The Industrial Economy Is Greeting Generative AI With Open Arms

There is nothing simple about moving goods from point A to point B.

The logistics space is not only fundamental to the conveniences of modern life, critical for facilitating global trade, and foundational to international business, but it has also served as one of humanity’s most powerful economic growth engines throughout our civilization’s history.

A side effect of that historic prominence is a simultaneously entrenched and fragmentedly laborious way of doing things.

Now, prompted by the pandemic-driven and macroclimate-accelerated pain points and snarls of the past few years, many traditional and family-run shipping and logistics businesses are looking for smarter ways to operate.

Zvi Schreiber, CEO of trade tech solution Freightos, described to PYMNTS last month how the international freight market being a “largely offline endeavor” has resulted in “tens of billions of dollars of waste.”

That same offline, highly intermediated nature of global freight, Schreiber noted, has been a key factor in all the supply chain problems experienced in recent years.

Fortunately, even the most entrenched and traditionally manual industries are now wising up to the benefits of modern technology.

Read also: Shipping Industry Trade Group Calls for Digital and Standards to Fix Supply Chain Disruption

The Role of Automation and AI in the Industrial Economy

It is, and will always be, a physical and complicated process to move goods. There exist regulatory complications, foreign exchange (FX) crinkles, and pricing and route dynamics that can change with the literal wind. These questions are enormously complicated and can increasingly only be solved by the application of complex mathematics.

That’s why, over the last three to five years, the logistics business has become more and more digital, with shipping companies moving from Excel spreadsheets to online platforms and cargo companies providing application programming interface (API) integrations, spot rates and next-generation features like dynamic pricing.

“There’s legacy businesses, family businesses, old traditional companies that have now reached a point in the last two years where they understand that if they don’t take the next step, they will have troubles, they might even close, because they now need technology to provide the right level of service that their customers are looking for,” Raz Ronen, CEO at FreightTech startup Wisor.AI, said in a discussion with PYMNTS.

Critical business operations, including price setting, already rely on technical processes and tools that are steadily growing more digital and more efficient.

A next-generation cohort of business solutions are bringing to market solutions that layer artificial intelligence (AI) over those existing data flows to vastly improve the efficiency and impact of operational processes.

As AI technology matures and enterprise adoption becomes more widespread, it will increasingly assist businesses in proactively selling the right product or service to the right buyer, at the right time and for the right price, in such a way that it generates maximum revenue.

See also: Moving Freight Payments at Digital Speed Starts With Data

Taking Administrative Tasks out of the Process

PYMNTS research has found that the drive to modernize procurement systems and logistics and supply chain functions is happening across industries.

The changing logistics landscape and evolving expectations of enterprise customers means that businesses need to adapt to the new normal of seamlessly automated processes.

“We’re moving beyond the days in which emails, paper and even handwritten invoices have gummed up the works, and ultimately have kept payments (and thus goods) from getting where they needed to go,” Flexport Chief Financial Officer Kenny Wagers told PYMNTS in an earlier interview.

Still, Wagers noted that “many” vendors and freight forwarders in the industry have “antiquated” invoicing and billing systems in place.

Even some of the largest global companies don’t have standardized payment and invoicing processes within their own firms, as fragmentation among various regions with regard to electronic invoicing versus manual methods tends to be the rule, not the exception.

As modern solution providers seek to use machine learning algorithms to match shippers with carriers, fragmentation is emerging as a critical hurdle given that how the data is collected, disseminated and presented is historically siloed.

A promising sign is that, the Digital Container Shipping Association (DCSA), an Amsterdam-based nonprofit group founded by nine major ocean carriers including Maersk, MSC, ZIM and ONE, has committed to fully adopting a standards-based electronic bill of lading (eBL) by 2030 in an effort to streamline document handling and to promote interoperability across global supply chains.

“All these incredible transformations with cloud computing and the internet have helped us organize and disseminate information,” Pat Dillon, CFO at intelligent supply chain platform Flock Freight, told PYMNTS Thursday (April 6). “But now, that transformation is increasingly coming to the physical world of transportation, and we are really excited about the momentum.”

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