How AI Transforms the Logistics Industry and E-commerce

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AI for e-commerce and Magento store
Posted in: Magento Trends

Artificial intelligence is a transformative force in a variety of industries. Its power lies in its ability to extend human capabilities with the efficiency, quality, and consistency of a machine. Products utilizing AI are widespread in unexpected areas, from consumer electronics and manufacturing processes to in-person retail.

Logistics is one area ripe for assistance from artificial intelligence. AI can eliminate entire classes of routine, mundane, inefficient human work. Additionally, AI improves the customer experience while simultaneously decreasing costs. Whether AI is decreasing costs or actively creating new business value, it has huge potential and real-world consequences for logistics businesses.

E-commerce takes advantage of artificial intelligence in so many other ways already, so why not automate and improve logistics as well?

AI Amplifies Human Performance

While some experts have feared that artificial intelligence will replace human jobs, especially those of low-skilled workers, there’s a flip side: AI makes human work more impactful and useful. By giving employees the tools they need to work faster and smarter, AI frees humans of mundane tasks and allows them to work on higher-impact projects instead.

One example specific to the logistics industry is predictive demand and capacity forecasting. Low-volume, high-value transportation methods, like air freight, need to prepare for sudden increases and decreases in demand as a result of changes in customer behavior. Instead of leaving humans to manually plan resource utilization to handle demand, AI can make more accurate and dependable forecasts at a fraction of the cost.

Social media trends and newly popular items frequently overwhelm shipping companies. By intelligently scanning social media and determining which products might become popular soon, logistics AI can help companies prepare for the inevitable rush of orders to deliver on time.

Sorting is another example of an area that was previously dominated by manual labor. AI-powered robotics can combine computer vision and intelligent software to quickly and accurately sort parcels, letters, and even pallets of goods. Humans are freed to oversee and strategize instead of doing mundane tasks. With the power of AI, humans are given more important and impactful jobs, leaving machines to take care of mundane and repetitive tasks.

AI Creates New Possibilities

Before artificial intelligence, logistics companies primarily planned ground delivery routes based on trial and error, in addition to known rules about efficient delivery routes. Drivers might come up with their delivery routes on the fly, utilizing their extensive knowledge of the city or area. Although this can work well, it is inefficient, unable to work well with specific time slots, and relies too much on the driver’s skill and knowledge.

AI can analyze traffic data and intelligently build last-mile delivery and pickup routes that meet specific time slots while taking advantage of optimizations that may be unintuitive for human drivers. Intelligent Traffic Management systems, much like AI in logistics, can optimize routes and schedules, leading to more efficient deliveries and improved customer satisfaction. Gone are the days of inefficient, hand-made delivery routes that rely on intuition; AI brings efficiency and predictability to this space.

Autonomous guided vehicles, or AGVs, are a type of self-driving vehicle. Instead of picking up and dropping off users on public roads, AGVs can help move goods between areas in a warehouse with much less human involvement. Forklifts and pallet jacks take a lot of human time and labor to move a relatively limited quantity of goods. By comparison, AGVs can save human resources and move more goods faster.

In a similar vein, semi-automated truck caravans (also known as truck platooning) allow logistics companies to move tons of goods more efficiently than they would otherwise be able to. Each truck communicates with the others using a machine-to-machine interface. With a driver in the lead truck and backup drivers in the following trucks, each truck’s speed and controls are synchronized with the lead, taking effort off of the following drivers and decreasing the potential for errors.

Truck platooning is the evolution of intelligent cruise control: although human drivers are still present, the bulk of freeway driving operations are automated. This makes trucking faster and decreases the chances of an accident or some other human-created error.

AI Improves Customer Experience

Throughout every industry in which AI is used, customer-focused personalization has made a big difference. Logistics companies interact with customers through a variety of means; package tracking and status updates are one of the most significant.

Voice-controlled smart speakers and other modern computerized assistants are other popular areas for AI-powered innovation. End customers can ask their smart speakers to locate packages, coordinate delivery times, and more common tasks.

Similarly, chatbots utilizing artificial intelligence can resolve many common customer support issues without requiring human interaction. This gives customers faster response times and more useful support while also decreasing costs for the logistics company.

Get Started with AI

Given the hugely transformative possibilities of artificial intelligence in the logistics industry, it’s no wonder that AI is already making inroads in some of the industry’s largest companies, like DHL and UPS. However, there’s no need to be a megacorporation to take advantage of artificial intelligence.

Getting started with AI is just like building any other new business capability:

  • Identify the business unit with existing expertise—maybe a data analytics team.
  • If you’re missing internal talent with the right skillset, look externally. E-commerce developers, like a Magento development company, can help your business integrate modern technology into your processes from beginning to end.
  • Choose a project that drives direct business value. The project should not utilize AI for the sake of using AI; it should drive immediate and genuinely useful business value.
  • Determine if the purpose of the project is to decrease costs or create new value for the company.
  • Based on the previous decision, determine the technology and business structure that makes the most sense for the project.
  • Get to work! Deliver powerful AI technology that saves money, creates value, or both.

Although AI was previously mired in excessive hype and false expectations, the legitimate uses for artificial intelligence are here. AI in logistics has already proven itself with large companies; now, it’s full of potential in new and upcoming areas. To harness this potential, custom logistics software development services provide businesses with the opportunity to create solutions that are perfectly aligned with their unique operational needs and goals, leveraging AI for optimal efficiency and innovation.

Proactivity, automation, and personalization are all areas in which artificial intelligence excels.

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