“Artificial intelligence” usually conjures up images of humanoid robots, but AI is one of several digital technologies that are being applied to the supply chain. With the digital revolution in full swing, companies across the electronics supply chain are harnessing data to improve efficiencies and cut costs.
In the logistics segment, for example, freight companies are using AI and machine learning to better manage their assets. Although carriers are already using technology to track shipments, knowing where a container is doesn’t necessarily improve efficiencies. Knowing where it should be does.
“Predictive analytics can help supply chain executives make better decisions regarding asset allocation and management,” said Adam Compain, CEO of predictive analytics company ClearMetal. “There’s a core difference between visibility and monitoring and prediction and being proactive.”
Built by engineers and data scientists from Stanford University, Google, and Silicon Valley, ClearMetal’s Predictive Intelligence Platform leverages the cloud, artificial intelligence, and a proprietary network simulation engine to predict container, vessel, and shipper needs with a high level of accuracy. The platform collects granular data across a supply chain network and runs “what if” scenarios against that data. The results can help freight companies make informed decisions about their physical assets.
If data shows, for example, that shipments bound for Long Beach, CA are often diverted to Seattle, freight companies can redeploy assets to offload cargo in Seattle. Analytics can also help determine the optimal number and placement of containers based on the inventory that’s being shipped. “A company may think they need 150 containers to manage a job,” Compain explains. “The data may show they only need 100. And it may turn out that those containers shouldn’t be in China; they should be in North America.”
The ClearMetal platform:
- Simulates all global container activity millions of times to understand all possible outcomes and contingencies at the container and vessel level
- Refactors scenarios on-the-fly as new event data is ingested and predicted
- Leverages the cloud, big data, and parallel computing to process millions of calculations per minute
- Dynamically and automatically updates forecasts as new patterns emerge, providing comprehensive evaluation in real-time
- Generates formula-free forecasts from data predictions, allowing for the highest level of granularity
- Provides highly precise forecasts up to 8 weeks into the future at the daily and facility level, empowering actionable and accurate decision
- Automatically ingests liner data and up to 17 third-party signals such as commodity trends and currency rate to learn in real-time and mine historical patterns
- Maps complex relationships between all sources of uncertainty, capturing correlations imperceptible to the human brain and existing software solutions
- Tracks shipping events for every container and vessel at the daily and facility level
Compain admits that artificial intelligence and machine learning are uncommon terms in the supply chain, but “we’ve been able to see the impact machine learning could have,” he said. Freight companies currently rely on past customer behavior to determine how and when to ship whereas AI can help anticipate customer needs. “Carriers and shippers are excited to use the next wave of technology,” Compain said. “The data is already there. They can see how artificial intelligence can be applied more proactively to move from visibility to prediction.”
According to ClearMetal its platform can improve forecasting accuracy by between 30 percent and 60 percent and pushes visibility out from two weeks to eight.
Clear Metal’s solutions are cloud-based and operate on a subscription model to make them accessible to companies of all sizes. “It’s finally possible to take leading-edge technology and apply it daily operations,” Compain said.
A recent survey by eft confirms that the logistics industry is increasingly embracing technology. Investments in business intelligence and predictive analytics in particular have grown in importance in the logistics as digital transformation spreads. While 93 percent of the 356 supply chain executives surveyed said technology was a key differentiator, many are still reluctant to adopt new technology. The report finds that 15 percent of respondents are very open to adopting new technologies while 78 percent are “somewhat open.”
Freight companies are also taking advantage of the digital marketplace. Freightos, a logistics technology provider, has launched an online marketplace for international freight. The site provides instant comparison, booking, and management of freight services from multiple logistics providers.
To date, the company said, the freight industry has been reminiscent of the travel industry in the 1970s: siloed information, lack of pricing transparency, and obsolete analog documentation, resulting in importers often having to wait days for a single freight quote and overpaying by as much as 40 percent. For the small and midsized businesses that make up 97 percent of U.S. importers, these waiting periods and inflated prices significantly limit potential for growth.
“The logistics industry is the backbone of global trade. At $4 trillion it accounts for about 10 percent of the world’s GDP. But this foundation of the international economy is slow, opaque, and offline,” said Zvi Schreiber, CEO and founder of Freightos, in a statement. “Over the last four years, Freightos has brought some of the world’s largest logistics providers around online. Today we are thrilled to launch the world’s first online marketplace, which will make shipping goods as easy as booking a flight online.”
Prior to this launch, Freightos automated millions of freight price quotes for some of the world’s largest freight forwarders including Nippon Express, Hellmann Worldwide Logistics, and CEVA Logistics, as well as massive supply chain companies including Sysco Foods, Panasonic USA, and Marks & Spencer. The same routing and pricing technology now powers the Freightos Marketplace giving SME importers and retailers the ability to compare, book, and manage freight rates in real-time. Initially the Freightos Marketplace is focused on U.S. imports from China, by air and ocean.
“Booking a flight has been electronic for 50 years, but the cargo on airplanes, trucks, and ships is still booked manually. This cannot continue,” said Robert Mylod, investor and director of Freightos. “Growing global trade, e-commerce B2B sales, and sprawling dynamic supply chains demand the transparency and efficiency of online freight. Just like passenger travel went online to accommodate the demands of a growing market, Freightos is finally ushering in a much needed digital marketplace for freight.”