Guest Post: The Transformation of Logistics Through AI

Sep 14, 2022

(Image Source: All Things Supply Chain)

The aftermath of the pandemic has seen a major boost in e-commerce activities worldwide, due to the restrictions of the pandemic period. This boom in growth demands that the logistics industry copes with the rapid growth, especially with global trades now picking up again after the pandemic. This calls for smarter and innovative moves by the logistics industry to cater to the rising need for transportation services.

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Technology plays a huge role in the innovation required by the logistics industry, with various technological applications being employed. One technological application that has impacted greatly the activities of this industry is Artificial Intelligence (AI). AI has played a major role in technological advancement in various industries, including the logistics industry, maximizing efficiency in these industries.

Various AI devices such as autonomous vehicles, warehouse automation, smart roads, predictive analysis, etc. are employed to simplify tasks and make them more efficient and cost-effective. But before we dive into the impact of AI in the logistics industry, let us look at the meaning of artificial intelligence.

What Is Artificial Intelligence?

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(Image Source: Clickdocs)

This refers to a technology that allows machines to act, think, learn, and behave like humans. This technology includes different concepts and operates by allowing the software to automatically learn from patterns in massive volumes of combined data, with complex algorithms and fast repeated processing.

AI involves incorporating human qualities in a machine and leveraging the computing abilities to outperform humans. An example is product recommendations on e-commerce sites, using customer data from previous visits to the site to make product recommendations and suggestions.

Applications of AI in Logistics

AI has contributed greatly to the transformation and revolution of logistics and looks to have an even greater impact in the future. Hence the decision of big names like Google and Tesla to invest in the technology. Various factors have contributed to the employment of AI in the logistics space.

For example, the millions of invoices available to logistics firms annually from thousands of third-party vendors and suppliers can be a big burden on the accounts team. With easy access to various information such as billing amounts, dates, accounts information, addresses, etc., from a sea of multiple invoices received by the company, AI facilitates accounting operations.

Also, with a large fleet of vehicles and company facilities to manage worldwide, maintaining current and complete address information necessary for efficient shipment delivery can be daunting. However, this is facilitated by the application of AI. These and many other factors have necessitated the application of AI in the logistics space. The following are some ways through which AI has transformed the logistics industry.

Autonomous Vehicles

AI allows the automation of vehicles such as vans, trucks, and buses for the transportation of goods. These are referred to as autonomous vehicles and can operate without a human driver. This poses a breakthrough in logistics, as it reduces time and saves costs involved in logistics operations. In addition, it also helps reduce the number of accidents and is eco-friendly, as it reduces fuel usage.

However, this technology has not yet been fully accepted, as autonomous vehicles are not allowed on the road without a driver behind the wheel to analyze potential risks and help make some important decisions on the road. This is expected to change in the future though, with more work still being done to advance this technology.

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(Image Source: All Things Supply Chain)

Warehouse Automation

 One of the demands of logistics is speed and efficiency in its operations, which is why logistics companies are investing big in AI and the application of robotics in various logistics operations. AI helps to facilitate several warehouse and logistics operations through automation, making them quicker and more efficient.

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(Image Source: The European Business Review)

In addition, AI has improved various warehouse operations such as the collection and analysis of various data and inventory processes, helps in demand prediction, modification of orders, selecting the best warehouse for transporting inventory from multiple options available, and re-routing products in transit. Thus, making the company more efficient with improved services and reduced costs, ultimately boosting revenues.

Furthermore, AI employs computer vision technology used in warehouses for the recognition and organization of items and can also be employed in other fields such as quality control in the future, making human supervision unnecessary.

Enriched Data Quality

AI helps to enrich data quality available to logistics firms. It achieves this through Natural Language Processing (NLP) and Machine Learning (ML) which help to collect and organize huge amounts of data available to these firms daily. While NLP understands commonly repeated terms, phrases, sentences, or jargon, ML interprets these keywords, drawing connections between them to create context and further learning.

