Exploring AI use cases in supply chain and logistics

Artificial Intelligence (AI) is more than just a “buzzword” – it is being integrated into many of the tools used by the supply chain and logistics industry today. AI has become such a hot topic and is considered vital to the future of the industry's technologies because it delivers a range of valuable benefits.

“AI assists in real-time decision-making and collaboration across the supply chain, helping companies retrieve and unify data across different entities both inside and outside the organization,” says Sriram Nagaswamy, EVP, of Technology at FourKites.

AI goes far beyond automation, according to Raj Subbiah, Head of Product at Uber Freight, offering powerful tools to predict demand, optimize routes, and streamline operations. In logistics, AI can analyze vast datasets in real time, uncovering patterns and opportunities that drive efficiency, reduce costs, and improve reliability.

Taking AI even further, Aron Kestenbaum, VP of Product at project44, adds, “An AI agent can autonomously reach out to carriers, brokers, customers, partners, etc., to get more information about a shipment and then take action based on the outcome of the interaction, letting the people focus on more strategic decisions.”

“I think the early adopters of AI are going to thrive in the logistics and supply chain market,” Kestenbaum asserts. “AI is going to be a huge differentiator.”

“AI tools will be incorporated into pretty much every class of supply chain and logistics technology,” Ken Wood, EVP, of Product Management, at Descartes predicts, “so everybody needs to get on board with it.”

With that in mind, this article explores a sampling of AI use cases in supply chain and logistics.

Data Management

One AI use case that almost every company in the industry could benefit from is basic data collection, processing, and management. “In the international and road transportation space there are a lot of tasks that still happen with paper, PDFs and spreadsheets, and this causes efficiency problems,” says Wood from Descartes.

AI can help reduce human error and improve efficiency by automating paperwork, customs compliance, and regulatory documentation, notes Lee Kimball, SVP and GM at TrueCommerce.

Nagaswamy from FourKites adds, “Imagine that instead of requiring manual inputs for basic information, users will be able to simply talk to an app or take a picture of what they see and the LLM will be able to identify and extract the same quality of information.” An LLM is a Large Language Model, a type of AI that can perform natural language processing.

Carrier Validation and Oversight

AI can help with both initial carrier vetting and ongoing management, explains Brian Smith, CEO of Banyan Technology. “AI offers service providers cost-effective oversight and validation of carriers to ensure that they continue to be who they say they are; loads don't get double brokered; and trucks stay on their routes.”

Load Booking

For brokers, AI can quickly match available loads with the most suitable carriers based on factors like location, capacity, and past performance, says Kimball from TrueCommerce. This increases the speed and accuracy of load-booking processes.

Rate Negotiation

AI can even negotiate rates for a 3PL provider and move forward with an approved carrier, with minimal human intervention, says Smith of Banyan Technology. “AI gathers data – assessing the load board, market conditions, and other factors like the weather – to determine the rate with 90-95% assurance. One of our clients feels they will reduce administrative costs on truckload execution for loads posted to job boards by over 50%.”

Route Optimization

Route optimization is an ideal AI use case for the supply chain and logistics market. “AI can optimize shipping routes for cost, time, and fuel efficiency, helping shippers reduce overall shipping expenses. Delivery companies like UPS and FedEx use AI to analyze a combination of traffic data, weather patterns, road conditions, and delivery windows to determine the most efficient delivery routes, minimizing fuel consumption and improving delivery times,” Kimball from TrueCommerce explains.

Subbiah from Uber Freight adds, “We've used AI-powered tools to eliminate an estimated four million empty miles from our network since 2023.”

Shipment Tracking

Another area for shippers where AI is instrumental is real-time tracking and visibility. “AI-powered systems enable shippers to track their shipments in real-time, offering transparency and enabling proactive management of potential delays or issues,” says Kimball from TrueCommerce.

Global Trade Intelligence

On a higher level, AI has the potential to deliver global trade intelligence, according to Wood from Descartes. “There are prototypes that would allow the user to ask in natural language for trend lines about what's been happening with specific commodities over a specific period, instead of having to navigate a reporting UI that might be problematic or have limitations. In some cases, you can ask for insights around what has changed or is notable during that period. You can learn things from the data that you weren't even asking, just by posing an open-ended question to the AI.”

These use cases are just a small sampling of the almost endless possibilities for AI across the global supply chain and logistics community.