The Shocking Truth About Artificial Intelligence and Ocean Freight

The Shocking Truth About Artificial Intelligence and Ocean Freight

By now, we’ve all heard stories about how we’re on the brink of a new age of “Artificial Intelligence -- or “AI.” AI is different from other types of technology. Most tech we use every day (like email or an iPhone) perform certain tasks based on human inputs according to a set of rules (a program) that is developed ahead of time. For example: when we write an email and hit send, your program knows to transmit your email to its recipient through the Internet. It does it the same way every time.

With AI, the technology learns as it performs these tasks, so that each time you give it instructions, it gets better at executing them. This produces a positive feedback loop. More actions yields better execution, which allows you to produce ever more-efficient outcomes.

It’s easy to see how this feedback loop can change the way we interact with technology - especially at work. Some alarmists have warned that this will allow “robot overlords” to dictate our daily lives. At some point, the robots will become smarter than we are and take away our jobs and, in extreme cases, our very reason for being.

These doomsayers are misunderstanding both the challenges and opportunities with respect to AI, especially as they apply to the world of logistics. We have a different point of view about the future of Artificial Intelligence, reflected in three key points:

  1. AI increases efficiency and therefore productivity. It does not need to replace workers. Rather it can enhance how much any given worker can produce. It replaces the idea of human labor with the concept of human capital. This means that your value in the market is no longer just a function of how many hours you work, but instead by how much knowledge you contribute. At least for now, even AI-enabled tech cannot fully replace the human mind. Wouldn’t we all like to live in a world where our profits are related not to brute force, but rather to human ingenuity?

    Evidence of this is already emerging: According to the Wall Street Journal (subscription required), e-commerce employment (not including parcel delivery drivers) has grown by 401,000 since 2007, outpacing the drop in brick-and-mortar retail.
  2. Higher efficiency means that more goods are produced and more goods are consumed from the same amount of effort. And until we develop the technology to teleport freight from one location to another, there will still need to be physical logistics to manage this part of the supply chain.
  3. AI will make transport logistics itself more efficient, leading to lower costs and greater capacity. Here’s a good historical example of this: Fifty years ago, before Fedex, it would’ve been impossible to flexibly and cost-effectively move its current volume of shipments worldwide. It is only because of technology that they can use algorithms to calculate millions of routes to deliver efficiently. Think about how much value has been unleashed by this technology advance. AI enabled logistics is the next generation of this same phenomenon.

Sure, it is a little bit scary to think ahead to a world where technology has a theoretically unlimited capacity to think and solve business problems. But at least in the short term, we believe AI will create more opportunities than it destroys. The key is to stay abreast of developments in the AI world and, at each step, don’t think about how to “defend” yourself from the robots. Instead, think about how the robots can help you profit from the productivity gains they create.


Download the free CoLoadX whitepaper, "Logistics as a Service: How it Will Transform Your Ocean Freight Business" and see how LaaS will help your company grow.

By: Fauad on Sept. 6, 2017, 3:06 p.m.
Tags:   AI   Commentary   Logistics   Technology