📊 AI in logistics and supply chain

Irbis Index October 2023

To view the full Index for October 2023 click here.

Artificial Intelligence drama was unfolding over the weekend with the OpenAI CEO Sam Altman unexpectedly fired on Friday, only to be hired by Microsoft hours later to lead a new advanced AI research team.

Microsoft's shares hit an all-time high following the announcement, making it the clear winner in this situation.

On this note, here are 5 AI-powered use cases for supply chain operations.

Irbis Capital 

Artificial Intelligence (AI) has emerged as a game-changing force in many industries. The supply chain and logistics sector hasn’t been an exception.

AI's ability to process vast amounts of data, make intelligent decisions, and predict outcomes makes AI a critical tool for logistics operations.

Inventory automation L’Oréal has implemented Hardis Group’s Eyesee drone system for inventory management. A drone fitted with an onboard camera passes by the shelves of each section to carry out the inventories. Thanks to AI video processing, the drone can read barcodes and recognize empty spaces, which helps in packing and inventory management. Tests have shown that inventory can be counted three times faster than before when using the Eyesee drone solution in combination with standardized labeling and uniform pallet categorization

Increase workplace safety Amazon has introduced a new mobile robot called Titan to assist with heavy lifting in their fulfillment centers. Titan can lift up to 2,500 pounds and will handle larger and bulkier items like appliances and pallets of products. These robots improve workplace safety, reduce repetitive motions, and create new job opportunities.

Predictive maintenance General Electric (GE) has been using IoT technology for predictive maintenance in wind turbines. GE Renewable Energy developed a software called Lifespan, which offers real-time monitoring and control, predictive analytics to provide insights on asset health and performance, and integrated planning and mobile applications for work execution in the field.

Real-time tracking UPS uses AI for real-time tracking of packages. The company developed a chatbot, UPS Bot, which can track packages and provide shipping rates. The bot is integrated with the UPS My Choice system, allowing customers to obtain information about their incoming packages and deliveries without providing a tracking number.

Material Reduction: Amazon developed a tool called PackOpt that uses AI to reduce packaging material, saving the company approximately 60,000 tons of cardboard annually. PackOpt employs machine learning algorithms to analyze order patterns at individual facilities and optimize the available cardboard box suite based on the data.

News

Billionaire group building AI research lab in Paris Rodolphe Saadé president and CEO of the CMA CGM Group, a French container shipping giant, alongside Eric Schmidt (Schmidt Futures), and Xavier Niel (Iliad S.A.) are establishing a new nonprofit AI research lab in Paris called Kyutai. With an aim to propel Europe's AI industry, Saadé and Niel will each invest €100 million, while Schmidt will also contribute an undisclosed amount through his philanthropic effort, Schmidt Futures. The lab, operating as a nonprofit and open-source organization, has already announced the recruitment of several scientists from renowned companies such as Microsoft, Goldman Sachs, and Meta. The founders believe that France has the potential to produce top-level scientists but caution against over-regulation in the EU. (link)

Digital logistics: Technology race gathers momentum A McKinsey survey of over 250 global shippers and logistics providers shows that technology investments are set to increase, with many companies piloting advanced use cases.

• Turbulent market forces are driving companies to transform their logistics functions for greater flexibility, predictability, efficiency, and resilience.

• The survey reveals that companies are increasingly turning to technology to solve their logistics challenges, and most respondents have sustained or increased their technology investments since 2020.

• Companies are using technology to reduce costs and improve productivity in transportation and warehousing, with real-time transportation tools, visibility planning, and telematics for fleet management seeing above-average adoption and investment rates.

• Foundational technologies like warehouse management systems and transportation management systems have achieved mainstream adoption, and companies that have not invested in these systems may risk falling behind.

• The next frontier of productivity in digital logistics could come from leading-edge solutions such as robotics, network digital twins, and real-time insights.

• Effective integration of data flows and complexity management is crucial for optimizing performance and achieving a return on investment in logistics technology.

