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AI and Logistics: How Artificial intelligence Is Changing the Way the Logistics Industry Does Business

Logistics providers have always relied on research and analytics to gather and decipher mountains of data which they accumulate. However, these days, with data volumes growing almost exponentially, the old ways of doing business just aren’t good enough. That’s why the logistics industry is now turning to artificial intelligence: AI and Logistics.

When it comes to logistics, artificial intelligence means new computing techniques like natural language processing, machine learning, and deep learning. These new procedures not only help in streamlining processes but also help in automating them from beginning to end.

What this means is, computers are now learning how to parse data, provide analysis, and generate events based on their conclusions. In a broader sense, these new techniques mean a complete reconfiguration of the logistics chain, and how the logistics industry conducts business in 2018.

AI and the Global Logistics Network

More and more companies upgrading their logistics to digital services means more growth for the industry in 2018. It’s not that the industry wasn’t booming in prior years, as AI and Logistics virtually tripled in 2017, but huge growth is anticipated by 2020.

The 3 key areas that will be impacted the most are:

  1. Processing and Analyzing Big Data: It’s hard to believe, but after 20 years of the existence of the internet, there are still many logistics companies that do their work on spreadsheets. When it comes to Big Data, not only the old ways of doing business are outdated, but also are virtually impossible. Big Data analyzes large data sets, calculating patterns, trends, and associations. It is especially good at predicting human behavior; something a spreadsheet simply cannot do.
  2. Advising Intelligently: AI doesn’t just gather data; it deciphers it and advises on actionable intelligence. Built-in business intelligence (BI) can provide insight into customer preferences, at volume, that is just not humanly possible. Then there is Counseling intelligence (CI), which is much more broad-based and actionable across multiple units, systems, and departments.
  3. Taking proactive and intelligent action: When it comes to the newest and the most complex form of AI, action is what is required and not just can it analyse and advise. This means the ability to execute and provide recommendations based on analysis. This allows companies to address various risk factors and take corrective action at a rate unheard of until now.

AI and the Transformation of the Shipping and Logistics Industry

Of all the industries lagging in the advancement of logistics, the shipping industry leads the way. While major retailers like Amazon and Walmart are looking to embrace technical innovations in AI with their shipping partners, not all partners under the current circumstances have the required capabilities to do so.

For example, what we’re talking about are un-manned driving vehicles, drones and automated delivery systems that are expected to not only make the logistics industry more cost-effective but more profitable as well. A recent report from major shipping carrier DHL found 3 major trends moving forward:

  1. Self-Driving, Autonomous Vehicles
  2. AI and Machine Learning
  3. The Internet of Things

In short, carriers are positioned to provide faster and more cost-efficient transportation to better suit and augment business from such retailers. Datamation.com forecasts that more than 50 billion items will become accessible via the internet by the year 2020. This means there will be connected transportation vehicles, such as planes, ships, trucks, and trains, all with AI driven logistics systems in them.

AI and the Internet of Things

Innovations and the growing number of shared and connected internet devices, like smartphones, tablets and wearables, have increased the ability to connect physical objects at an almost exponential rate. Internet-connected devices are expected to grow from 15 billion in 2018 to over 50 billion by 2020. The Internet of Things (IoT) is truly changing the future of business.

Ericsson estimates that IoT gadgets like coffee makers, security cameras, and even refrigerators, will overtake mobile devices by volume of market share in 2018. Now is the time to start thinking about how to implement all these new gadgets.

Estimates, by the numbers:

  • IHS estimates there were 15.4 billion connected devices in 2015. It forecasts this number will increase to 30.7 billion by the year 2020 and will rise up to 75.4 billion by 2025.
  • Intel estimates are much higher; as many as 200 billion connected devices by 2025.
  • Sparklabs estimates B2B IoT devices like industrial sensors and workspace management applications will rise from 2.5 billion in 2017 to 5.4 billion in 2020.
  • Wearable devices like the Apple Watch are expected to grow from 28.3 million units sold in 2016 to over 82.5 million in 2020. That’s 31% growth in just 4 years.

SAP and IDC forecast a 15% increase in shipping productivity for the year of 2018. This means improved systems, reductions in costs, and increased profitability.

Forecasts for AI Supply Chain – 2018 and Beyond

While we may not be able to see all the changes in AI and Logistics chain this year, huge changes are underway nonetheless. Major companies like IBM and Maersk have already begun investing in cloud-based, open-source technologies including analytics, IoT, and AI.

Four key forecasts:

  1. The time for talk is over: They’ve been talking about AI for decades now, in technical journals and even in the movies. The reality is that new AI technologies are now being implemented every day, in all aspects of day to day life. Results are already coming in, showing increased productivity and profits. The future is NOW.
  2. Money is starting to pour in: Proven innovations in 2017 like self-driving cars and boats mean an increase in investment in 2018. More and more companies are investing real dollars in AI projects as new technologies continue to prove more productive and more profitable.
  3. Not over the hump yet: The sad reality is, while many AI projects have proven successful, there are just as many failures. This is expected in any industry. While AI is constantly learning how to deliver products faster and more efficiently, there are still many obstacles to overcome like political and economic factors, intangibles like the reaction of competitors and the ability to safely colocate data.
  4. The continued rise of voice-interacting machines: Forecasts show the continued rise of voice-activated machines like Alexa and Echo. Some estimates show as many as 20% of all companies will now look into implementing voice-interacting machines by the end of 2018.

Overall, 2018 will see a substantial rise in investment in the field of AI and Logistics and the Logistics Industry as a whole. While this may not be visible at the retail level to consumers, most estimates show artificial intelligence and logistics growing at a substantial rate by the year 2025. Stay tuned for more insights into this rapidly evolving area.

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