The logistics industry has been undergoing a big change over the past few years. This change, driven by industry disruptions and the rise of advanced technologies, is enhancing the logistics industry. Among these, AI has emerged as a major force, revolutionizing the way companies manage and optimize their logistics and supply chains. AI processes vast amounts of data, makes intelligent decisions and predicts outcomes efficiently. These features make it an important tool in the logistics sector. It comes as no surprise that AI will be the most implemented technology in 2025.
Although AI has many applications and advantages in logistics, many companies still fail to truly leverage the potential of AI in their organizations as they miss the most vital part of their digital transformation: a change in mindset and behavior.
True Artificial Intelligence (AI): Implement warehouse automation and robotics
The combination of AI and robotics has led to significant advancements in warehouse automation. AI-powered robots efficiently sort, pick, pack and organize inventory, speeding up the order fulfillment process. The intelligence is truly “artificial” where warehouse workers are replaced by robots for many of the tasks performed. Additionally, AI-driven sensors and cameras enable real-time tracking and monitoring of inventory, allowing for better inventory management and reduced losses. This generates a wealth of new, real-time data in the warehouse that teams can use for predictive analytics and to enhance control over warehouse processes. As a result, warehouse automation powered by AI has transformed traditional warehouses into efficient, high-tech distribution centers that can keep up with the speed of fulfillment needed in today’s consumer environment and help improve the customer experience.
The automation of warehouses is especially important at a time when there is a shortage of warehouse workers, the threat of union strikes, as well as an ever-increasing cost of human labour. “Many companies, scrambling to find workers amid the lowest U.S. unemployment rate since 1969, see automation as a quick fix.” And so the need to apply this AI in combination with robotics is no longer an opportunity but rather a necessity. In 2024, just under half of medium to large operators of warehouses and fulfillment centers in the U.S. will use robots.
Transportation still remains a human-centric job
In transportation, the story is a little different. Humans remain at the center of the transportation process. Many people still wonder if AI and specifically ChatGPT, could actually take over their jobs? When asking ChatGPT about the role of AI and ChatGPT in Transportation, it replied: “It is important to note that while ChatGPT can provide valuable assistance and support in the freight industry, human expertise and oversight remain crucial.”
AI is generally also as “Augmented” Intelligence when it comes to transportation as AI helps the human be more efficient, handle more volume, do their job faster and have better quality outcomes. And at the end of the day, the person will like their job better, which helps companies with talent attraction and retention that are vital. So companies should apply AI to assist transportation personnel in their daily operations.
Visibility in the supply chain is the key to applying AI
Visibility in the supply chain helps with risk management and promotes effective communication and collaboration among stakeholders. This remains a vital area for companies to invest in. Logistics operations are susceptible to various risks, such as natural disasters, labour shortages, geopolitical issues and unforeseen disruptions. AI’s predictive capabilities empower companies to anticipate potential risks and devise contingency plans proactively.
The share data being collected on these platforms makes it a prime candidate to use AI. AI is being used to improve data quality, generate data through Generative AI when real data is not available and provide valuable insights through predictions (like an ETA or dwell times) or forecasts (available capacity of assets or at ports). By implementing real-time visibility, companies can share information, updates and forecasts with suppliers, customers and partners. Transparent communication helps build trust, enhances collaboration, and enables timely decision-making. Such collaborative efforts enhance the resilience and agility of the supply chain.
Improved logistics efficiency through predictive AI analytics
AI makes one of its greatest contributions to logistics through its powerful application in predictive analytics, driven by explosive growth in data. By analyzing historical data and real-time information, AI-powered systems can predict demand patterns, inventory fluctuations and potential disruptions, which enables optimization of inventory levels, minimizes stockouts and streamlines supply chain operations. By accurately forecasting demand, businesses can ensure that the right products are at the right place and time. This leads to improved efficiency and customer satisfaction. Predictive analytics continues to evolve into prescriptive analytics and will ultimately lead to the automation of larger parts of workflows.
Is the logistics sector ready to fully utilize AI?
Although technology has gone through significant advancements in recent years, it alone cannot fix the supply chain problems. Digital transformation requires three critical ingredients. These are – right digital talent, adjusted business models and processes, and the right mix of technology. Most companies still lack digital maturity, the right talent or the mindset to utilize the full benefit of AI. Companies need to change their behaviors from looking in the rear-view mirror to what has happened and start looking forward to using real-time and predictive insights. Only then will real change happen and digital transformation be achieved in the true sense.
