How can AI be the game changer for logistics?
A wave of AI innovation is set to transform ports, terminals, and warehouses across the Asia Pacific, opening new doors to supply chain optimization for customers.
Anders Dømmestrup, Executive Vice President for North Asia and Senior Vice President, Operations at DP World in Asia Pacific, is convinced that AI will play a crucial role in the future of logistics – and a wave of innovation is about to drive a step change for customers in Asia Pacific (APAC).
In the six months since a new AI-powered container-decking tool was rolled out at DP World’s logistics centre in Busan, South Korea, he has seen bottlenecks ease and equipment used more efficiently.
This allows more accurate decking of containers and a better ability to automate the process of dealing with fluctuating flow of cargo through this key hub for customers. Through improved process automation the team can now be more responsive. And it is a vital step in future-proofing the region as volumes grow.
“As trade and logistics volumes expand, it puts pressure on traditional systems. And often those systems don’t have the logic to support that increased complexity,” he says.
As trade across the Asia Pacific region continues to evolve and grow, AI technology is increasingly being adopted in ports, terminals and warehouses. It is proving itself by optimising the use of equipment, making time savings, providing better forecasting and improving worker safety.
Ultimately this all combines to help customers optimise their logistics, bringing greater predictability, and allowing them to forecast more accurately.
And as the applications for its use continue to grow, and systems become more integrated, 2024 is proving to be a tipping point for the use of AI in APAC.
Finding patterns in data
Some of the biggest benefits of the technology come from streamlining decision-making in warehouses, according to Riana Montisano, Vice President, Operations, Logistics, APAC at DP World.
For example, AI can suggest improvements to warehouse layout, highlighting fast-moving products that need to be given prime warehouse space versus slower-moving products that need to be less accessible and could be moved.
This greater efficiency means warehouses can be more responsive to customer needs, resulting in cost savings for them down the line.
“How we set up the logic determines the success of our warehousing,” Montisano says. “If the logic isn’t set-up correctly, operations will suffer. More and more warehouse management systems are using system learning that can suggest improvements. So, when we have good data, we will get good advice.”
DP World is also linking this systemic learning with its labour management system, meaning that when there are good forecasts about a day – for example, Black Friday – then meaningful suggestions will be automatically made about the additional resources needed. In peak periods, this kind of intelligence is crucial to ensuring smooth-running operations and avoiding delays that ripple down the line.
“AI is fantastic at taking infinite amounts of random data and creating patterns from it,” Dømmestrup agrees. “We can use that information to manage the flow through the system, redirect volumes within our yard and smooth out peaks and troughs.”
At ports and terminals, this could mean reducing the number of unnecessary moves, or shuffling in the yard. At Busan, machinery and equipment is also being used in a more efficient way and there is less ‘hanging hook’ time – when the crane is empty waiting for a truck to be available. This translates to quicker, more efficient handling for customers.
Consistent and reliable
In the realm of logistics, greater predictability and consistency is nirvana. And another way AI is contributing towards that is through predictive maintenance. This allows potential issues to be pinpointed before the affected machinery or process goes down – boosting supply chain resilience, helping to avoid any unexpected delays and improving the efficiency of how cargo is handled.
Meanwhile, there are also sustainability considerations from this greater predictability and efficiency – a waiting ship releases tonnes more greenhouse gases into the atmosphere, for example. Although the delay time may seem insignificant after many weeks at sea, this process, replicated many times over, does have a significant environmental impact.
Shifting attitudes
As AI is increasingly used, attitudes towards it evolve. Montisano says that previously when AI was presented as a solution, there would be concerns about how much it would cost and what the benefits would be. Now, customers are actively seeking automation and it has become a point of differentiation for DP World.
“As more and more people request and adopt AI, and it is increasingly integrated into systems, we will continue to refine our offering,” Montisano adds. “It’s a symphony of connected systems – that’s the trick.”
Currently, Busan is at the forefront of AI adoption among ports and terminals, but it is clear that AI in shipping and logistics is at a tipping point. The technologies in use at Busan are already being replicated and rolled out in new locations, and they become more powerful the more they are connected and talk to one another.
Throughout the supply chain, AI adoption is becoming more widespread as the benefits and potential of the technology are increasingly realised.
“Think of AI like your Excel spreadsheet – it could do magic, or it could do one plus one equals two. It really depends on how you use it,” Montisano says. “The question comes back to us – how can we, as the human, maximise AI? And part of the answer will come from experience through exposure.”
By working with partners who are actively using AI, customers will rapidly see the benefits – helping them to achieve an efficient, sustainable and resilient supply chain.