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Cut Shipping Costs with AI-Driven Logistics Management: Here's How
E-commerce profitability often faces the fire due to rising shipping costs. Nowadays, it isn’t just about getting goods from warehouses to the customer; it’s about finding more affordable and efficient options to do so. According to a report by Analyzify, 48% of online customers abandon their shopping carts due to additional shipping costs. Also, brands invest in expensive standalone systems to manage each aspect of their shipping operations, but lose both money and customers.
With AI-powered logistics management, businesses can minimize costs and offer intelligent shipping solutions. They can improve delivery accuracy, automate carrier allocation, manage returns, and stay above their competitors in the industry. Here’s how you can adopt AI-driven logistics solutions for your brand and fast-forward your shipping operations.
What is AI-driven logistics Management?
AI-driven logistics management is the process of streamlining logistics operations with artificial intelligence technology. The technology replaces static rule-based processes and analyzes vast amounts of data to help businesses make smarter decisions.
Here are a few irreplaceable things AI does for you in logistics.
- Detect incorrect addresses and patterns that may indicate errors in future orders with AI
- Optimize routes and cut through traffic with algorithm-based route selection.
- Predict sales and forecast demand with AI-driven predictive analytics
- Manage warehouse operations with AI-powered solutions such as drones and robots.
How Major Companies Change Their Logistics with AI
From small businesses to large enterprises, AI has shown real potential in transforming logistics for several companies.
Here goes the list -
- Amazon uses over 520,000 AI-enabled robots under its warehouse robotics program.
- DHL has used AI to enhance prediction accuracy by 95%.
- With AI-driven predictive analytics, Maersk has reduced its downtime to 30%.
- Walmart reduced inventory costs by $ 1.5 billion annually with AI-powered inventory management systems.
Key Areas Where Logistics Automation Boosts Operational Efficiency
To understand the role of AI in logistics, brands must be aware of the critical areas where logistics automation boosts operational efficiency. Here’s how AI eases logistics journeys and impacts each component in shipping.
1. Carrier Allocation
Brands assign carriers based on factors such as transit times, cost, capacity, and service level agreements to maintain an optimal flow in their shipping. Allocating carriers manually by determining these can take time, leading to slower delivery times, errors, and higher costs.
To make deliveries faster and handle bulk orders without issues, brands have adopted logistics automation and upgraded carrier allocation systems with AI-first algorithms that can streamline the carrier selection process.
For example, the AI-enabled allocation system considers package details, customer preferences, and delivery location to pick the best-performing carrier. It ensures that the order matches with the shipping partners, based on cost, speed, and real-time location.
2. Route Optimization
One of the most crucial aspects of shipping is planning and optimizing shipping routes. It enhances delivery operations by selecting the fastest and most cost-effective way to reach the customer’s location.
A route optimization software has various technologies and analyzes multiple variables to derive optimal routes. It comes with GPS tracking, mapping, and includes real-time traffic data, allowing dispatchers to find flexible routes.
Route Optimization also includes scheduling and dispatching, wherein businesses can consider the delivery person’s shifts, breaks, and training to create dynamic schedules for maximum efficiency. For example, a waste management company can plan its routes efficiently to reach multiple collection points fast and save big on fuel consumption.
3. Air Waybill Generation
An Air waybill serves as proof of ownership for a shipment. Brands generate numerous air waybills for large volumes of orders by automating the air waybill generation process. The automation process involves electronic data interchange, barcoding, cloud-based systems, and mobile technology.
Businesses choose waybill automation solutions based on their integration capabilities, cost-effectiveness, and scalability factors. By automatically generating air waybills, brands speed up the order dispatch process with secure identification.
4. Warehouse Automation
Automation has revolutionized warehouse operations by ruling out traditional systems in warehouses. By streamlining picking and packing, inventory management, and stock maintenance, it streamlines the entire order fulfillment process.Today, warehouse operations are boosted by AI, robotics, and IoT, replacing manual workload.
Smart warehousing makes shipping easy by eliminating human errors, and optimizes spaces to maintain optimal storage capacities. It uses drones and robots to move and manage goods within a warehouse. Warehouse automation is a practical investment for brands, upgrading their logistics. Its results include cost reduction, error-free results, and overall efficiency in logistics.
5. End-to-end Shipment Tracking
Visibility is a key attribute in shipping, and it makes a significant difference when it gets the AI boost. End-to-end shipment tracking refers to real-time tracking, movement coordination, and monitoring within logistics operations.
