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The global logistics market size is predicted to reach $12,256 billion by 2022. One of the main drivers of growth in this industry has been the implementation of innovative technologies.

AI is one of them, and its capacity to revolutionize different segments of logistics leads to improved efficiency and performance. 

Due to the fact that logistics requirements are becoming increasingly complex and challenging, AI and related technologies can be game-changers that will transform this sector and potentially add $1.3 trillion in value to the supply chain within the next 20 years. 

Here are some of the most striking advantages of using AI in logistics. 

Autonomous Vehicles 

Self-driving trucks generate buzz, and with good reason. 

Their purpose is to save time and money, as well as reduce the number of traffic accidents. 

Different models of autonomous vehicles are under development at the moment, and although they still require a human at the wheel in order to control it, it won’t be long before the first self-driving vehicles, capable of monitoring and predicting the changes in their environment, picking the best and fastest route, reading signs, and avoiding obstacles, start delivering goods and transporting people. 

However, we’re not only talking about cars and trucks since drones and other autonomous unmanned aerial vehicles can generate economic growth of up to $82 billion. They can be used to track inventory anonymously with the help of RFID, QR-code technology, and IoT. They can lift and move small items and eliminate the need for forklifts and conveyor belt systems that are currently used for moving boxes around distribution centers. 

Conversational Chatbots 

According to IBM, chatbots can help companies slash their customer support costs by 30%. 

These algorithms can work around the clock and handle a number of customers simultaneously, so they also contribute to boosting the efficiency of this department, crucial for customer experience. 

There are different ways logistics companies can use chatbots to automate their customer service and reduce costs, and some of them include:

  • Facilitating website navigation. When your customers land on your website, they can find what they’re looking for more quickly and easily with the help of a conversational AI chatbot. 
  • Receiving delivery requests. Logistics chatbots can receive and process orders and streamline this process.
  • Canceling or amending orders. Instead of waiting for an available customer support rep, customers can provide their order tracking number, and the bot will cancel or amend their order. 
  • Tracking shipments. Back in the day, customers had to use an online form in order to track their shipments, but now they can access this information via an AI-powered chatbot. 
  • Collecting and analyzing data. With the help of chatbots, you can obtain valuable customer insights with which you’ll be able to understand your customers better and prevent potential issues in the future. 

As customer experience plays an important role when it comes to logistics and supply chain management, businesses operating in this industry should implement chatbots to level up their efforts. 

Smart Roads 

Logistics and supply chains heavily rely on road conditions, which makes smart road technology a huge disruptor. 

An example of this technology is a smart highway in Sandpoint, Idaho, which consists of durable solar panels made from transparent tempered glass tiles. During the day, solar cells absorb the energy from the sunlight and turn it into electricity used for powering nearby buildings and public infrastructure. 

At the same time, built-in LED lights mark the traffic lanes and inform drivers about the traffic volume ahead,  or warn them about potential hazards. This smart AI-powered highway knows when an accident happens and alerts authorities and other motorists about it. This way, a greater level of safety is achieved. 

Finally, given that these solar panels are heated, ice won’t be formed on the highway in winter. 

All this is important for safe and timely deliveries and a streamlined supply chain. 

AI will be even more important for the logistics sector in the future as it has the potential to handle a global supply chain that would otherwise become too complex and hard to manage in a traditional way.  

Route Optimization

Route optimization is a leading factor for many 3PL truckers these days. 

This technology minimizes the amount of money spent on wasted time. 

As deadlines shorten and customer delivery expectations have changed, routes become even more important. 

Powered by AI, this technology allows for faster delivery times and looks at past data to determine the best routes taking into account weather, time of day, and time of year. It also evaluates new routes that have been created or ones that have been closed.

For example, UPS leverages ORION, an AI-powered GPS tool for creating the best and most efficient routes for its fleet. 

Drivers, vehicles, and customers provide relevant traffic data which is then analyzed by the ORION’s algorithm in order to create the most efficient and optimal route for deliveries and pickups. This includes finding the most efficient and logical sequence of addresses, thus reducing miles driven and improving the flee’s performance.  

As of recently, this technology has been upgraded with Dynamic Optimization, a feature that updates directions in real time, based on live traffic reports, weather, and drivers’ changing commitments throughout the day. 

Not only does this mean that drivers will make their deliveries on time, but also in the most efficient manner, which in turn, results in reducing fuel consumption by 10 million gallons annually, saving $300-$400 million in the US only, and minimizing carbon emissions. 

Route optimization has the potential to revolutionize logistics as it has the hugest impact on a company’s bottom line.

 Warehouse Automation 

Warehouse automation refers to the practice of streamlining and automating the movement of goods and inventory into, within, and out of warehouses and helping it reach customers in the most effective and efficient manner. 

The point is in cutting costs through minimal human assistance and speeding up the process by implementing automation software and robots. In other words, companies can completely automate labor-intensive, repetitive tasks that require physical work, as well as error-prone and tedious manual data entry.

Back Office Automation

Another example is back-office automation instead of manually entering thousands of documents manually, companies can now take advantage of artificial intelligence tools. This technology has the ability to extract structured information from documents regardless of their format, classifying and labeling it in the process, extracting data from tables, and integrating it into ERP or TMS system. 

Deep Cognition’s PaperEntry AI solution, is compatible with various document types including commercial invoices, AP invoices, delivery orders, BOLs, and packing lists. This will accelerate your data entry, eliminate manual data entry, reduce cost by 90% or more, and minimize backlog. 

However, this doesn’t mean that AI will take over jobs – it will, actually, help people focus on high-value work instead of performing menial, repetitive tasks. 

By cutting down on operational costs and resources dedicated to back-office operations, it empowers companies to focus on meeting customer demand and being a profit-driven company. 

Jennifer Wilson is a writer at She knows business processes and operations management inside out. As she understands all the challenges of running a small business firsthand, it’s her mission to tackle the topics that are most relevant to entrepreneurs and offer viable solutions.

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