Is the full potential of AI in Last Mile Logistics still untapped?


Artificial Intelligence (AI) is emerging as a transformative force, reshaping our daily lives and the way companies approach their business models. While the concept of AI may generate different thoughts and has generated numerous rumors about completely altering our lives, and in some cases, even replacing human capabilities, a reality check is essential.

If we apply these considerations to the logistics industry, specifically examining the delivery process from the first to the last mile, we must place AI within the broader context of the innovation process that shippers, carriers, and postal services should start embracing. AI should be considered as one of the technology elements available among others that is influencing the entire delivery journey, rather than the sole factor.

When addressing the need to enhance what is often perceived as the most complex and costly segment of the supply chain, innovation becomes paramount, and AI can certainly help reach these goals.

Traditional approaches have struggled to efficiently navigate the challenges posed by urban environments, unreliable delivery windows, and the need for cost-effective operations managing in most cases inefficient last-mile logistics resulting in increased operational costs, delayed deliveries, and a potential negative impact on customer satisfaction.

The introduction of  AI within the innovation plans of a business could eliminate these struggles and help improve operational efficiency with a direct impact on cost savings and customer experience.

So what can AI actually do for the Last Mile? 

AI-powered predictive analytics enables companies to anticipate demand patterns and optimize delivery schedules. By analyzing historical data, AI can predict peak demand times and locations, allowing for better resource allocation and delivery efficiency.

To optimize routes, AI algorithms analyze real-time traffic conditions, weather forecasts, and historical delivery data. By considering various factors, AI helps logistics companies identify the most efficient routes, ultimately reducing delivery times and fuel consumption.

AI allows for dynamic routing adjustments based on real-time factors such as traffic updates, road closures, or unexpected delays. This adaptability ensures that delivery routes remain optimized, even in the face of unforeseen challenges.

Beyond operational efficiency, AI contributes to an improved customer experience by providing real-time updates, accurate delivery estimates, and personalized services. 

How can all this be achieved? 

AI has great potential but cannot do everything. At the moment, we often see that AI is used for isolated tasks, but the real game changer will come only when AI is integrated with other useful data in a comprehensive platform that can efficiently manage the whole delivery process. 

This is how the Milkman Platform consistently and dynamically incorporates logistics information transforming them into logistics instructions through automation and AI. The data collected during each phase of the supply chain such as failed deliveries, the most favorable and unfavorable times for deliveries, and customer preferences, are some examples of the data that are captured and analyzed to enhance the overall efficiency of the delivery process.

The information gathered is utilized in the planning phase to refine Service Level Agreements (SLAs) by geographic area and in the execution phase, optimizing the line haul, and enhancing the overall customer experience during every journey.

Furthermore, the platform can seamlessly communicate with other systems and leverage AI to share optimal rules and procedures for all the different steps involved.

This kind of integration of AI in last-mile logistics cannot be ignored anymore and can bring important improvements to the entire supply chain, making the last mile faster, more reliable, and even simpler. Discover more, talk to our experts, contact us here.

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