How AI Can Boost Logistics

The digital revolution and the widespread transition from analog to digital technologies, which began in the 80s and is still partially ongoing, have brought significant changes to the shipment industry. Today, digital technologies in logistics are an important and serious topic for many companies. If you plan international delivery, such as shipping to Japan, you must improve on all stages of the delivery process. And this is how you can do it using AI.

Current Situation

In a highly competitive market, efficient and flexible work allows any company to gain a leading position in its field. Therefore, companies are looking for tools to help to make smart decisions and optimize their processes for increased productivity, meet customer needs, and save money.

Now, new solutions, particularly AI, play a key role in solving ambitious tasks. According to the authoritative research company Gartner, in 2024, about 50% of logistics companies will invest in technologies that support AI.

Benefits of AI

Next, we will provide tangible examples of how companies from different countries already use or actively implement AI to optimize and modernize the handling of goods and storage.

Example #1: Facilitating the Inventory

The inventory process in a warehouse is a labor-intensive task. In addition to the need to acquire additional resources, warehouse personnel are also required to pay attention at all times and persevere in tough working conditions. The inventory process also requires specialized equipment, and work is often carried out at heights, which poses a risk to the safety of warehouse workers.

To solve the identified problems and minimize risks, L’Oréal, for example, has implemented Hardis Group’s Eyesee unmanned inventory system. A drone with an onboard camera flies past each position and tier of the warehouse racks to conduct an inventory. Thanks to video processing using AI, the drone can read barcodes, recognize empty spaces, take into account the height of layers, and determine where one cell ends and another begins. The benefits of this are:

• The process is faster;
• Low error rate;
• Reduction in operating costs (no need to involve additional human resources);
• Increases employee safety (no need for warehouse personnel to work at heights).

Example #2: Smart Management

Inventory management is a very important task. After all, inventory equals money. Inefficient inventory management leads to a decrease in profitability, which subsequently affects the entire enterprise. AI can assist companies in this area and ensure that inventory is managed more effectively.

Based on previous information, current data, shipments, and product movement, AI can predict an enterprise’s needs and give balanced recommendations (purchasing, movement, etc.). It can determine which goods are selling faster, which are selling slower, and which are not in demand at all. This allows you to adjust inventory to avoid shortages and limit excess, and in accordance with these recommendations, it becomes possible to build more accurate inventories.

AI can also predict the right inventory at the right time, reducing the time it takes to deliver goods to the customer.

Advantages:

• reduction in transportation costs;
• reduction in the cost of storing goods;
• purchases become more efficient and balanced;
• improves the quality of customer service.

Example #3: Facilitating The Order Picking Process

AI can be linked to robots to make the work of order pickers easier and even completely automate the order picking process. This significantly saves time and increases productivity. This solution also allows for round the clock work and ensures uninterrupted operation of the network. For example, the Cdiscount marketplace has implemented robots with AI into its order picking process.

Thanks to the robotic system, order picking has been optimized. The warehouse has a fleet of hundreds of robots that can move in three directions. Robots can move on the ground and climb to a height. Thanks to this technology, Cdiscount has increased its warehouse capacity by fivefold and productivity has increased three to four times compared to manual control.

Benefits:

• faster and more accurate order picking;
• reduction in operating costs for personnel;
• increased employee efficiency.

Example #4: Automation of the Parcel Sorting Process

As e-commerce grows, so do parcel flows, which also require process optimization. AI is quickly becoming a valuable tool for automating this stage of the logistics process.

Express delivery company STO Express uses robots to sort its parcels. A robot equipped with a camera that moves independently, thanks to optical recognition, can scan product labels and their characteristics (weight, size, geography, and delivery address) for quick identification. Thanks to a predefined sorting system, the robots automatically direct parcels to their intended destinations.

Thanks to sorting robots that work together with AI, STO Express processes 18,000 parcels per hour. The company has also increased the sorting process’s efficiency, accuracy, and safety, which has helped to reduce the company’s labor costs.

Benefits:

• more accurate assessment of the parcel arrival time;
• reduction of labor costs;
• increased process safety;
• improved service quality and customer satisfaction.

As can be seen from the examples described above, AI already has many possible applications in logistics. Any tasks that require analyzing large amounts of data, accounting, or calculating something are solved much faster and more efficiently with the help of AI.

Of course, setting up and training any automated system based on artificial intelligence is a rather complex, long, and expensive process, but with proper organization, the investment more than pays off in the medium term. At the same time, it is worth understanding that AI technologies are now developing at a very fast pace and are becoming more accessible. Therefore, the widespread use of AI in logistics is only a matter of time.