AI is boosting logistics – DHL Logistics Trend Radar 7.0 report

DHL recently released the seventh edition of its Logistics Trend Radar report. It presents the most important social, business and technological trends that are affecting changes in logistics. Artificial intelligence comes to the fore in this year’s edition. Related to it are several extremely important trends that are expected to revolutionize processes in logistics. Quite a lot of space in the report is dedicated to sustainability, and retailers should also be interested in the trend of e-commerce evolution.

How AI is increasing efficiency in logistics

As is the case in many other fields, the impact of artificial intelligence on logistics is growing at a dizzying pace. The DHL Logistics Trend Radar 7.0 report highlights five significant trends in which AI is playing an important role and helping companies best optimize their supply chains. These are:

• generative AI;
• AI audio;
• computer vision;
• advanced analytics;
• AI ethics.

One of the most important applications of generative AI in logistics is the optimization of freight transportation routes. Through real-time analysis of various factors, such as traffic volume, weather conditions and delivery priorities, AI-based systems can suggest the most efficient routes. What’s more, they can also explain why they chose them, which increases the confidence of logistics staff in these suggestions.

Generative AI’s ability to create text, images, or code can be used to:

• generating product descriptions, warehouse reports, or answers to customer questions;
• creating visualizations, such as warehouse layouts;
• generating scripts for data analysis, optimizing routing algorithms and creating predictive models.

AI-based chatbots can significantly improve the supply chain communication between a company and its customers, as they can provide customers with answers to their questions very quickly. Using generative AI, the logistics industry will be able to respond more effectively to the operational challenges of growing global demand.

And what is audio artificial intelligence all about? It deals with analyzing and understanding sounds – not only from humans, but also from machines – and recognizing patterns in them. The use of AI audio in logistics can be very helpful. In noisy environments, it is difficult for the human ear to detect sound anomalies, and AI-based solutions have no problem with this. This is very helpful in identifying malfunctions in machinery and equipment at an early stage.

AI-based solutions can analyze vibrations and sounds produced by trucks, for example, to detect any mechanical problems. They can also predict tire replacement or brake repair, affecting reliable vehicle operation.

And computer vision – by detecting unique identifiers such as QR codes – can track goods as they move through a warehouse, providing more accurate fulfillment rates. In 2023, the global computer vision market was valued at about $17.7 billion USD and – thanks to continued improvements – is expected to grow at a compound annual growth rate (CAGR) of 19.6% through 2026.

In the next five years, computer vision is expected to become widely used in logistics operations, and many new ways of using it are likely to emerge.

The logistics industry is undergoing a real revolution thanks to advanced data analysis. Companies are increasingly willing to use modern tools that allow them to analyze huge amounts of information. This helps them better anticipate future demand, optimize delivery routes or manage inventory.

Artificial intelligence and machine learning play a key role in this, enabling automation of many processes and more precise decision-making. As a result, freight transportation is becoming not only more efficient, but also more flexible and resilient to unexpected events.

And with the emergence of regulations for artificial intelligence, the AI ethics trend will focus on ensuring that AI systems are transparent, fair and accountable in their decision-making processes.

The e-commerce evolution trend

Today, e-commerce companies must be innovative to attract customers. Attractive pricing is no longer enough – to succeed, companies are using modern supply chain strategies (based on deep data analysis), and:

• enable customers to discover new products (discovery-based shopping), often through personalized recommendations;
• introduce gaming elements into online shopping, such as points or rewards for purchases;
• collaborate with influencers to promote their products;
• adapt their websites to mobile devices;
• use social media to sell.

Thanks to advanced data analysis, which is extremely valuable to the e-commerce industry, companies can create highly personalized offers. By analyzing large amounts of information, they are able to pick up hidden patterns in customer behavior and preferences. This allows them to tailor offers to each individual, creating an extremely personalized shopping experience.

Companies also need to take care of sustainability while keeping prices as low as possible. This means they need to find ways to reduce costs, including those associated with transporting goods – they should open up to new, more efficient and environmentally friendly ways of delivering products to customers.

Taking care of sustainability

The topic of sustainability is becoming increasingly important in the logistics industry. Two trends will be of great importance – not only for reducing carbon emissions, but also for increasing energy efficiency in supply chains:

• renewable energy infrastructure – the creation of an efficient infrastructure that will enable a shift from the generation and use of fossil fuel-based energy to the generation and consumption of energy from renewable sources, such as wind, solar radiation and biomass, among others;
• sustainable fuels – using fuels produced without fossil fuels, such as oil or natural gas. This is especially the case for airplanes and ships, since cars and utility vehicles will mostly have electric engines.

Electrification is also a very significant trend in logistics, as road freight is responsible for a large portion of CO2 emissions. Globally, the number of electric vehicles is expected to grow tremendously – from less than 45 million in 2023 to 250 million in 2030 and 525 million in 2035.

The DHL Logistics Trend Radar 7.0 report is based on findings from interviews with a wide range of stakeholders and experts. It is available for download here.