The news hype about AI (artificial intelligence) and the big money investments flowing into the freight and logistics technology space seem to indicate that the industry is making great strides in adopting digitalization and using the latest forms of technology, such as AI. But, in reality, there is still a lot of room left to automate processes and adopt cutting-edge technology. The focus on AI and machine learning has been considerable in recent times, but is it actually being used by the forwarding and logistics industry today?
Overall, AI is a relatively untapped technology in the logistics space. We are barely skimming the surface of what’s possible when existing AI technology is applied to logistics processes. There are a few freight tech solutions using machine learning and smart algorithms for specific functions, but AI in this industry is truly in its infancy, far from reaching its full potential. In general, less than 3-4% of the logistics industry is seeing any benefit from this technology. One of the reasons that AI is lagging is that it requires extremely large datasets, which have not historically been available in large part because of the lack of digitized and normalized data. Plus, it requires greater computing power, something that has not always been available, particularly to small and midsized companies. Over the next 3-5 years, as more businesses move to the cloud and move to digitize manual processes, we will see a noticeable pick-up in the development and adoption of AI solutions, an exciting moment for the industry.
Simplifying Customs Complexity
One area of freight management where AI has tremendous potential is in the processing of cross-border shipments. Customs compliance is one aspect of the industry where massive amounts of transactions are processed daily. These significant volumes have helped accelerate the use of AI to enable businesses to file the massive number of customs documents much, much faster. For instance, bots can be used to scrape information from a commercial invoice to auto-complete required CBP filings, saving time and reducing errors related to manual keypunching.
Manually loading multi-page carrier rate contracts into a rate management system is another tedious, time-consuming, and error-prone process, albeit a common one for logistics service providers. At Magaya, we’ve developed a proprietary AI-powered rate processing bot to assist our fully-managed services freight rate management team, an important and unique value-add for our clients. In no time, the bot scans carrier contracts into our Magaya Rate Management solution, enhancing the team’s productivity, delivering added value to our clients, saving precious time, and improving data accuracy.
Bots, built with AI, are self-thinking engines that scrape data and map datasets to automate repetitive tasks and provide faster processing as compared to humans. They help eliminate redundant, time-consuming processes, so that the human teams can focus their time on more strategic initiatives.
Intelligent Exception Management
Real-time transportation visibility helps identify freight that is not moving as planned. It enables shippers and logistics partners to address in-transit freight disruptions, which could occur anywhere throughout the shipment journey, and are becoming increasingly common as of late. Timely digital alerts enable a shipper to make proactive adjustments, change delivery routings, adjust inventory, and keep customers informed. In addition, accurate shipment status updates are key to keeping supply chain trading partners and suppliers notified of unanticipated changes.
Predictive analytics as part of a visibility system draws on artificial intelligence, data mining, machine learning, modeling, and statistics to provide actionable insights that offer better, more accurate predictions about future events. A range of data sources can be analyzed, such as historical weather patterns, GPS (Global Positioning System), bar codes, a truckers’ ELD (electronic logging device) plus more to predict disruptions, reduce risk, improve forecasting, and decision making.
LTL and FTL Quote Bot
The time-savings from our AI bot for over-the-road freight quotes, LTL (less than truckload) and FTL (full truckload), is truly revolutionary. Introduced to the market in April 2022, Quote Automation by Magaya extracts details from emails using natural language processing, a branch of AI. The solution then ingests the data and responds in seconds.
Here’s an example of how the bot works: a forwarder receives an emailed quote request from a customer for a shipment originating in New York and destined for Cincinnati. The bot ingests this emailed data, an operator reviews and adjusts when necessary, and then the system quickly responds in seconds with a range of carrier options with transit times and contract rates. A phoned-in quote request is also processed in the same way.
AI eliminates the time-consuming task of gathering rates from multiple carriers, adding a markup, and summarizing this in an email. Users save approximately 15 minutes per quote, which adds up to incredible time savings. The Quote Automation by Magaya AI bot boosts productivity for all involved providing a better experience for both the sender and receiver.
AI will revolutionize logistics processing, removing time-consuming, tedious manual work that is still common today. People will be freed up to be productive in other business areas and have more time to spend with their family and friends. Customers will have a better experience and the efficiencies achieved will be nothing short of remarkable. This is only the beginning of a bright future for AI in the logistics industry.