As we move ahead with the time, the term ‘Artificial Intelligence (AI)’ is becoming a part of our daily conversations. Machine learning and robotics are transforming industries by streamlining processes and improving efficiency. They quicken the processes and reduce reliance on manual labour. In eCommerce logistics and shipping, AI is already making a significant impact. It is enhancing supply chain management, thus leading to the adoption of AI-powered tools. The market size of AI in logistics was valued at around USD 17.96 billion in 2024. It is expected to grow at a CAGR of 44.40% between 2025 and 2034 to reach USD 707.75 billion by the end of this period. Let us take a closer look at the role of artificial intelligence in logistics.
What is Artificial Intelligence
In simple terms, Artificial Intelligence (AI) is the ability of a machine (or a combination of different devices) to make intelligent decisions (similar to what humans can take) based on the available dataset. Such machines can learn on their own to make more corrective decisions based on the choices they made along with the collected data. This process of self-learning by machines is also known as machine learning.
How AI is making the Warehouses More Advanced
Artificial intelligence in logistics can improve warehouse operations significantly with the use of real time data analysis. It increases efficiency and productivity. Businesses are mainly using this modern technology to track inventory in real time. It also helps in demand forecasting by assessing historical sales data. Using this information, warehouse management can maintain appropriate inventory levels and prevent the problem of overstocking and stockouts. AI also helps in appropriate labour allocation to carry out warehouse operations efficiently. Repetitive tasks such as picking, arranging, and packing the items can be managed using this advanced technology.
AI Helping in Finding Quickest Delivery Route
Customers expect their shipments to arrive timely. Delayed shipments cause dissatisfaction and can ruin the company’s reputation. In a survey, 23% of the respondents mentioned that they won’t shop again from a store that delayed delivery. Businesses must choose the shortest possible route to ensure timely deliveries. AI in logistics enables route optimisation by considering different routes, checking real-time traffic, and forecasting the weather condition. It also reroutes the riders immediately in case of a road closure or traffic jam. This helps avoid delays and lowers fuel consumption.
AI Assisting in Last Mile Delivery
Last-mile delivery is one of the most crucial steps in logistics. It is important to ensure efficiency at this stage and it can be achieved using AI-driven last-mile delivery software. Chatbots, for instance, play an important role in improving customer experience. Customers can get instant information about their shipment’s status through chatbots and even log complaints. Likewise, an AI prediction algorithm enables organisations to learn if there is any need for vehicle repair so that it can be addressed immediately.
Voice Assistants to the Rescue
Voice assistants enhance the shopping experience for customers. They can use these advanced virtual assistants also known as chatbots in ecommerce to place and modify their orders. The modified orders are immediately updated in the system. Voice assistants also help shoppers with additional questions. They clear customer doubts to accelerate the buying process and lower the chances of cart abandonment and returns. Voice assistant also provides information related to the order status. Businesses have also started using voice assistants to collate customer feedback. This is used to assess the performance and devise strategies to improve the logistics process.
Conclusion
AI-powered tools are enhancing efficiency and reducing the overall expenditure involved in the logistics processes. With this advanced technology, businesses can make informed decisions when it comes to maintaining appropriate inventory levels in the warehouse and deciding delivery routes for their riders. AI in logistics helps in real-time tracking of items in the warehouse and packages that are out for delivery. Various tasks such as route optimisation, demand forecasting, and packing can be done with ease using artificial intelligence. It increases speed and accuracy. By adopting this new-age technology, businesses can gain an edge over their competitors.
Great content. I would just like to add on that With the growing digitization of the professional world, more and more companies are adding artificial intelligence (AI) to their supply chain in order to maximize their resources by reducing the time and money spent on figuring out how, where and when to send a package to a certain place.