The integration of artificial intelligence (AI) in logistics and warehousing operations has emerged as a game changer. The value of the logistics market globally in 2022 was $7.98 trillion and that of India alone was $274 billion in the same year. The global market is expected to grow to $18.23 trillion by 2030.
Efficiency and resource optimisation are critical to maintaining competitiveness and sustainability. Enterprises are constantly searching for ways to enhance their operations and minimise wastage. AI has emerged as a revolutionary tool for predictive analysis, offering businesses the ability to identify potential areas of wastage and inefficiencies before they escalate.
Rushil Mohan, Co-founder and Chief Product Officer of Pidge, a last-mile logistics management technology and platform, says, “AI falls into two categories: supervised AI and machine learning. The former has recently become very popular because of Large Language Models and generative tools, but the latter is the cornerstone to ‘starting from scratch.’
Mohan adds that in Pidge’s software, for example, machine learning models and data normalisation algorithms help drive efficiencies from day zero in functions such as route management and best-cost allocation to available vehicles and executives. “The easy-to-use products allow businesses to instantly become digital, even if they never were before. As product usage increases and data streams form, our predictive models help create proactive and pre-emptive alerts for live operations, thereby ensuring that inefficiencies and wastage do not creep in real-time on-ground. AI-powered predictions will be the foundation for being able to achieve ongoing efficiency, at all levels of scale,” he says.
Rushil Mohan, Co-Founder and Chief Product Officer, Pidge.
An article on using AI for waste management in smart cities states that by integrating artificial intelligence into the management of waste logistics, it’s possible to achieve a reduction in transportation distance by as high as 36.8%. This leads to potential cost reductions of up to 13.35% and time savings of about 28.22%. Additionally, AI facilitates precise detection and categorisation of waste, with accuracy levels spanning from 72.8% to 99.95%.
Prafful Poddar, Chief Product Officer at e-commerce logistics services provider, Shiprocket, says that AI’s advanced data analysis is revolutionising inventory management for e-commerce platforms. Through meticulous data scrutiny, AI accurately predicts demand, enabling businesses to optimise stock levels and reduce storage costs. Real-time analytics track product movement, prioritising fast-sellers for restocking. AI’s predictive capabilities identify slow-moving items, freeing up capital from stagnant stock. Dynamic pricing strategies driven by AI expedite inventory turnover and decrease holding expenses by determining the right times for discounts and bundle offers, benefiting both merchants and businesses.
As global awareness of environmental and social issues grows, businesses are under increasing pressure to ensure that their supply chains align with sustainability standards and certifications. However, manually assessing and monitoring supplier adherence to these standards can be complex and time-consuming. This is where AI steps in, revolutionising supply chain management by providing efficient and accurate methods to evaluate suppliers’ sustainability practices and certifications.
Poddar says, “AI’s data prowess can reshape supplier sustainability assessment. It swiftly processes diverse data sources — supplier records, audits, certifications — forming comprehensive sustainability profiles. Real-time analysis empowers proactive decisions and issue resolution. AI excels in pattern recognition, spotting deviations and averting supply chain sustainability risks. It predicts future compliance, aids decision-making, and streamlines reporting. AI fosters supplier improvement, while mitigating bias for equitable assessments.”
How AI alerts companies to potential thefts and frauds
It is predicted that there will be a growth of 285% in cost savings, i.e., $10.4 billion globally in 2027 from $2.7 billion in 2022.
The efficiency improvements brought about by AI in delivery operations contribute to overall industry advancement. Reduced transportation costs, minimised delays and effective risk management through AI translate to a more resilient and competitive logistics ecosystem. But how do companies ensure successful deliveries using AI?
Poddar says, “It is now evident that AI-driven solutions are pivotal for enhancing delivery efficiency across diverse locations, a critical aspect of modern e-commerce enablement. Leveraging AI’s capabilities, we delve into historical delivery data, employing sophisticated algorithms to discern optimal delivery windows based on specific contexts. This strategic approach minimises delivery attempts and maximises successful outcomes. By providing such AI-powered insights, we empower MSMEs to orchestrate timely and effective deliveries, nurturing customer satisfaction and loyalty. The convergence of technology and logistics, driven by AI, facilitates the growth of e-commerce by ensuring seamless experiences for both sellers and customers.”
iStockAI in supply chain can play a very important role in everything from logistics to warehousing.
AI’s role in ensuring successful deliveries while alerting companies to theft or fraud is crucial for maintaining customer satisfaction, financial stability, reputation, legal compliance and industry progress. It addresses multifaceted challenges and reinforces the integrity of delivery operations.
Mohan says that Pidge utilises AI-driven anomaly detection by training supervised models on user, ecosystem and public data. It extends this capability to businesses via mobile phones or sim cards. The system’s continuous learning identifies intricate anomalies, aiding in theft and fraud prevention. Integration into critical workflows like cash handling and geofencing minimises occurrences, and post-processing analytics identifies even remote outliers, enhancing overall security measures.
What’s in store
AI is poised to reshape the landscape of logistics in remarkable ways. Advanced automation, including the integration of AI-powered robots and drones, will streamline warehouse operations and transform last-mile delivery. Autonomous vehicles driven by AI will revolutionise transportation, ensuring efficient and safe journeys. Hyper-personalised customer experiences will become the norm, offering real-time updates and tailored recommendations. The maturation of predictive analytics will empower logistics providers with more accurate insights, while the fusion of AI and blockchain technology will enhance transparency and security. Green logistics will gain further traction, with AI optimising routes and promoting eco-friendly practices. AI’s role in supply chain resilience, regulatory compliance, and continuous learning will solidify its position as a game changer in the industry. As AI and technology evolve, logistics will become more efficient, responsive, and sustainable, ushering in a new era of innovation and transformation.
According to Gartner, by 2026, the implementation of Conversational Artificial Intelligence (AI) in contact centres is projected to result in approximately $80 billion worth of savings in terms of agent labour expenses.
Mohan says, “Traditionally, AI models of any kind have required cleaned and steady streaming data to create relevant datasets. In packaging specifically, this has included weight-based sensors, Lidar-based scanners, and industrial-size dimensioning tools. The advent of more creative and environmentally friendly solutions directly aids sustainability, but equally renders many of the old technologies redundant or inaccurate. Two factors are driving better sustainable packaging. Firstly, the affordability and form factor of IoT devices has allowed us to capture data that was previously inaccessible, and second, newer technologies that allow for data input with handheld and camera-based devices are exponentially increasing and improving data sources.”
Research by McKinsey projects that by incorporating AI into their operations, logistics firms have the potential to create an economic value ranging from $1.3 trillion to $2 trillion per year over 20 years.
