Digital logistics: Machine Learning in Logistics – Examples & Main Use Cases

Machine Learning in logistics examples shown as trucks cross a bridge
Machine Learning and AI are taking over more and more industries and aspects of our lives, and logistics is no exception. When it comes to the supply chain, AI and machine learning can be extremely beneficial. It is possible to use them to optimize processes, avoid mistakes that humans can make or miss, and predict future opportunities and challenges. A computer vision model can identify items in its environment with the help of image and video annotation and may then interact with those objects or avoid them as needed. This technology has the potential to enhance safety on the production line substantially and boost manufacturing productivity. This article explores top Machine Learning use cases in logistics, its benefits, and how they improve logistics processes. Let’s dive in:

What is Machine Learning

Machine learning is a subset of artificial intelligence that allows a system to understand and leverage data for better model performance without being particularly designed to do so. Machine learning algorithms use historical data as input to foresee new output values. They are trained to make classifications or predictions using statistical methods, revealing key insights.

The Role of Machine Learning in Logistics

Machine Learning in logistics examples shown as trucks cross a bridgePatterns in supply chain data are frequently discovered with the help of machine learning by relying on algorithms that can quickly pinpoint the most influential factors. Its algorithm and the logistics companies that use it can quickly analyze large, diverse data sets, improving demand forecasting accuracy. In the collaborative supply chain and logistics segment, machine learning helps to reduce freight costs, improve supplier delivery performance, and reduce supplier risk.

The digitization of logistic planning via machine learning can aid in predicting unforeseen circumstances, reducing the likelihood of misfortunes while delivering goods. In the logistics industry, machine learning replaces the complex steps of planning and scheduling, working with greater accuracy and efficiency and thus streamlining processes.

Benefits of Machine Learning in Logistics

As mentioned, there are numerous ways that machine learning can benefit logistics. When analyzed using algorithms, patterns in supply chain data frequently reveal the most influential factors in the operation. The entire process is just becoming efficient and profitable with machine learning solutions, and here is how:

Damage Detection

Damage detection during vehicle inspections in the logistics chain is a required procedure. Manual checks can be prone to errors. As a result, the logistics industry is rapidly transitioning to unmanned operations.

Companies benefit from an accurate shipping process thanks to AI-based automatic vehicle damage detection. Carriers use image processing to detect damage thanks to computer vision and AI algorithms. This object detection technique enables logistics companies to determine the extent of the damage. It can also tell you what kind of damage you have, and as a result, future losses can be avoided.

Drones in Delivery

Drones have transformed the logistics industry, particularly for pharmaceutical companies delivering products with short shelf life. Another important advantage of using drones in delivery is reduced costs. Drones are less expensive to buy and maintain than traditional modes of transportation for last-mile delivery. Furthermore, because they are battery-powered, there is no need for fuel. As they are also autonomous, labor costs are reduced as well.

Logistics companies are constantly looking for ways to reduce their carbon footprint to reduce fuel costs and combat climate change. They can drastically reduce their use of fossil fuels, save money, and help the environment by incorporating drones into the final stage of their supply chain.

Logistics Demand Forecasting

Artificial intelligence and machine learning are among the best ways to improve supply chain efficiency by predicting demand or improving demand forecasting. Logistics demand forecasting allows businesses to accurately predict demand for products and shipments throughout the supply chain, even in the face of uncontrollable conditions or circumstances. Based on previous experience, you will receive a detailed analysis of all the factors that may influence demand. Businesses can make better decisions by using this.

Logistics Route Optimization

ML provides numerous benefits to supply chain networks, including reduced transportation costs, improved supply efficiency, and risk reduction for suppliers. You can use AI to determine which routes are the best to minimize shipping costs and speed up the process. This is especially important for large e-commerce companies with a large customer base.

The technology can be used to track weather and road conditions and make recommendations for route optimization and driving time reduction. This allows lorries to be redirected at any time if a more optimal and profitable route becomes available.

Real-World Machine Learning Use Cases

Here are several examples of machine learning use cases that made their way into real-world applications.

Customer Service Chatbot

Throughout the customer journey, online chatbots are replacing human agents. They respond to frequently asked questions (FAQs) about shipping or provide personalized advice, such as cross-selling products or recommending sizes for users, altering how we think about customer engagement across websites and social media platforms. Messaging bots on e-commerce sites with virtual agents, messaging apps (like Slack and Facebook Messenger), and tasks typically performed by virtual assistants and voice assistants are only a few of the examples.

Chatbots can also analyze customer experiences and draw conclusions about how to improve them. Companies can now better understand and respond to their customers’ needs.

Computer Vision

This AI technology allows computers and systems to derive meaningful information from digital images, videos, and other visual inputs with the help of an annotation tool and then act on that information. This ability to make recommendations sets it apart from image recognition tasks. Computer vision also has applications in photo tagging in social media, radiology imaging in healthcare, and self-driving cars in the automotive industry.

Automation of Back-Office Tasks

Thanks to hyper-automation, businesses can now automate many back-office tasks. Artificial intelligence, process mining, robotic process automation, and other technologies can be used to achieve hyper-automation.

Here are some back-office tasks that can be automated with the help of machine learning.

  • Creating reports: Logistics companies can now automatically generate basic reports required to update managers and ensure that all employees are on the same page.
  • Monitoring and planning: Machine learning in logistics aids in the organization of cargo pipelines, creating transportation schedules, assigning employees to various tasks, and implementing package tracking in the warehouse.
  • Processing of e-mails: Process automation robots can examine the content of automatically generated reports and send relevant emails to stakeholders.

What Future to Expect with ML in Logistics

Because of the sudden and rapid growth of digitization and transformation, more and more businesses are incorporating AI and ML. According to a study, by 2023, at least 50% of all multinational companies in supply chain operations will be using AI and ML-related transformational technologies. This demonstrates ML’s growing popularity in the logistics industry.

According to another research, 61% of managers report cost savings, and 53% report increased sales due to implementing AI in their supply chains. Lower inventory prices, lower inventory costs, and lower transport and labor costs are some of the major areas where high-volume shippers can save money.

Simply put, AI and Machine Learning will enable business analysts to make informed and critical business decisions in the face of massive amounts of data.

Wrap up

Investing in machine learning may be the best decision one can make right now. AI is an unstoppable trend that will aid the modern world in finding better, more convenient solutions to our daily operations. Machine learning does contribute to the development of the logistics industry in so many ways, making management easier than ever before and allowing a business to scale faster while saving resources.


Daniel Mahnken
Daniel Mahnken is a Head of Corporate Communications at Saloodo!. As a qualified journalist, writing is practically in his blood. After studying sports journalism, he wanted to become Germany’s Next Sports Commentator, but then he discovered logistics and has been stuck with it ever since.

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