Artificial intelligence (AI) is revolutionizing every industry and shipping and logistics is no exception. Amazon says that fully-automated warehouses are at least a decade away; humans are still better pickers and packers than even the best AI-powered robots.
Nevertheless, AI is already being rolled out in warehouse management to help meet customer demand. It is frequently what makes the difference between swimming and sinking.
AI Predicts Better Than Humans Can
AI is much better at predicting outcomes, including consumer behavior, than even the most skilled humans. For logistics organizations, it can accurately predict both the future of customer demand and supplier capacity. This allows your warehouses and fleets to better anticipate future needs. Anticipating future needs allows you to better meet customer demand.
In short, you have more lead time. AI is quickly becoming an indispensable tool of warehouse management.
Meeting customer demand is crucial. When you don’t have enough inventory, retailers lose sales and in extreme cases might even lose customers. The Internet makes it easier than ever for customers to take their business elsewhere. Consumer behavior is often a direct response to a failure of logistics organizations to meet their needs.
Without AI You’re Just Guessing
Anything short of AI is effectively just a form of highly subjective, educated guesswork. AI can allow you to see an uptick or downturn in daily traffic time up to a week in advance. This can be particularly helpful for those in air freight, which amounts to fully 35 percent of all freight value despite being only 1 percent of tonnage.
AI has proven value to logistics organizations: Early adopters of the technology, on average, have profit margins of 5 percent. The average logistics organization that hasn’t incorporated AI technology into its operations is losing money.
The problem for companies who don’t adopt AI isn’t a lack of data. Quite the opposite, it’s that they have more data than they know what to do with. What’s more, the kind of data that they need is granular.
In short, AI solutions help you to see the forest for the trees.
Even Early Adopters Aren’t Fully Leveraging AI
Amongst those adopting AI, the majority aren’t fully leveraging the techniology. A McKinsey survey reported on in Business Insider found that only 21 percent of businesses had moved beyond initial testing and into full deployment.
As with any tool, AI is only going to provide value when it’s used properly.
Beyond simply helping logistics companies to meet needs from a practical perspective, AI also has an uncanny ability to show customers what they want. It is capable of suggesting an additional product or even a slight modification of what they already planned to buy—in many cases one they didn’t know existed.
The question posed to 21st Century logistics organizations isn’t if they will adopt AI; It is when, and to what degree. The data shows that customers are increasingly opting for organizations who use AI to meet their needs.
Taylored Services can help you to thrive in this new landscape.
Author, James Pell is a freelance writer specializing in logistics, cybersecurity and fintech.