By investing in digital logistics technology and making necessary operating model changes, companies can outperform in tough market conditions and pull ahead of their competitors. (link)

Generative AI could boost supply chain planning Belgian tech vendor OMP has launched a program of generative AI (Gen AI) pilots to enhance supply chain planning. The company is integrating Gen AI technologies into its Unison Planning software solution, aiming to bring interactivity and intelligence to digital supply chain planning. Initial use cases involve deploying cloud-based Gen AI to elevate planning knowledge and insights across the enterprise. Gen AI solutions will provide a chatbot-like interface for consulting OMP documentation, improving access to expert knowledge. It will also allow software platforms to generate insightful information in response to natural language queries, giving users access to vital supply chain information. (link)

AIT Worldwide expands in Europe as it replicates 'middle-mile' service AIT Worldwide Logistics is expanding its "middle-mile" service strategy to Europe with the acquisition of Lubbers Logistics Group. The Netherlands-based Lubbers specializes in road transport, project cargo, and international forwarding. The acquisition will bring Lubbers' 375 employees and 18 locations in four new countries (Denmark, Norway, Romania, and Turkey) into AIT's network. This move follows AIT's recent launch of its US Middle-Mile Network, which offers improved transit times, on-time performance, and reduced dwell times. AIT aims to provide end-to-end solutions with its middle-mile service in Europe, complementing its US network and providing customers with enhanced solutions and options. (link)

DHL Express invests €562M in its Central Asia Hub DHL Express has invested EUR 562 million in its recently expanded Central Asia Hub (CAH) in Hong Kong. The hub handles nearly 20% of DHL Express' global shipment volume and has seen over 30% growth in throughput between Asia and other continents in the first three quarters of 2023. With a strategic location within a four-hour flight time to major cities in Asia Pacific, the CAH serves as a gateway to one of the world's fastest-growing regions. The expansion includes a 50% increase in warehouse space, an automated material handling system, and advanced technology for increased productivity and accuracy. The CAH is also committed to sustainability, with features such as solar panels and battery storage for renewable energy utilization. (link)

J.B. Hunt and BNSF launch a new intermodal service J.B. Hunt Transport Services and BNSF Railway have announced the launch of a new intermodal service offering called Quantum. This service aims to accommodate the service-sensitive highway freight needs of customer supply chains. Quantum focuses on providing consistency, agility, and speed required to move sensitive freight via rail. Key service elements include up to 95% on-time delivery service, 24/7 oversight of every load, and service and technology integration. The collaboration between J.B. Hunt and BNSF allows them to create a unique service that provides value and an alternative to highway transportation. This new intermodal service offering aims to tap into the substantial volume of cargo that could convert to intermodal but has not yet made the transition. (link)

Merger dispute between Forward Air and Omni Logistics Ancora Holdings Group, an activist investor in Forward Air, has accused Omni Logistics of harassment and intimidation after expressing concerns about a proposed $3.2 billion merger between the two companies. Ancora claims that Omni has sent legal letters to suppress opposition to the deal. A separate group of Forward Air shareholders temporarily blocked the transaction, and Forward Air later announced its intention to terminate the deal, citing breaches by Omni. A court date has been set for January 19, 2024, to resolve the dispute. Ancora opposes the transaction due to the purchase price, debt burden, and perceived power shift to Omni's stakeholders. (link)

Reports

Global truck driver shortage to double by 2028 The IRU (International Road Transport Union) has conducted a study on the global truck driver shortage.

• Currently, there are over 3 million unfilled truck driver positions in 36 countries studied.

• Truck driver shortages increased globally in 2023, except for Europe and the United States where shortages eased slightly due to softer transport demand.

• The truck driver profession has an aging population, with less than 12% of drivers below 25 years old.

• The share of women truck drivers remains low at only 6%.

• The structural issues behind truck driver shortages are impacting transport services, and urgent action is required to attract and retain drivers.

• Without significant action, over 7 million truck driver positions could be unfilled by 2028, including 4.9 million in China, 745,000 in Europe, and 200,000 in Turkey.

• Driver shortages have negative consequences for communities, supply chains, and economies that depend on the trucking industry. (link)

More Stories 

Layoffs and bankruptcies pile up in logistics amid shocking downturn - Freight Waves

Simplified Global GHG Fuel Standard for marine fuels put forward to help meet net zero target - The Loadstar

UPS unifies supply chain tools in one dashboard - Yahoo Finance

Analysts predict Pepsi is on its way to surpassing Coca-Cola’s value - Transport Topics

Apple Advances In-House Component Design Amidst Supply Chain Independence Goals - Tech Times