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How Is AI Used in Transportation and Logistics indsutry?

Artificial intelligence (AI) plays an integral role in helping transportation and logistics companies stay competitive.  

Historically, logistics organizations have been forced to work with a high volume of paperwork. Manual data entry and decision-making are prone to error, and technology has become increasingly complex. 

This is where artificial intelligence and automation come in. The right solution can help your organization extract structured data from your documentation, increase productivity and revenues, and help you optimize your supply chain. 

Designed to improve efficiency while replicating human thinking, AI-driven technologies are key to any business’s digital transformation. Transport and logistics are no exception. This article will offer an overview of artificial intelligence and its role in automation. 

What Does Artificial Intelligence Entail? 

AI consists of systems that can automate or mimic human thinking. These same systems leverage data to make more informed decisions than the average human could.  

A comprehensive, effective AI system can perceive information, analyze datasets, and produce solutions based on what it learns. 

The purpose of artificial intelligence is to increase efficiency and reduce the risk of error. To achieve this, AI systems need a high volume of data that they can input about a given process. For example, an AI system can process text, sound, image, or video the same way a human being could using the five senses. 

As AI technologies evolve, their error rates decrease. The voice assistants at Microsoft and Google, for instance, have an error rate of approximately 5%. As these technologies become more mature, they also become more advanced—increasing accuracy and efficiency as a result. 

Benefits of AI in Transport  

As AI becomes more complex and capable, transport companies are expressing greater interest in their utilizations. This is because AI can elevate transport service and improve global supply chains.  

It’s no wonder the market size of AI in the transport field is slated to grow to USD 10.3 billion by 2030 (up from USD 1.21 billion in 2017). The benefits of AI are extensive and rooted in efficiency. Implementing AI in transportation can help logistics accounting teams work faster, with a lower rate of error.  

Similarly, large-scale supply chains are often tasked with managing many different vehicle assets and premises. AI systems can navigate this by eliminating redundancies and keeping customer information up-to-date. 

Another key benefit of AI in transport is security. Some companies rely on machine learning technologies to identify anomalies in classified documentation and invoices, and verify compliance. These systems have a remarkably high rate of fraud detection.  

In rail transportation specifically, AI systems can help to build autonomous systems with self-driving trains. The trains involved will connect with other vehicles, exchange data, and communicate as needed with human supervisors.  

This brings us to yet another benefit of AI in the transport field: real-time equipment analysis and maintenance, resulting in increased safety. McKinsey, in fact, reports that this type of predictive maintenance will help companies save as much as USD 630 billion by 2025. 

Many industry players work with third-party vendors like Mely AI to ensure safe and effective transport and logistics processes. This is made possible by working with unstructured data—extracting essential information on locations, billings, dates, and other factors. 

 

Benefits of AI in Logistics  

Logistics companies like Amazon are founded in their high-level delivery and excellent service. 

To achieve a reputation like Amazon’s, organizations can incorporate AI into their supply chain. Back-office automation, for example, delegates repetitive tasks to robots—and eventually to an artificial intelligence system. This includes machine learning, which helps AI accumulate knowledge so that it can make decisions and interact with humans consistently over time. 

While robots are conceptually unique from AI, artificial intelligence is generally behind their operations. For example, robotic process automation (RPA) consists of rule-based systems that perform tasks like filling in web forms and distributing data—ultimately introducing that data to the AI system. 

Cost savings (and again, efficiency) are a massive benefit here. Amazon has already deployed 520,000 robotic drive units across its fulfillment centers. Meanwhile, experts at Accenture claim artificial intelligence will increase productivity by over 40% by 2035.  

The same report shows that 36% of organizations have successfully introduced AI for their logistics and supply chain processes. 28% of respondents have plans to increase their business value by leveraging artificial intelligence in the near future. 

AI Use Cases in Transport and Logistics  

We’ve discussed the benefits of using artificial intelligence in transport and logistics. But what are the key use cases of these technologies? 

  • Demand prediction 

AI can help predict demand forecasting and warehouse management. The artificial intelligence system can leverage past experience to understand the factors at play in shifting demand.  

  • Warehouse management 

Since AI can analyze massive datasets faster than any human, it can oversee an organization’s warehouse management more efficiently than human personnel. A lower rate of error is simply an added bonus.  

  • Yield optimization 

AI can help companies understand what inventory categories are performing well and which ones are falling short. By identifying the key contributors, companies can make meaningful changes. 

  • Route optimization 

AI can help organizations analyze their existing routes and make improvements down the road. These systems use satellite maps to make decisions about traffic (and achieve even lower shipping costs).  

  • Supply chain planning 

Faster delivery is the result of intelligent algorithms. Artificial intelligence and machine learning can help organizations navigate the evolving supply chain with ease.  

  • Workforce planning 

Recruitment, training, and performance management are key aspects of workforce planning. AI solutions can simplify these processes, allowing companies to oversee their workforce more efficiently. 

  • Predictive maintenance 

It stands to be repeated that AI systems can analyze data about your assets and warn you about potential equipment failure. This can help you save money and schedule repairs faster. 

  • Robots 

In addition to interacting with humans, AI systems can make decisions that mimic those a human would make. Robots and AI can help take on tasks once reserved for human personnel.  

From managing assets to optimizing routes, AI can help transport and logistics organizations realize their fullest potential via automation. With artificial intelligence in your back pocket, you can embrace digital transformation and improve your performance in the field. 

 

Embrace Transport and Logistics Automation with Mely.ai Solutions 

Transport and logistics teams can leverage AI to increase visibility into their data, make better decisions, reduce errors, and save both time and money. The benefits of introducing artificial intelligence into your business are truly expansive. 

The right software will help you transform your operations, allowing your teams to work with high volumes of data and operate more efficiently than ever. We’re confident you’ll never look back. 

Interested in getting started? Book your free demo with Mely.ai Solutions today.