As the world rebalances after the chaos of COVID-19, U.S. e-commerce businesses are desperately seeking ways to beat supply chain challenges and claw back lost revenues. Many are turning to artificial intelligence (AI) to improve logistics efficiencies, meet customer expectations, and prepare for a less predictable future.
According to a recent KPMG survey, 53 percent of retail business leaders said the pandemic sped up their company’s AI adoption, with most AI investments going into customer intelligence, inventory management, and chatbots for customer service.
My view, however, is that cross-border e-commerce fulfillment operations are ripe for AI enhancement too. We’ve seen how large retailers like Walmart and Nike have benefited from robotics and automation in distribution centers, with AI-enhanced data analytics deployed to optimize operations across complex supply chains. Tech-savvy e-commerce players were well-positioned to not only weather the pandemic, but also to set the pace for the rapidly evolving e-commerce industry.
The Areas of the E-Commerce Supply Chain Where AI Makes a Difference
Smart devices and IoT in shipping
The use of the Internet of Things (IoT) in the U.S. e-commerce industry is expected to become more prevalent, particularly in logistics operations and for demand planning and forecasting. The key driver is the potential of data science. In shipping and logistics, the use of smart devices allows for previously impossible data gathering. Smart sensors at pallet level, GPS imaging in trucks, and augmented reality devices in warehouses give invaluable transparency to all kinds of logistics operations.
One example is Amazon.com's use of robots connected to the internet with QR code readers to roam warehouses and track inventory. This allows warehouse management teams to more accurately track the shipments on hand, spot problems early on, and guide orders ever more speedily to customers around the world.
AI-empowered freight optimization
Brands and retailers will benefit when AI is used for complex international route planning for the fastest and most cost-efficient transit of goods around the world. This will be extremely valuable for re-routing at short notice, when, for instance, disruptions and backlogs at seaports and airports can massively delay the movement of goods ordered by shoppers.
Congestion in ports around the world is causing big hikes in the cost of shipping, with equipment tied up both on land and at sea. Air freight capacity remains under pressure, which could affect holiday season e-commerce deliveries when international postage is required. In such instances, AI and data analytics can expedite decisions about routing and shipping pricing.
Sustainable fleet management
AI systems can be used to predict when it’s time for vehicle maintenance, and to analyze things like fuel usage, idle time and driver downtime. Tightly managed delivery vehicle fleets will help control costs and cause less harm to the environment.
By understanding carbon emissions per shipment, third-party logistics providers and their retail clients will have all the necessary data required for ESG reporting and will be able to deploy AI analytics to reduce miles driven and cut carbon impact. And as 5G connectivity rolls out globally, the potential of fleet management tracking is being realized.
Don’t Run Before You Can Walk
AI is a much-needed business salve, with the power to smooth out bumps in the distinctly turbulent e-commerce supply chain. However, adoption should be approached with caution. In its survey, KPMG found 49 percent of retail business leaders believe AI adoption is moving faster than it should in their industry. Concerns relate to the need to upgrade legacy systems, achieve process standardization, and work with accurate, secure data across systems, before benefits can truly kick in.
I’m confident that return on investment from AI and smart data analytics in e-commerce fulfillment is within our grasp, so long as we think carefully about people, process and data security before making the leap.
Douglas Longobardi is executive president, sales, Asendia USA, a company that empowers businesses to grow across borders with international e-commerce, e-PAQ and mail delivery, tracking and fulfilment solutions.
Doug Longobardi is the Executive Vice President, Sales and e-commerce expert at Asendia USA, joining the company when it acquired Globegistics. Asendia is one of the world's leaders in international e-commerce and mail, delivering parcels and documents to more than 220 destinations across the globe. Prior to devoting his expertise to Asendia USA, Doug was the Executive Vice President and Partner of Globegistics, a global e-commerce and mail solutions company he co-founded in 2011 and helped grow from nothing to $75 million in sales. Doug has over 25 years of postal, courier, and global distribution experience. He is a hard-working goal setter with a contagiously positive attitude and a passion for developing new solutions for the global e-commerce market. Doug recognizes the importance of immersing himself in the industry to gain a firm understanding of all aspects of his company’s business. This well-rounded mindset and a wealth of industry knowledge give Doug a unique perspective on what etailers need to grow their businesses globally and ultimately offer a better customer experience for shoppers.