Also, better AI accuracy in logistics has enabled optimal data usage in shipping services, avoiding risks and creating more efficient solutions to logistics problems. With enriched data, AI can leverage the synergy between machine and man to help companies maximize available resources and workforce to get optimal results. Furthermore, enriched data help logistics companies gain more insight needed to make necessary adjustments to maintain optimal performance.

Improved Predictive Analysis

AI has greatly improved predictive analysis in today’s world. As opposed to the manual analysis carried out in the past, AI has helped logistics professionals to achieve optimization in various analytical operations such as capacity estimation, data analytics, and network analysis, enabling the optimal transportation of shipments from one point to another.

By compiling logistics data accurately, AI provides a solution through predictive analysis to help achieve optimized results. AI also helps to adapt to the time-sensitivity of the analytical processes and the high variance, especially in peak seasons or with company expansion, while also encouraging proactivity in logistics technology companies and helping better future demand estimation.

An example is the use of ML and NLP by big logistics companies such as FedEx to extract information from multiple online conversations to identify potential problems such as material shortages and access issues while also monitoring supplier status. All these are achieved with AI, helping logistics firms to achieve better forecasting and cut down costs, giving them a competitive edge in the transportation industry.

Smart Roads

This is a major application of AI in transportation services. Various logistics companies are working on building these technology-powered roads to improve logistics operations and make them faster by enhancing road safety and reducing delays due to harsh weather conditions. Smart roads can help prevent road accidents due to the slippery nature of the road during winter by using solar panels that produce electricity and heat the road.

In addition, smart roads are also equipped with LED lights that help warn drivers of changing road conditions and help them remain safe. Furthermore, fiber optic sensors on these roads help provide internet connection, enabling them to detect the traffic volume on the road, warn the driver of possible traffic jams or motor accidents up ahead, and even alert emergency services in case of emergencies.

All these ensure better road safety and faster transportation speeds, aiding companies that use this technological advancement in transporting their goods to stay ahead of the curve and giving them a better competitive edge against their competitors.

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(Image Source: The Green Optimistic)

Enhanced Back Office operations

AI also helps in providing enhanced back-office operations by improving the speed and accuracy of these operations. Using a technology known as cognitive automation, which combines AI with Robotics Process Automation (RPA), employees can now carry out their tasks with improved efficiency and better productivity.

Also, the automation of various back-office repetitive, data-related tasks helps companies save a lot of time and money in their supply chain operations. With this automation, employees in various job positions can be replaced, improving overall efficiency by reducing human-based errors.

Enhanced Customer Experience

AI is also employed in logistics to provide customers with a better and more enhanced experience with the brand. With AI, customer content on the brand’s website can now be personalized by collecting various information and data from previous visits. This can then be used to provide them with product recommendations and suggestions based on their preferences.

This personalization gives the customer an overall enhanced experience and better customer satisfaction. Thus, they would want to remain with your brand and become your loyal customers. This, in turn, improves business profitability by increasing revenue inflow into the company.

Efficient Planning and Resource Management

Effective planning and resource management are crucial for enhancing customer satisfaction, reducing costs, and fostering overall business growth. However, this can be challenging to achieve, especially with the pool of information available to plan. AI facilitates planning activities by understanding and organizing the information needed for planning, using them to plan various logistics and supply chain operations.

In addition, AI assists in resource management to reduce costs by optimizing available resources and the real-time movement of these resources along the supply chain, leading to financial self-sufficiency. For instance, AI-powered resource management can help reduce shipping costs such as shipping from China to UAE cost by optimizing available resources and ensuring cost-effectiveness.


In conclusion, impacting greatly on its activities, the future of AI in logistics is very promising. This technology has led to the improvement of this industry, giving businesses a competitive edge over their competitors and improving their overall efficiency and accuracy. With these, AI brings about the transformation of the logistics industry, making its operations more seamless, efficient, and cost-effective.

About the Author

Guest Post: The Transformation of Logistics Through AI - About the author

Danielle Gregory is a Writer and Marketing Expert who is Currently Working for QAFILA. Danielle's writing relates to a range of subjects such as logistics and IoT. Besides writing, she enjoys traveling, Cooking, and Riding.

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