The logistics industry has seen a tremendous shift over the years due to technological advancements and in recent times, Artificial Intelligence (AI) is leading the league. With the help of computer science and comprehensive datasets, problem-solving in the logistics and supply chain industry is increasingly becoming a new norm. In succinct, AI is transforming the logistics industry, providing an efficient and effective way of conducting businesses across various verticals.
According to a report put forth by McKinseyAI could possibly generate $1.3 trillion to $2 trillion of value in the global logistics industry by 2025. This value is driven by AI’s ability to optimize supply chain operations, improve last-mile deliveries, and enhance customer experience.
Source: https://www.mckinsey.com/~/media/mckinsey/business%20functions/mckinsey%20digital/our%20insights/the%20top%20trends%20in%20tech%202022/mckinsey-tech-trends-outlook-2022- full-report.pdf
AI is Transforming the Logistics Industry – Real-life Examples and Statistics
Here are a few real-life examples and statistics that highlight the benefits of AI in the logistics industry:
- AI-Powered Route Optimization: DHL, a leading international logistics company has incorporated AI-powered route optimization to efficiently maneuver the delivery routes and simultaneously lower the fuel consumption. Eventually this resulted in a 15% reduction in delivery time along with a 10% reduction in fuel consumption.
- Predictive Maintenance: Maersk, a global shipping company, has incorporated AI technology for systematic maintenance of its vessels as well as pre-empt the requirements of the maintenance. Successful AI implementation has resulted in a 20% reduction in maintenance costs with a 10% increase in vessel reliability.
- Chatbots and Virtual Assistants: FedEx, a global courier delivery services company is increasingly using the power of Chatbots and virtual assistants to provide instant responses to customers’ queries and concerns. This has led to significant improvement in the rate of customer satisfaction and as a result the customer support costs have plummeted.
AI in Logistics: Excerpts from the Industry Honchos
Mr. Arshdeep Singh Mundi, Managing Director, Jujhar Logistics, by citing example of a recent Accenture survey, said, “36% of large, mid-sized, and small businesses had successfully integrated AI into their supply chain and logistics processes.”
Mr. Huafreed Nasarwanji, Chief Commercial Officer, Gati KWE is of the opinion that digitized supply chain networks are leading the way to transformation and adding precision to supply chain operations. Furthermore, the deployment of Blockchain Technology, Internet of Things steered by Artificial Intelligence shall eliminate the scope of errors and add agility in the decision making.
In addition, logistic companies such as Rivigo and Raaho etc. and online service providers like LogisticMart, IndiaMart etc. have notably recognized the role of AI in lowering the transit time as well as improving the overall delivery efficiency.
Mr. Mukesh Singh, the founder of LogisticMart is of the opinion that integrating Artificial Intelligence in logistics will be a game-changer in the future. He further expressed “AI has immense potential to revolutionize the logistics services like Packers and Movers, Warehousing, Vehicle shifting, and Cargo. It can help in optimizing operations, reducing costs, and enhancing customer experience. Furthermore, with the AI integration, the customers Will have trust on the logistic companies.
Growing Importance of AI in the Logistics Sector
- Optimized Route PlanningAI will optimize transportation management by analyzing data such as traffic patterns, weather conditions, and road closures to plan the most efficient routes. Additionally, AI-powered transportation management systems can provide real-time visibility into shipment status, allowing logistics companies to respond quickly to unexpected delays or changes. According to a report by McKinsey & CompanyOptimizing transportation management with AI can reduce transportation costs by up to 10%.
- Identify Issues InstantlyAI can provide real-time visibility into supply chain operations, allowing logistics companies to identify bottlenecks and potential issues before they become problems. This helps logistics companies to optimize operations, reduce costs, and improve customer satisfaction.
- Improved Customer Experience: AI-powered Chatbots and virtual assistants can provide customers with round-the-clock support, answering their queries and resolving issues in real-time. This helps in improving customer satisfaction and loyalty.
By using AI, you can also minimize small errors that humans are prone to making. For example, you won’t have to worry about spelling errors in any customer service responses sent out. You also won’t have to worry about employees forgetting to reply to customers as the whole process will be automated.
AI gains the trust of customers by providing them with loyal and personalized service. AI helps the customers according to their purchase experience. The global AI market in logistics is expected to reach $10.1 billion by 2025, growing at a CAGR of 45.3% from 2020 to 2025, according to a report by Grand View Research,
This clearly highlights the growing importance of AI in the logistics industry and its potential to revolutionize the way logistics operations are carried out. Therefore, the integration of AI in the logistics industry is providing significant benefits and advantages, and logistics companies that embrace AI can expect to see improved operational efficiency, reduced costs, and increased customer satisfaction.
In the end, integration of AI and Machine learning are driving cutting edge mechanisms in the world of logistics and improvising on the decision making, customer satisfaction besides redefining the growth and productivity. With the help of AI tools, logistics and supply chain industry is evolving and diversifying at lightning speed, leading the way to efficient and safe transportation.
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