Artificial Intelligence in Logistics

Technological advancements are transforming numerous industries, and logistics is one of them. Artificial intelligence (AI) has revolutionized logistics. This technology automatizes plenty of processes, which leads to companies saving time and money. Let’s analyze the role of AI in logistics.

Automated Warehouses

Many companies require fast and reliable logistics solutions, that facilitate routine tasks. AI transforms warehouse processes, and intervenes in areas of warehousing operations, such as data collection and inventory processes. AI is crucial in creating forecasts for products, and these forecasts improve the ordering process and better plan. Furthermore, AI can calculate the best routes for in-transit goods, identify, organize and optimize inventory, which means lower transportation costs. If the business has multiple warehouses, AI can connect them and find the best options when it comes to inventory transport.

Demand forecasting

We mentioned above that AI can help create forecasts for products, which answers the need of real-time data. Why do they require this information? It is because a crucial business need is to predict the number of goods needed in the future. Manually sorting through data consumes a lot of time and makes it difficult to accurately predict future needs. If a company runs out of certain products, this will be a huge issue that might upset customers and impact their future orders. For a business, this means lost sales, revenue, and customers.

AI provides prediction algorithms that precisely track and measure inputs and variables. By using AI in demand forecasting, companies reduce error rates significantly compared to traditional ways.

Enhanced customer experience

AI comes with another benefit in logistic: enhancement of the customer experience. AI creates a better customer experience through product recommendations and personalization. Customer loyalty increases significantly when they get a personalized experience, especially considering the fact that nowadays there are countless stores (both physical and online) to choose from.

If you would like to know more about the areas where AI helps you, we have prepared an article called “What can AI do for your business?”.

Graph going up and the words Customer experience

Supply planning

First, let’s define supply planning: it is the part of supply chain management that is involved with determining the way to best fulfill the requirements from the demand plan. These actions have the purpose to balance demand and supply in the most profitable way for the company.

Because businesses that use AI have more accurate forecasts, they analyze demand with real-time data and optimize their supply chain flow. This uses fewer resources and minimizes waste.

Back-office operations

AI helps you automate document processing and other manual office tasks. Document automation technologies increase the efficiency of the processing of documents such as invoices, rate sheets and others, all while reducing the risk of human error. Furthermore, it helps with scheduling and tracking (a considerable part of logistics operations), email processing and report generation.

What are some applications of AI in logistics?

  • Autonomous vehicles: Autonomous trucks, vans, or busses work on their own or with a driver, and transport goods. While they are not fully autonomous yet because of current regulations, the improvement they bring in logistics is significant (optimized routes that save time, reduced costs, fewer accidents, etc.)
  • Dynamic pricing: it is a pricing strategy that applies variable prices instead of fixed ones. Many retailers use them as a way to get rid of extra stock, but they are more than discounts at certain times of the years. Pricing software uses complex machine learning algorithms that analyze customer data and adjust prices in real time.
  • Smart roads: they have infrastructure for autonomous vehicles and are integrated with advanced network and communication technologies. They help reduce delays in the supply chain and improve road safety. Smart roads have solar panels and LED lights that produce electricity and prevent the roads from being slippery during the winter. They have sensors that are connected to the internet and measure traffic volumes and patterns. Moreover, smart roads sense when a vehicle leaves the road or when an accident happens, and alert emergency services.
  • Predictive maintenance: It is a type of condition-based maintenance that monitors the condition of assets using sensor devices. We have an entire article dedicated to predictive maintenance that will answer a lot of your questions. Click here to view it.
  • Route optimizations: AI tracks and analyzes the existing routing, and then, using the data, it optimizes it. AI uses path algorithms to identify the most efficient route for trucks, which speeds up the shipping process and reduces costs.


Embracing artificial intelligence is the first step towards improving your logistics operations. As we have presented in this article, there are plenty of uses of AI that will suit your business. The key points are that AI automates numerous processes, reduces errors, saves money, creates more accurate forecasts, and, in the end, improves the business overall and increases customer satisfaction. AI in logistics helps your company plan better and stay efficient, which is essential if you want to stay one step ahead of competition.  

If AI is a topic of interest for you, we have prepared a few articles that you don’t want to miss on: