Tuesday October 15, 2019

AI and automation will transform e-logistics, experts say

Achim Himmelreich (left), André Pharand (centre) and Shana Laurie de Hernandez (2nd from right) discuss AI in logistics at Deliver 2019
Achim Himmelreich (left), André Pharand (centre) and Shana Laurie de Hernandez (2nd from right) discuss AI in logistics at Deliver 2019

Artificial intelligence, automation and other technologies will become increasingly fundamental to e-commerce logistics to tackle challenges such as labour shortages, rising costs and environmental restrictions, according to industry experts at this week’s Deliver 2019 event.

Warehouse and delivery robots, self-driving vehicles and drones were just some of the technologies presented as potential solutions to these challenges by diverse speakers at the two-day event at Estoril, near Lisbon, Portugal, which attracted about 1,000 participants.

André Pharand, Accenture’s Global MD Post & Parcel, explained in the first plenary session that e-retailers, led by Amazon, are moving inventory closer to consumers at a regional or local level in order to offer faster deliveries. “Consumers want orders fast and free. The trend is going towards same-day,” he said. “AI offers lower costs for same-day last-mile delivery. There could be a 30-35% reduction in costs for parcel delivery,” he estimated.

Achim Himmelreich, global head of client engagement at Capgemini, who spoke on AI in retail operations, agreed, saying that AI in logistics “could save big money”.

Shana Laurie de Hernandez, a partner and Europe Retail Leader at consultants PwC, told CEP-Research: “Many of our clients are facing similar challenges in logistics and delivery. Customers are becoming more and more demanding, and they need to respond.”

However, in addition to well-known issues such as costs and labour issues, companies also faced regulatory restrictions making traditional deliveries in cities such as Amsterdam, she pointed out. “The challenge for logistics players will be with sustainability, and for large players how to provide solutions at scale,” she commented.

“Sustainability will become more of a requirement from the public or regulators, and sooner rather than later. Big companies should look at partnering with start-ups for a full solution from the retailer through to the customer. Being open to these solutions is very important,” she underlined.

Alibaba Group is one of the pioneers in developing technology-based logistics and delivery solutions. Chunhui Zhang, head of logistics R&D, showed how the Chinese group is using AI in autonomous trucks to transport goods between warehouses, in delivery vehicles in cities and on university campuses, and now also with a delivery drone.

Zhiyong Liu, founder and CEO of Zhen Robotics, said the company’s robots have so far made more than 50,000 deliveries for several companies, including major retailer Suning in Chinese cities. “Package volumes in China are increasing very fast and requirements are changing a lot. In future, the shortage of delivery workers will be a big problem, so there will be a big opportunity for China to have delivery robots,” he explained.

Similarly, Daniel Buczkowski, Uber Freight’s head of European expansion, highlighted diverse challenges for freight transportation in Europe, including a large number of older drivers who will retire in the next few years and inefficiencies such as 20% empty truck journeys.

Uber Freight aims to transform the continent’s trucking industry by creating a digital marketplace for shippers and truckers, and has now gone live in Europe with its first deliveries for Heineken, he told the conference proudly.

Petra Becker, VP Supply Chain for German automotive supplier Continental, predicted that fully-autonomous vehicles will come in the future but cautioned: “Safety will be the most important thing. We have to have zero accidents. If we have that, then it will be very fast.”

James Rebours, supply chain innovation director for French e-commerce leader Cdiscount, explained how the company was successfully using warehouse picking robots developed by start-up partners. Warehouse staff were actively involved in projects to gain their input for improvements in working conditions, he emphasised.


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