TL;DR:
- Artificial intelligence (AI) is set to transform supply chain management and reduce human labor in the transportation industry.
- AI technologies, such as sidewalk robots, self-driving trucks, and generative AI, will revolutionize supply chain operations and improve efficiency.
- Predictive AI/ML systems can anticipate and prevent disruptions, enhancing the reliability of transportation networks.
- Autonomous trucks are expected to reduce costs and eliminate the need for human drivers within the next few years.
- Generative AI will play a significant role in shipping giant Maersk’s operations, enabling better planning and understanding of customer transactions.
- While job losses may occur, AI-driven advancements will create new roles and opportunities within the industry.
Main AI News:
The transportation industry is on the brink of a significant transformation, fueled by artificial intelligence (AI) and its potential to revolutionize supply chain management and reduce reliance on human labor. Industry insiders and analysts predict the emergence of sidewalk robots, self-driving trucks, and customer service bots, along with generative AI capable of predicting disruptions and explaining deviations in sales forecasts.
In a recent research note, Morgan Stanley’s analysts, led by Ravi Shanker, stated that AI has the power to eliminate human touchpoints across the entire supply chain, including back-office tasks. They further emphasized the transformative nature of AI, branding it as the most powerful technology to date within the realm of disruptive technologies such as autonomous vehicles, electric vehicles (EVs), blockchain, and drones, which are reshaping the freight transportation space.
The analysts anticipate the deployment of several hundred autonomous trucks in the United States by 2024, reducing the cost-per-mile by 25% to 30% and ultimately rendering human drivers unnecessary within a timeframe of over three years. The potential of AI to streamline and optimize supply chains holds the promise of eradicating issues like empty shelves caused by complex global supply networks.
The COVID-19 pandemic and the Russia-Ukraine conflict disrupted the already intricate process of producing and transporting goods, leading to component shortages and logistical challenges. The multifaceted nature of supply chains often leaves companies unaware of what transpires throughout the entire process. AI and machine learning come into play by predicting potential disruptions and mitigating them before they occur. Morgan Stanley’s analysts highlight the ability of AI/ML systems to avert disruptions entirely, allowing for smoother operations.
Investment firm Jefferies’ analysts also recognize the potential impact of generative AI on transportation and logistics. They envision its applications in demand forecasting, predictive maintenance for trucks, optimization of shipping routes, and real-time shipment tracking. By adopting generative AI, the trucking and logistics industry could overcome challenges like truck driver shortages and weather-related interruptions, ensuring a more efficient and reliable supply chain.
The integration of generative AI is a significant focus for shipping giant Maersk. Navneet Kapoor, Maersk’s Chief Technology and Information Officer, states that AI and machine learning have evolved from research projects to tangible initiatives within the company. Kapoor identifies generative AI as a pivotal opportunity to bring AI mainstream. Maersk already utilizes AI to enhance customer planning, employing predictive cargo arrival models to improve scheduled reliability. The company intends to employ generative AI to recommend optimal solutions when shipping routes become congested and leverage large language models to gain a deeper understanding of the sales process.
The rise of generative AI does raise concerns about potential job losses. Kapoor acknowledges that while traditional roles may be affected, new jobs will emerge, as has been the case with prior technological disruptions. Positions like prompt engineers, responsible for training AI to provide more accurate responses, are likely to be in demand. However, Morgan Stanley warns of a double-edged sword for transportation companies, as AI-driven efficiency might reduce their reliance on third-party logistics firms that handle packing, storage, and shipping services.
Maersk has been proactive in investing in AI startups through its Maersk Growth venture arm. Startups like Einride (self-driving electric trucks), Pactum (automated sales negotiations), and 7bridges (AI platform for stock management and delay anticipation) are seen as enablers and accelerators for Maersk’s transformation. Kapoor stresses the importance of staying ahead of the curve and learning from these data startups to maintain a competitive edge.
Furthermore, AI-powered “knowledge assistants” can address the challenge of over- and under-ordering goods caused by poor communication between internal teams. Igor Rikalo, President and Chief Operating Officer of o9 Solutions, a software company specializing in data centralization and analysis, envisions a future where AI-powered knowledge assistants equipped with large language models provide valuable insights. These assistants can analyze vast datasets and answer queries related to supplier discrepancies, streamlining integrated business planning teams and reducing the need for extensive manpower.
Conclusion:
The integration of AI technologies in supply chains signifies a monumental shift in the transportation industry. With the advent of AI-driven solutions like generative AI and autonomous vehicles, companies can streamline their operations, reduce costs, and enhance reliability. While job displacement is a possibility, the emergence of new roles and the increased efficiency brought by AI will drive innovation and growth. Businesses that embrace and leverage AI technologies will gain a competitive advantage, while the market may witness changes in the dynamics between transportation companies and third-party logistics firms. Adaptation to AI-powered solutions will be essential for staying ahead in the evolving supply chain landscape.