Shipment tracking also includes predictive analytics to help brands take informed decisions before stockouts. A shipment tracking system with RFID and GPS solutions retrieves up-to-minute information of the driver’s whereabouts and systematically conveys predicted delays.
It integrates with various ERP and TMS systems, giving a comprehensive view of the entire supply chain from start to finish. AI-first tracking can also identify bottlenecks and key inefficiencies, helping you cut costs and gain greater transparency over shipments.
6. Order Cancellation
Once the order is placed, there’s always a chance that it might get cancelled. Businesses are familiar with order cancellations, but they often fail to handle these requests manually. Manual order cancellations take more time, and mistakes are common while processing bulk cancelled orders.
This leads to delays in the refund process, frustrating both customers and the business. Implementing automated order cancellations can streamline the entire process and reduce inefficiencies, preventing unwanted fulfilments.
It speeds up the refund process and synchronizes all systems with updated cancelled order statuses. A Logistics software, driven by artificial intelligence, can offer dashboards to submit and view cancellation requests. Customers can also receive instant notifications of cancellations and track them in real-time.
7. NDR Management
NDR or non-delivery report is a critical message containing the reason for an unsuccessful delivery. It is generated by the logistics partner upon the event of a delivery failure. Handling failed deliveries proactively with reattempts and communication prevents return-to-order situations.
With AI at hand, NDR management has become seamless, accurate, and faster. Businesses can now offer convenient time slots for redelivery, send automated reminders before attempting delivery, and track deliveries in real time. They can deploy AI-enabled NDR bots to interact with customers and offer optimized delivery routes, ensuring packages are delivered more efficiently.
8. Returns Management
Returns are missed opportunities when they’re stressful for both customers and businesses. In the past, returns were manually handled and dependent on human intervention, resulting in delays and customer distress.
After AI entered logistics, returns management shifted from complicated reverse logistics processes to streamlined return journeys. Now, it provides data-driven decisions, automated quality checks and rerouting, and quick turnaround times to keep customers satisfied.
With AI-driven data, brands can quickly make critical decisions, including refurbishing, recycling, donating, liquidating, and restocking of items based on the condition of the returned item. Merchants also offer self-serve returns portals for customers to place returns requests and follow up with the reverse journeys at their convenience.
9. EDD Prediction
EDD or estimated delivery date
is the promised date of delivery displayed to customers before they check out or look at a product. EDDs are predicted based on several factors such as shipment type, inventory level, carrier performance, order processing time, serviceability, and seasonal factors.
Before AI, EDDs were manually calculated based on these factors, but mostly resulted in miscalculations. Today, AI makes all the difference in EDD predictions, making them more accurate.
With AI-powered EDDs, you can track inventory levels, get information about carrier performances, destination-specific transit timelines, and constantly improve algorithms based on historical data. This helps meet customer expectations and increases retention rates.
10. Demand Forecasting
Demand forecasting is the process of predicting how full or empty your inventory will be in the future, based on the order data collected from customers. When this is done manually, it leads to unpredictability, overstocking, and understocking.
Artificial intelligence boosts demand forecasting by predictive sales and generating forecasts based on AI-driven data. It considers factors like weather, demographics, similar product performances, social media reviews, and customer feedback.
For example, AI demand prediction systems can help anticipate faster stockouts of bestsellers and specialty products and optimize the flow of these goods to meet customer demands without running out of stock.
Cut Shipping Costs and Delays with ClickPost Automation
ClickPost is a SaaS logistics intelligence platform that provides automated logistics solutions to simplify ecommerce supply chain operations. It offers API-based and AI-powered solutions to cut costs and minimize shipping delays for medium and large enterprises.
With real-time tracking, order manifestation, label generation, NDR management, Returns management, EDDs, and predictive analytics, it helps brands offer shipping experience like no other.
The logistics software provider has 500+ pre-integrated carriers, and merchants can go live within 24 hours. ClickPost is also connected with leading WMS, ERP, and OMS platforms. It provides 30+ communication gateways to send notifications via multiple channels. ClickPost’s services are operational in over 30 nations worldwide.
Final word
Artificial Intelligence is a necessity in modern logistics management. It has helped countless supply chain companies deliver technology-first solutions to businesses across several industries. Looking ahead, AI will continue to make goods storage, transportation, and delivery more intelligent and cost-efficient.