3 Ways AI Can Reap Benefits
Set to generate more than $550 billion in revenue by 2024, arguably no sector in the technology world is growing more rapidly than artificial intelligence (AI) and machine learning (ML). And while AI may be experiencing well-known impacts on industries such as healthcare and retail, it's also quietly affecting logistics and shipping, particularly freight procurement.
Logistics, supply chain and manufacturing are historically slow moving when it comes to adopting new technologies. However, given how rapidly things are changing as a result of the pandemic, now is the time when carriers and shippers need to take a long, hard look at their technology stack. The only way to prepare for unplanned disruption is to add technology that empowers adaptability.
With that in mind, here are three key areas where AI can reap significant benefits for both shippers and carriers.
1. Alternate carrier procurement. Requiring a huge amount of manual effort, locating an alternate carrier when your primary carrier rejects a load is one of the most painstaking and convoluted tasks shippers face today. But what if it was possible to circumvent the broker market and rely on technology to directly locate the best alternate carrier in a fraction of the time? With AI, it is.
By leveraging AI tools, shippers can pair their own data with third-party data to dynamically source the perfect alternative carrier matches based on a host of variables, including type of load, load weight, delivery location, and more. This allows shippers to eliminate any legwork spent finding an alternate carrier.
2. Waste elimination. The freight industry today is littered with waste—especially when it comes to freight procurement. From sky-high brokers' fees, to the costs incurred when carriers have to pick up loads that are not in their sweet spot, the freight market is rife with inefficiencies that drain both human capital and transportation budgets, resulting in millions of dollars in waste.
With sophisticated AI, ML, and data science tools, shippers are now empowered to drive better bargains for their shipping rates. When shippers have more compliant carrier matches to work with, they can avoid the costly spot market, or level-set contracted rates to always ensure they are paying fair-market cost based on current supply and demand.
AI eliminates the need for broker middlemen by using a combination of the shipper's configured rules/attributes and third-party data to dynamically connect shipper loads to small carriers.
Without the broker, there are no hidden margins. Instead there is 100% rate transparency and actionable data so the shipper understands true market value for each load and can make better informed decisions moving forward.
3. Dynamic data management. Data is the lifeblood of effective logistics management. However, many shippers and carriers still rely on outdated technology, spreadsheets, or other antiquated methods to manage their operations and decision-making. This simply isn't good enough, especially for growth-oriented businesses that are looking to build the resilient supply chains of the future.
To make the best business intelligence decisions today, logistics professionals must be able to quickly access real-time insights so they can make the most informed conclusions possible and adapt to changing market conditions.
By embracing AI technology, and eliminating internal data silos, shippers and carriers can create a win-win "broker-less" environment where they have all the information they need—from delivery delays to pending shipments—directly at their fingertips.