Using AI in Logistics: Little Adoption – Big Possibilities

AI in Logistics

The use of AI in Logistics is often discussed but seldom implemented. The world loves buzzwords, and the supply chain management industry is not immune to their allure. AI is the latest buzzword on the tip of everyone’s tongue, and it is seemingly everywhere. Corporate America is buying in hard—The Financial Times reported that almost 40 percent of S&P 500 companies talked about AI during their recent quarterly reports. When cross-checked with the same companies’ regulatory filings, however, the number was just 16 percent.

Use of AI in Logistics Applications

In the logistics arena, this actual adoption rate rings true. Everyone is talking about AI, but not many have put it to use in big, impactful ways yet. A recent survey in the freight industry found that while more than 90 percent of respondents intend to implement AI, only 14 percent were using it, and of that number, only 7 percent considered themselves “active” users.

The reality is that the logistics industry tends to adopt technology a bit slower than other industries, and it is likely that will hold true with AI. As the industry begins to adopt some of the newer automation and technology, however, it opens the door to pulling AI into the mix. More companies are now digitizing key functions in their supply chains, something that wasn’t even under consideration five or 10 years ago. As digitizing becomes the norm, it’s only natural that there will be more space to integrate AI. In the meantime, AI will mature, and eventually, the two will meld together for the industry.

The rollout of AI will also vary by supply chain sector. Air freight carriers, for instance, generally lead the modality pack in its use of automation. You can likely look for air to implement AI ahead of ground and sea. Ocean carriers, with a smaller pool of providers, are just beginning to create industry standards for data exchange. They may pull up at the rear, then, when it comes to AI adoption.

In the current environment of labor shortages, the profession may most want AI to help replace the need for humans in some areas of the supply chain. Whether it can significantly help with that issue remains uncertain, but surveys indicate that large companies expect it to have a big impact there.

At the end of the day, the use of AI in logistics is an exciting prospect that has the potential to transform supply chain management. Certainly, AI is poised to play a key role in the coming years. But supply chain management consultants would urge their clients to view claims about AI with eyes wide open. The FTC recently published a warning that some tech companies are using AI to entice customers while not truly having the promised capabilities in place. Tread cautiously when considering new software or tech that promises all the bells and whistles provided by AI. It may sound exciting, but it’s a technology still in its infancy, and buyers should beware.

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