AI in logistics: five short use cases

From Ocado to Rolls Royce, the world of logistics is changing at an incredible speed

by Sergey Lypchenko 19 August 2019

Artificial intelligence is changing the world, by making it possible to automate countless industries. Nowhere is this impact felt as strongly as in the logistics industry, where AI applications are quickly becoming the standard, rather than the exception.

According to McKinsey, logistics companies stand to gain from $1.3 trillion to $2 trillion per year in economic value due to AI integration into manufacturing processes and supply chains.

This article describes five ways AI is being deployed in the logistics sector, identifying the companies that are already using it for their benefit.

Automated warehousing

Warehouse operations are becoming automated – everything from data collection to inventory management can be done by machines. AI is used to predict product demand, so deliveries can be arranged in exact quantities, and transportation expenses and other costs can be reduced.

Online British supermarket Ocado has created an AI-assisted robot which fulfils about 65,000 orders in a week. The robot is moving, lifting, and sorting out grocery items across its warehouses. Human workers just package the selected products, and time for order fulfilment is reduced substantially.

Self-driving vehicles

The transportation sector is being transformed by AI. Self-driving vehicles can be used to deliver products from point A to point B, improving supply chains and reducing expenses.

Human drivers can be present in the cab to control the process – indeed, some countries are even enacting laws concerning the mandatory presence of a driver in a cab.

At the end of 2018, Google spin-out Waymo became the first company to launch a commercial self-driving taxi service. The service was launched in Phoenix, Arizona, and was extended to California earlier this year. The company plans to build autonomous trucks, hoping to make them safer and cheaper than human-driven counterparts. 

Meanwhile, the famous luxury car manufacturer Rolls-Royce is working on building self-driving ships. It has launched Intelligence Awareness system for vessels in 2018 that can identify various objects in the water, select an optimal route, and monitor the condition of the engine. It will help shipping companies increase their delivery speed. According to Markets & Markets, the market for autonomous vessels is expected to reach $13.8 billion by 2030.

Smart roads

Apart from driverless technology, cars can be equipped with other smart tools. Some companies have started specializing in the development of smart roads – equipped with solar-powered LED lights. These not only serve as lights at night, but also alert drivers about changes in road conditions. They can even heat the road to avoid dangerous conditions in winter. Therefore, vehicles can avoid delays because of the weather.

Integrated Roadways has launched a Smart Pavement System, and now testing it in the state of Colorado. The system connects vehicles to the Internet, with drivers receiving notification about things like traffic jams, accidents, and so on, helping them choose an optimal route.

AI in back office operations

Back office operations are not less important in logistics than transport. Artificial intelligence and robotic process automation (RPA) can help human employees improve the quality of their work. Robots assistants may replace some humans in performing monotonous tasks, leading to reduced expenses and improved accuracy. 

RPA vendor UiPath claims its software robots can often take over99 percent of back office operations due to their advanced intelligence system. Its robots may read contracts and identify clauses that are controversial and or may lead to large losses. When used by lawyers, for example, it helps avoid mistakes that could have cost thousands of dollars. According to LawGeex study, the accuracy level of AI-based contract review is 94 percent whereas the accuracy of human lawyers is about 85 percent.

Customer experience

AI can help businesses improve customer experience and attract new customers. For example, DHL cooperates with Amazon – if you use Alexa, you can ask it about your parcel and Alexa will provide you with all the details regarding its location, delivery time, and so on.

As the abovementioned examples illustrate, the use of AI in logistics can take service quality to a new level. If you need to improve your logistics operations, consider some of the new and innovative options – just don’t forget to test how customer experience is changing when you apply AI.

Sergey Lypchenko is a technical writer at Cleveroad, a web and mobile app development company located in Eastern Europe. His mission is to find interesting stories about innovations in the world of IT.