Last-mile logistics is a complex and complicated facet of the business world that requires orchestrating many moving parts, meeting tight deadlines and addressing the needs of multiple stakeholders. In addition, several external factors — from weather to traffic to a lack of available parking — can disrupt the process.
To enhance efficiency and increase productivity, many last-mile logistics companies have been quick to take advantage of the benefits of artificial intelligence. Recent advancements in AI have sparked a revolution in the business world, inspiring businesses in every sector to explore its potential.
In many cases, AI is driving innovations that are reshaping industries and opening doors to new levels of profitability. Here are a few ways AI is being leveraged in the last-mile logistics space.
Last-mile logistics, from beginning to end, rides on smart decision-making. Gathering, transporting and delivering orders requires a constant stream of decisions related to drivers, routes and package priorities. The better the decision-making, the more profitable the company can be.
AI serves as a valuable ally in the decision-making process. It can process data exponentially faster than humans, making connections that in the past would have gone unnoticed, and giving businesses the power needed to truly become data-driven in their decision-making.
Route optimization is one of the primary areas where AI has been unleashed in the last-mile logistics sector to drive better decision-making. Every transaction conducted by last-mile logistics companies requires a routing decision. By optimizing each route, last-mile logistics companies gain efficiencies needed to boost profitability and growth.
AI-driven route optimization analyzes data from a number of key sources to identify the best delivery routes. It assesses data on customer preferences such as requested pickup or drop-off times, traffic conditions and weather to determine the most efficient way to get packages to their destination.
AI also plays a role in multi-stop optimization. This feature allows businesses to better coordinate multiple pickups and drop-offs, bundling deliveries together with maximum efficiency. AI’s speed and efficiency can manage multi-stop optimization even while deliveries are en route, alerting drivers to updates required to pick up new orders.
By integrating AI with transportation management systems, last-mile logistics companies can benefit from dynamic route optimization. If conditions change while drivers are en route, updates can be made in real time to ensure maximum efficiency is achieved. Auto accidents blocking traffic, for example, can be assessed and used to map out new routes that avoid lengthy delays.
Route optimization also allows last-mile logistics companies to improve their sustainability. More efficient routes mean delivery vehicles are on the road for less time, which saves fuel and decreases emissions.
Autonomous delivery vehicles are an emerging trend in the last-mile delivery space. These vehicles, which introduce a number of efficiencies to last-mile delivery, utilize AI to manage navigation and safety.
Increased reliability is one of the key benefits of AI-powered autonomous vehicles. Unlike their human counterparts, “AI drivers” don’t get sick, get distracted, take time off or have unprofessional exchanges with customers. They work 24/7 and, aside from the initial investment in the technology, work for free.
Autonomous vehicles are also better equipped to manage road hazards, because they are guided by cameras and sensors that provide 360-degree monitoring and can process all relevant data instantaneously to make needed adjustments. AI-driven vehicles also assess road data objectively, whereas human drivers can easily misinterpret risks due to subjectivity.
In dense urban areas, autonomous vehicles provide even more benefits to the last-mile logistics process. Because they don’t need to accommodate a human driver, autonomous vehicles can be smaller than conventional delivery vehicles, allowing them to take advantage of alternative travel paths, such as bike paths and sidewalks, to take more direct routes with less congestion. Some of the autonomous vehicles already in use are small enough to deliver packages directly to a customer’s door, which does away with delays that can occur while securing parking.
AI-powered automation in last-mile delivery is also being used to bring greater transparency to the delivery process. Delivery progress can be automatically provided to customers, with AI-powered systems providing updates on delivery times when necessary. Recent research shows customers desire high levels of transparency in the delivery process, with 91% actively tracking the status of their deliveries.
The challenges associated with last-mile logistics continue to increase, as growth in ecommerce drives greater delivery volumes and customer expectations demand greater speed and transparency. AI provides last-mile logistics companies with the tools needed to meet their evolving needs and remain profitable.
Anar Mammadov is the CEO of Senpex Technology. He is a software development professional with more than 18 years of experience in enterprise solutions and mobile app development. He has applied his practical and results-oriented approach to business to create Senpex Technology, a personalized logistics and delivery service that utilizes groundbreaking artificial intelligence to optimize routes and to provide the fastest, most efficient last-mile delivery resource for businesses. Senpex can be utilized 24/7, with no interruptions to your delivery needs.