Blending of AI and logistics represents new frontier for global business

Artificial intelligence & autonomous trucks

By Cate Hull
In this technology age, there are always new frontiers to claim. Perhaps one of the most critical in the coming years will be the blending of artificial intelligence (AI) and global logistics.

As the world’s trading landscape shifts with political winds, what remains is the need to move goods from Point A to Point B in the most efficient and cost-effective manner.

AI has been described as “the ability of a machine (or a combination of different machines) to make intelligent decisions (like what humans can do) based on the available dataset. Such machines can learn on their own to make more corrective decisions based on previous decisions and collected data. This process of self-learning by machines is also known as machine learning.”

According to a PricewaterhouseCoopers (PwC) report, the global economy can see a potential contribution of $15.7 trillion from AI by the year 2030.

But we are still on the cusp. According to the Gartner 2018 CIO survey, only four percent of surveyed companies have invested and deployed an AI-based solution. The rest of the companies are at various planning stages. So, if you don’t have an AI-based solution yet, don’t panic. It is, however, important to start looking at possible tools for your business.

Global logistics giant UPS is one of the trendsetters. UPS was established in Asia Pacific in 1988 with regional headquarters in Singapore. The company serves 41 countries and territories in Asia Pacific.

UPS’ use of AI and other advanced technologies is evident in three tech solutions:

• ORION – A proprietary tool UPS uses to manage its fleet system, ORION (On-road Integrated Optimization and Navigation) uses advanced algorithms to create optimal routes for delivery drivers from data supplied by customers, drivers and the vehicles and can alter the routes on the fly based on changing weather conditions or accidents. Ultimately, it will look at the deliveries that still need to be completed and continue to optimize the routes. The cost and time savings and emission reduction based on this optimization alone is extraordinary—UPS expects to reduce deliveries by 100 million miles.
• EDGE – What ORION is doing for delivery routes, Enhanced Dynamic Global Execution (EDGE) is doing for UPS internal operations. Technology that’s informed by real-time data helps employees make decisions, reduce costs, optimize operations and make the UPS logistics network smarter.
• Network Planning Tools – The goal of Network Planning Tools (NPT) is to optimize the flow of packages in the UPS network from loading docks to sorting to the destination. Fueled by real-time data, artificial intelligence and analytics, NPT helps UPS employees make decisions and improve efficiencies. NPT is expected to be fully deployed by 2020, and the company hopes to realize $100-200 million in savings and cost avoidance with the intel this system will provide.

And then there’s autonomous deliveries and drones.

UPS execs insist that the UPS driver is a core element to its success and the face of the company, but they have tested the use of drone deliveries for some applications including dropping essential supplies in Rwanda and demonstrating how medicine could be delivered to islands. In rural areas, where drones have open air to execute deliveries and the distance between stops makes it challenging for the drivers to be efficient, drones launched from the roofs of UPS trucks offer a solid solution to cut costs and improve service. Drones could also be deployed in UPS sorting facilities and warehouses to get items on high shelves or in remote areas.

Driving this push for more efficient logistics is the explosion of the e-commerce marketplace.

E-commerce companies are focusing on artificial intelligence (AI) and virtual reality with a view to cut logistics costs and identify fraudulent orders, according to PwC.

“E-commerce players are revamping their technology strategies to maintain their competitive edge. Most e-commerce platforms are upping their investments in areas such as conversational commerce, artificial intelligence (AI), virtual reality (VR)/augmented reality (AR) and analytics technologies,” the report stated.

Our firm’s FreightDesk platform is another example of technology being used to automate the movement of goods. With FreightDesk, you can connect orders, inventory, warehouses and carriers to move freight seamlessly. With so many moving parts, connectivity is the key. We are like Uber for logistics but coordinating supply chain management is much more complicated than finding a lift for a single passenger.

Cate Hull is the CEO of FreightExchange, a Sydney-based logistics and freight management company.