Preemptive logistics allows goods to be transported ahead of time, possibly at lower speeds © Zhai Huiyong/VCG via Getty Images
Preemptive logistics allows goods to be transported ahead of time, possibly at lower speeds © Zhai Huiyong/VCG via Getty Images

Why three-fifths of logistics firms are turning to AI

19 August 2020

More than three-fifths of logistics companies are planning to use AI and data analysis to match logistics needs with capacity in the next three to five years, according to a survey.

An Ericsson survey of around 1,923 logistics professionals from China, Germany, Sweden and the US, including 667 in decision-making roles, found 64% of companies will ship preemptively in the next three to five years.

To achieve this 67% of the decision-makers said their business needed to be part of broader logistics information-sharing systems to ensure they had the visibility required to send the right type and quantity of goods to a client before they've been ordered. A fifth (19%) said they were already doing this to some extent.

Ericsson described the phenomenon as “preemptive logistics” and said it did not mean the death of warehouses and fulfilment centres, but more reliance on cross-competitor information sharing, collaboration and shared warehousing.

Almost 40% of logistics companies considered the lack of good digital track and trace tools and tools for visualisation and reliable mobile connectivity to be key barriers.

Three out of five said they strongly agreed that better logistics tools would improve their companies’ ability to deliver on time.

Around one-third of respondents described the inability to quickly share accurate information between customers and suppliers as a “roadblock” for their business and said disruption from the coronavirus pandemic had amplified that challenge.

Two-thirds (67%) of decision-makers believed that customer sustainability requirements will change the way their companies handle logistics over the next three to five years.

Respondents believed preemptive logistics will be driven by sustainability, self-driving vehicles, electrification and sharing.

“Without drivers or other staff, transport vehicles including planes and ships could be constructed very differently and be operated in new ways,” said the report.

“Transport design will be continuously optimised for the new conditions and goals that sustainable, driverless transports, with fewer time constraints to reach their destination, will mean.”

With preemptive logistics, transportation could take place ahead of time and perhaps at even lower speeds, facilitated by new driverless electric vehicles.

Meanwhile, Logistics UK (formerly the Freight Transport Association) has called on industry and government to have a shared vision of the supply chain to be ready for Brexit and the economic recovery from the pandemic.

David Wells, CEO of Logistics UK said: “Britain is emerging from the Covid-19 outbreak into a different political, social and economic climate. Now, more than ever, we need to ensure that government acts to unleash the potential of the logistics sector.

“While indicators for road connectivity and liner shipping have improved in recent years, the markers for quality of roads, efficiency of air transport, train and seaport services have decreased noticeably, making it clear that government must increase its investment into infrastructure to boost the international competitiveness of the UK.”

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