AI automation primed to go mainstream in logistics industry

Cross-border e-commerce between China and Europe has recovered to new heights of activity since the pandemic. Events such as the China-Europe Cross Border E-Commerce Forum, to be held in late March in Manchester, England, are spurring on trade innovation across multinational markets.

Set for March 26 and 27, the event is in its third year and is one of the largest of its kind. It will bring together a mix of e-commerce platforms, logistics companies and government agencies, to share ideas on trade for a post-COVID world. Artificial Intelligence, or AI, automation of warehouse fulfilment is an example of one development that is stirring a buzz ahead of the event and across the industry as a whole.

As the likes of Amazon and Alibaba lead the movement toward using autonomous robots in supply chains, advances in warehouse robotics have led to a watershed moment, with the logistics industry gearing up for widespread adoption.

Challenges in finding suitable workers, alongside the rising cost of labor, means that fulfilment centers have been under extreme pressure to find solutions to meet the boom in home delivery demand.

AI technology is helping to overcome the challenges. Fleets of robots are equipped with sensors to avoid collisions, process packages, and avoid traffic congestion.

Use of AI applications in warehouses goes beyond just robots. Throughout distribution centers, machine learning, natural language programming and computer software are all being revolutionized by AI.

Dynamic slotting, for example, is a process where machine learning is used to optimize products and product location in a center. Traditional slotting requires manual warehouse mapping and data collection, however AI based software can create optimal layouts, responding to changing conditions in real time, to get things where they are needed as fast as possible.

AI can be combined with the human body too, to form wearable warehouse technology. Natural language processing means that voice-picking can allow workers to free up their hands and improve safety. Smart glasses can also contain cameras, which AI can use to instantly recognize barcodes, items, and even nuanced situations such as how full a container is.

Despite the powerful influence of AI in warehouse logistics, the MHI Annual Industry report last year stated that just 14 percent of respondents currently use the technology in some form. However, it is the top minority of players controlling a dominant share of the industry that are predominantly adopting the technology. As AI becomes more mainstream in the sector, and prices fall, adoption will likely spread as logistical solutions, previously reserved for the likes of Alibaba and Amazon, become more accessible. It is estimated that this 14 percent will balloon to 73 percent by 2027.

Supply chains and logistics work are the blood circulation for the global consumer market. They are the arteries and capillaries of an unbelievably complex system that works so precisely it can deliver a product to your doorstep within hours.

China-Europe trade is increasingly important, given the uncertainty in many economies. There is not a single industry that supply-chain innovation does not benefit.

Barry He is London-based columnist for China Daily.