Artificial Intelligence May Hold the Secret to Supercharging the World’s Logistics Business

Stock market volatility has sent investors on a dizzying spin of late, caused in large part by concerns over the current global trade environment. However, if there's any silver lining on the horizon, it's that the quiet technological revolution taking over the logistics industry could counteract the potential effects of rising tariffs on the global economy. This change is being led by solutions providers such as Descartes Systems (TSX:DSG) (NASDAQ:DSGX), Drone Delivery Canada Corp. (TSXV:FLT) (OTC:TAKOF), USA Truck, Inc. (NASDAQ:USAK), Marten Transport Ltd. (NASDAQ:MRTN) and LiteLink Technologies (CSE:LLT), all of whom sit on the leading edge of innovative supply chain offerings.

New logistics technologies are widely expected to increase global trade and prop up global economies, since up to one-fifth of logistics expenses are tied up in the cost of processing paperwork, according to the World Economic Forum. One astonishing assertion is that eliminating all this administrative paperwork could actually do more to boost trade than doing away with tariffs altogether. Yet this is precisely what the next generation of the logistics industry promises to do—that is, cut supply chain and administrative costs, quickly identify bottlenecks, automate deliveries and increase end-to-end transparency through a combination of distributed ledger technology, automation and crucially, artificial intelligence.

One promising player that could break through the clutter is LiteLink Technologies (CSE:LLT) with their 1Shift platform. Powered by artificial intelligence and distributed ledger technologies, the 1Shift platform allows for real-time end-to-end transparency and tracking throughout the entire supply chain. Platforms like 1Shift propose to reduce inefficiencies and costs by 30%, ultimately digitizing a paper-reliant industry in a way that primes players for exponential growth.

On-demand trucking is the future

Take the trucking industry, for instance, which stands out as a prime candidate for digital disruption. Currently, North America's supply chain is complex with a highly fragmented trucking industry. Over 517,000 trucking companies operate in North America, and up to 40% of trucks sit idle at any given time. And of all the miles driven by U.S. truckers, 5-25% are with empty vehicles. Even when trucks do have cargo they are underutilized 36% of the time, all of which translates to high levels of unused cargo capacity. Meanwhile, bills of lading tend to be handled manually, resulting in routine mistakes, delays and slow processing times, as well as higher costs. Rising costs such as gas and fuel, parcel, air freight and storage, and road and rail transportation are now having a profound impact on mid-market shippers.

That's why a number of tech startups in the logistics industry are now aiming to trim these inefficiencies by fashioning themselves as the "Uber of Trucking", in a bid to serve as a universal dispatcher for all trucks, which would enable companies to move their cargo from Point A to Point B in the fastest and most cost-efficient method possible. Their offerings have invariably attracted scores of investors. This year, Convoy, an on-demand trucking app, raised $185-million in a funding round, while freight-matching startup Cargomatic Inc. raised $35-million.

LiteLink Technologies' (CSE:LLT) 1Shift platform, which recently raised $14.9-million CAD in a non-brokered private placement, has emerged as one of the only supply chain platforms currently with the capacity to digitally connect all stakeholders in real-time while relying heavily on AI to grease the wheels. Truckers quickly find new loads (jobs) within this marketplace, reducing downtime and the potential for empty vehicles. There's evidence that such an approach is starting to gain traction, with 1Shift recently attracting Inline Nurseries (2010) Inc. as its first pilot program trial customer in the lead-up to a full commercial launch in March 2019.

Addressing the needs of each stakeholder

One key advantage of AI-powered platforms such as LiteLink Technologies' (CSE:LLT) 1Shift platform is their capacity to effectively digitize supply chain systems so that the resulting data can be used to drive cost efficiencies and faster delivery times. With the data points it captures, the artificial intelligence engine can optimize loads, authenticate documents and offer real-time information to ensure that the most efficient routes are chosen. Truckers can then follow these optimized routes and travel information to speed up delivery and avoid fines and disputes that have become a recurring issue in the industry. 1Shift also combats trucker attrition and builds loyalty through an incentive program that rewards truckers for service quality, timeliness and activity on the platform.

The benefits of these shared platforms extend far beyond truckers as it aims to create digital trust and predictive management between all stakeholders, including shippers, carriers and brokers while preserving decades-long business relationships. For shippers and receivers, 1Shift eliminates the need for them to source the drivers themselves, making the movement of freight as easy as pushing a button. Through intuitive GPS integration, their freight is digitized and tracked on the platform so they can follow its progress through real-time data from shipments and transactions, reducing paperwork, human error and the potential for disputes. This can also allow smaller enterprises to scale their distribution networks much faster, lowering the barriers that had previously restricted supply chains to one region of the industry.

Third-party logistics providers (3PL) benefit from a marketplace that shows vetted carriers with transparent track records, allowing them to make informed decisions over who handles their goods. Processing is also carried out through digital bills of lading that are analyzed through AI and biometrics, reducing the potential for human error during goods transfers, while allowing operators to move onto their next job quickly and efficiently.

Technology solutions quickly becoming the norm

Descartes Systems (TSX:DSG) (NASDAQ:DSGX), a logistics solutions company, has also been busy revamping operations to address some of the issues that now trouble the logistics industry. They're now in the process of rolling out dedicated platforms that can help logistics companies overcome current bottlenecks in the system. Their platforms include routing, mobile, telematics, transportation management, customs and regulatory compliance, global logistics network services, as well as broker and forwarding systems.

Another clearcut set of technologies that can speed deliveries and reduce overall costs are drones, robotics and automation. This year, China's online retailer became the world's first company to make commercial deliveries by fixed-wing drones, with Amazon and Alibaba promising to roll out their own fleet in short order.

That's why more traditional retailers such as office supply giant Staples have recently announced that it would be collaborating with firms like Vaughn, Ont.-based Drone Delivery Canada Corp (TSX.V:FLT) (OTC:TAKOF) to develop, implement and commercialize a drone delivery service. Drone Delivery Canada is currently developing their platform to offer drone delivery services that can help offset rising fuel prices and bypass congested roadways. And while leading players in the logistics space such as capacity solutions provider USA Truck Inc. (NASDAQ:USAK) and temperature-sensitive truckload carrier Martin Transport, Ltd. (NASDAQ:MRTN) have focused on providing logistics solutions, adopting the latest iterations in digital innovations could potentially amplify their efforts by several orders of magnitude.

While assessing the many technologies promising to transform the logistics industry can be time-consuming, it's clear the future of global supply chains is digitization, with its ability to provide a transparent real-time data system for all stakeholders to track. But it's in real-time AI optimization where digitized supply chains show their real potential. At the moment, 1Shift is one platform that employs AI technology to allow for the employment of smart real-time decision-making to save time and money, while offering a key edge over competitors.

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