Kick-started by the global pandemic, the transportation and logistics industry has seen a boom in digital transformation over the past five years. While we’ve started to see companies embrace general technology, however, a recent study from HERE Technologies and AWS found that just 19% of logistics companies are using AI for advanced use cases, such as demand forecasting.
In 2025 logistics companies should ensure they don’t fall behind their customers in other industries in putting to use advanced automation, powered by AI. AI-driven automation can streamline multiple complex processes for logistics organisations. These include inventory management and warehouse automation, which has the potential to transform functions across the supply chain. These efficiency gains will help businesses counter tight margins while staying agile. Perhaps most importantly, they will help logistics companies deliver better service in an increasingly demanding market.
Embracing new, advanced technologies will increasingly be key to success for logistics companies. So, what steps do they need to take to see the benefits?
Modernise infrastructure
Logistics companies must make substantial investments in modernising infrastructure, operations, and workforce skills. A Neos Network’s study revealed that 63% of UK logistics companies report a shortage of digital skills. Therefore, a successful AI implementation will, however, require not only technology upgrades. Companies will also need a strategic focus on upskilling personnel to manage and optimise these new systems.
Integrated cloud-based platforms will be essential, enabling companies to unify their logistics needs into a single, centralised dashboard.
Intelligent document processing is a logical first step towards implementing AI-powered technology. The pocess can deliver immediate value in this document-heavy industry, creating quick business wins with minimal investment. Businesses in the logistics sector handle large volumes of documents such as invoices, shipping documents, and customs forms. AI-powered intelligent document processing can extract data from these documents accurately, reducing manual effort and errors. AI like this can reduce costs, increase transparency and accuracy, and allow for faster, data-driven decision-making.
Focus on becoming greener
Green logistics will become a key focus as companies strive to align with sustainability goals. Motivated by regulatory pressures and consumer demand, logistics companies will further integrate eco-friendly practices across their operations. This will become increasingly important as these sustainability regulations become less flexible over time.
The HERE Technologies and AWS study also revealed that over 60% of logistics companies lack defined sustainability goals. The study highlighted this as an opportunity for organisations to leverage technology to streamline fuel usage and routes. Not only did this address environmental concerns, but it also reduced spending on fuel.
By integrating eco-friendly digital practices into their supply chain and operations, businesses can reduce their carbon footprint, lower energy consumption, and minimise waste. One example is using AI-powered technology to speed up customs clearance through Intelligent Document Processing (IDP). IDP enables fast-moving consumer goods (FMCG) manufacturers to accelerate their trucks through border customs, cutting clearance times by over 90%. Portumna Pastry Ltd, a pastry supplier based in Ireland, leveraged AI-powered IDP to reduce their customs clearance time at the EU/UK border from one hour to only five minutes.
Purpose-built AI can significantly optimise energy usage, streamline logistics operations, and minimise emissions. By enhancing operational efficiency, it not only predicts maintenance needs but also reduces delays across the supply chain, ensuring smoother and more sustainable processes.
Mistakes in freight forwarding documents can stop a shipment in its tracks at the border, grinding operations to a halt and causing delays for customers while fuel and demurrage costs rack up. To keep logistics smooth and efficient, AI-powered intelligent document processing can extract exactly the right information from huge volumes of documentation, delivering the right information to the right systems at the right time.
Embrace real-time monitoring of the supply chain
Finally, logistics businesses can rely on real-time monitoring to improve transparency across the supply chain. Using IoT and data analytics in monitoring can provide end-to-end visibility, ensuring a more customer-centric and resilient supply chain.
Access to real-time AI-powered insights gives businesses the ability to proactively address challenges like delays, shortages, or changes in demand, minimising the impact of these challenges on customers. Embracing AI-powered digital tools will enable businesses to adapt more quickly and reduce costs, even as the market remains volatile.
The opportunity is immense: by adopting AI-powered, digital solutions, logistics businesses can significantly increase operational efficiency, streamline processes, and ensure better decision-making. Into 2025, leveraging these technologies will not only drive efficiency but also position logistics companies at the forefront of innovation, enabling a more sustainable and responsive supply chain for the future.
- AI in Supply Chain