Generative AI in transportation management

Transportation management has never been an easy business. Volatility in freight rates, driver availability, and rapid economic changes in consumer demand make service and cost optimization a continual challenge for supply chain executives. Macro shocks, such as the COVID-19 pandemic, have only further complicated matters.¹

But the recent Generative Artificial Intelligence (GenAI) productivity shock, though no panacea, could indeed be transformative in enabling supply chain executives to create further efficiencies across the transportation life cycle. This blog entry will concentrate on how Generative AI can influence transportation logistics in the short to medium term. A future entry will address how AI can affect supply chain performance in the longer term—such as real-time optimization and arrival prioritization.

Short- to medium-term impact on transportation management

Generative AI can retrieve, parse, analyze, organize, and synthesize a range of disparate datasets, text, documents, and other readable/scannable content.

How do Generative AI’s capabilities apply to transportation management? Below, we outline the four key areas across the transportation management life cycle, where we anticipate the technology will make the greatest impact in the short and medium term.

Figure 1: Key areas where Generative AI can enable more streamlined transportation management

Click image to enlarge

1. Streamlined carrier onboarding: Given its ability to enable users to query unstructured datasets and receive structured and organized responses, Generative AI can revolutionize the carrier onboarding process by automating the verification of credentials, compliance checks, and performance evaluations. What’s more, we envision carrier onboarding encompassing not only standard insurance, safety, and compliance information, but also aggregated financial performance data, sustainability progress, real-time reputational information, and outstanding legal challenges. In short, GenAI can enable teams to quickly analyze volumes of data to identify high-performing carriers, streamline the onboarding process, and help ensure a network of reliability carrier partners.
2. Automation and instantaneous communication with carriers: AI-powered communication platforms can facilitate real-time collaboration between carriers and shippers. As Generative AI learns a particular system, we see a world where intelligent systems can learn the type of information carriers need during a load life cycle, how weather and traffic affect specific route changes—channels through which carriers prefer to communicate—and when communications need to occur. This aggregation of behavior and content—driven by artificial intelligence—will enable improvements in service levels and route optimization, as well as enhance overall supply chain visibility without the need for significant increases in operations staff or software development resources.
3. Comprehensive freight audit: AI-driven algorithms excel at processing vast datasets, making them ideal for comprehensive freight audits. Imagine auditing freight payables in real time. Such a system would be able to autonomously verify invoices, identify discrepancies, and ensure compliance with contractual agreements. In short, AI can facilitate real-time root-cause analysis, expedite resolution, and improve compliance with payment terms, thus enabling operations teams to minimize errors, reduce manual workload, and enhance accuracy in financial transactions.
4. Reporting: AI transforms data into actionable insights, offering sophisticated reporting capabilities. Instead of enlisting business intelligence (BI) developers to create and modify operational reports, a transportation or operations manager could simply tell the system to autogenerate desired reports—such as the on-time service metrics for January 2 or the number of tenders accepted by a specific group of carriers in the first six months of the year. From predictive analytics for demand forecasting to route optimization based on historical performance, AI will empower transportation leaders with valuable, bespoke, and real-time data.

Preparing for a future of AI-powered logistics

To summarize the above, in the short to medium term, increasing adoption of Generative AI will streamline and optimize a host of tasks across the transportation life cycle, from reducing the time to onboard new carriers, to simplifying the freight audit process. At a broader level, Generative AI will be the driver of the core transportation operations needed to achieve on-time service and customer service-level targets. This will, in turn, free up operations resources to focus on exceptions to normal operations, continuous improvement projects, and innovation.

In the long run, as Generative AI adoption becomes more widespread across transportation, one should prepare for a world where carriers are fully autonomous and operating on their own Generative AI engines. Simply put, one will likely need to prepare for a world of multiagent AI systems that all need to communicate with one another.

In such a future, one must design and develop Generative AI models keeping in mind how they will need to interact with other engines. For example, transportation managers will need to ensure their Generative AI models can communicate with the models deployed by both their customers and carriers, enabling a cohesive and intelligent transportation ecosystem.

By addressing these considerations, transportation organizations can pave the way for a future where Generative AI models speak the same (or similar) language. Indeed, as technical architects know, interface design is often one of the most important aspects of software implementation. Such a mindset will be crucial as AI adoption becomes more mainstream.
 

Authors:

Christian Riemann Managing Director Supply Chain Deloitte Consulting LLP criemann@deloitte.com	Steve Ostendorf Technical Fellow Supply Chain Deloitte Consulting LLP sostendorf@deloitte.com	Brad Umphres Specialist Leader Supply Chain Deloitte Consulting LLP bumphres@deloitte.com

Endnote:

 ¹ US International Trade Commission, The impact of the COVID-19 pandemic on freight transportation services and U.S. merchandise imports: COVID-19 disruptions in maritime shipping and air freight, 2020.