delivery trucks needed will help the logistics, supply chain and transportation planning team. Using IoT, it can also determine when a vehicle needs servicing, or a specific service so that there is no breakdown during the middle of a delivery. 

#2 Big Data

The term ‘Big Data’ was already a buzzword a few years back, the number of ways in which it can benefit mankind is only getting bigger. The data that you get in logistics is not always refined, which is where AI comes into play by using algorithms to clean the data. Big Data with AI helps predict shipping volumes and plan for the future based on historical data. It will take into account other factors like weather, political landscape, etc, and make such decisions. 

Another aspect of AI that makes it super important in the logistics niche which has tonnes of data is that it can gather data from all touch points, analyze it and come up with patterns that can help make significant changes in the supply chain management. There is a lot of structured and unstructured data that the AI platform receives, it can combine all of them ‘intelligently’ to good use. 

#3 Assists in last-mile delivery

The focus of last-mile delivery is to ensure that the goods reach the customer as fast as possible. When an order is placed, there should be a system to ensure that the product is sent through the right channels, is packaged properly, and a delivery time range is informed to the customer and so on. Making people do this is a tedious task and costly. AI makes this an extremely smooth affair by managing the different data points and assigning the executive as well as predicting the time it takes for the order to finally reach the customer. In fact, AI drones have also been employed in a few parts around the world as a part of last-mile delivery logistics. 

#4 Real-time decision making

In logistics, there are a wide range of tasks that require data to make decisions. For ex, finding the best possible route, scheduling and choosing the most optimal carrier. All of these decisions will take a few minutes for the average human mind to compute. But with the help of AI, there is an instant solution for it as sifts through thousands of data points. All of this takes only a few seconds and the accuracy is obviously spot on which is what makes AI much more exciting in this sector. 

#5 Creates contingency plans

Like most aspects of life, the uncertainty of things going completely haywire in business is expected too. It is hard to be extremely well prepared in terms of exigencies that are beyond your control. AI is trained in such a way that it can not only prepare for exigencies but also predict the best method to tackle such situations. It can also work on corrective measures so that such situations can be avoided in the future. The AI grows in tact as it keeps facing situations which makes it a very important asset as it gets better at predicting events and help in navigating through any emergencies. 

#6 Accurate Information Processing

There is so much data floating around in a B2B company that if it is not identified and segmented properly, there will be chaos. For example, making sure that the information of the customer is correct itself can be a huge job. Validating the products ordered, matching it to the specific customer, ensuring that there are no botched up orders can be a daunting task. AI makes all of this simple by validating the information in seconds. All of the paperwork is completed before you can even flinch. Its predictive abilities ensures that it always finds the fastest route possible to make the product reach the customer as fast as possible. 

#7 Intelligent Warehousing

Online grocer Ocado’s Andover (England) warehouse is entirely run by robots. It fulfills more than 65,000 orders (or about 3.5 million grocery items) every week. The robots, using AI, moves, lifts and segregates the items which are then packed by the employees. It ensures that the entire space is utilized by stacking boxes high by keeping up to 17 of them on top of each other. 

The AI is so smart that items which are rarely ordered are kept at the bottom while the ones that are frequently ordered can be seen on the top. This makes it easy to get the products that are ordered off the shelf saving a lot of precious time in completing orders. Amazon’s Kiva Robots has the ability to pick up goods and distribute them to different warehouses in a matter of five minutes and needs only 5 minutes every day to charge itself. 

In the near future, AI’s automation abilities is going to be integrated into all warehouses working along with employees to create a faster environment. 

#8 Using IoT to track movement

Anybody who knows what Internet of Things or IoT is would be easily able to imagine a few ideas on how it can be used in the logistics industry. Here are some of the ways in which  AI with IoT can completely revolutionize the industry. 

  • Helps you manage your fleet in a better way.
  • Senses your environment better.
  • Locates the truck easily.
  • Better supply-demand balance.

IoT is basically a network of devices that can share data among themselves. It can track all sorts of data wherever it has sensors enabled. Not sure about tire pressure? Sure, IoT can tell you if you need to fill in air for the tires. That’s how revolutionary it is for the logistics industry by streamlining the supply chain management and keeping human interaction as minimal as possible. 


AI will help companies that are in the Supply Chain and Transportation sector to work faster, better and more efficiently. The future of the logistics industry with AI looks extremely promising and might end up in blessing us with unusual solutions that will become the order of the day soon. Not only does AI augment human capabilities, but it also completely eliminates routine tasks thus helping employees deal with core activities. 

If businesses start using AI for its core business processes, you can soon expect it to grow rapidly while allowing employees to work on projects that directly affect the bottom line and not just paper-pushing. AI could very well be the differentiator between companies that achieve phenomenal success and ones that gather dust in oblivion. If you are into the logistics and supply chain industry, make sure that you have your ears to the ground when it comes to AI’s applications in your business.