State of AI & ML

AI in Logistics: Emerging Startups, Remaining Challenges and New Models

by Yuliya Sychikova
COO @ DataRoot Labs

Artificial intelligence is hitting new adoption levels each year, with industries like supply chain management and logistics taking center stage in the AI race. As per Infoholic Research, the AI in logistics and supply chain market is predicted to grow at a CAGR of 42.9% over 2017-2023 to reach $6.5 billion by 2023.

The process complexity and amounts of data generated by the industry call for a higher tighter structure and transparency through digitalization. Operational challenges aside, people want their stuff right now – be it a multinational corporation awaiting new equipment or an Amazon customer expecting their gifts come holiday season. In today’s world, the speed of delivery matters more than ever. In addition to speed, customers demand deliveries and pick-ups at a specific time slot, adding a layer of complexity to route optimization. Then there’s the question of pricing.

At the age of online price transparency, companies are expected to deliver a higher quality of service at lower costs, putting pressure on company margins and pushing them toward labor automation. There are just too many moving parts to this industry for it to persist without AI and the augmentation. With multiple players across different parts of the supply chain, regulators, a vast number of third parties including subcontractors, operators, airlines – this is literally too big to fail, but it’s certainly prone to economic stagnation and hard losses if the whole setup does not adapt to the modern age.

Industry trends and major players

While there is a lot of innovation coming from startups, established players bring plenty of disruption as well. Companies like DHL and ports like the Port of Rotterdam are constantly in the headlines when it comes to adopting new technologies. More specifically, DHL has built a machine learning-based tool that predicts air freight time delays. The machine analyzes 58 different data points and predicts daily transit delays or speedups up to a week in advance. Furthermore, the ML model pinpoints the top factors influencing shipment delays.

The Port of Rotterdam invested in self-learning models by developing Pronto, an app for standardized data exchange on port calls. The app allows shipping companies, agents and terminals to plan, implement and track their activities during a port call. By analyzing such factors as vessel type, cargo type, location, route, sailing speed and other vessels in the vicinity, Pronto powered by AI predicts vessel arrival times in the port.

In the meantime, East Japan Railway Company, one of the largest logistics companies in the world, plans to launch the implementation of autonomous train driving by 2027.

FedEx recently announced its new FedEx SameDay Bot to make “last mile” deliveries more efficient. With a maximum speed of 10mph, the bot uses a combination of LIDAR sensors akin to those in self-driving cars and regular cameras to navigate on the road independently and avoid collisions. Perhaps very soon our pizza from Pizza Hut or groceries from Walgreens will be delivered by SameDay bot.

We hear more and more announcements from big auto players such as BMW, Daimler, Ford, Toyota, and VW. Most of them are developing autonomous vehicle technologies. At the same time, younger companies like Google, Tesla, and Waymo challenge the incumbents by developing their own autonomous vehicles using proprietary AI and manufacturing techniques. In addition, mobility platform companies Lyft and Uber are partnering with established automotive companies to offer on-demand rides autonomously.

Overall, the innovation in logistics can be grouped into the following cohorts:

1. Automation of existing processes

Automation is the first step towards large-scale optimization across the board, and lots of companies have already done it to at least stay competitive:

  • Automating repeatable tasks like form completion, invoicing, and inventory check-ups.
  • Accelerating the complex brokerage process susceptible to human error and requiring very specific knowledge of regulations.
  • Automating customer data collection and storage – an ongoing challenge for large enterprises that want to keep up-to-date records on their clients.

2. Prediction and forecasting for processes optimization

Automation already brings major benefits to the industry, but there are even bigger gains in the predictive power of AI. There’s an entire host of potential use cases that are being either explored or internalized by major logistics companies:

  • Predicting delivery routes by enhancing communication between a multitude of global supply chain participants to efficiently transport, pick up and deliver shipments.
  • Forecasting wear and tear of machinery and improving the Overall Equipment Effectiveness index.
  • Predicting fuel usage for fleet optimization.
  • Predicting future demand for production.

3. Advanced technology for disruptive innovation

If we explore the technology funnel even deeper, there’s basically a sea of possibilities when it comes to more advanced forms of AI that we are just starting to explore. Think Boston Dynamics and Amazon’s fleet of autonomous delivery drones, and then consider how far off are these use cases:

  • AI in image recognition will speed up inventory management, while intelligent robotic sorting will accelerate parcel processing.
  • Purchasing through smart AI assistants like Siri, Alexa and Google will help personalize the shopping experience and increase the already break-neck velocity of consumerism.

According to Rob Carter, CIO of FedEx, you will be able to “talk your way through and [Alexa will] ask the right questions to make sure you’ve completed the work. Then you can expect a truck to roll up to the front door of your office, pick up the shipments, and move them along.”

M&A Activity in Logistics and supply chain

A lot of innovation is happening in the logistics sector. We see ride-hailing companies consolidating, industry incumbents adding innovative tech solutions or top talent to strengthen their departments through the acquisitions. While there were plenty of impressive acquisitions in 2019 alone, we predict many more to come in the next few years as the industry continues to be technologically disrupted. In the table below, we summarize the most recent tech acquisitions in logistics, transportation, and smart mobility space.

Company Deal Date HQ / year founded Amount Raised, $M Deal Amount, $M Acquirer Deal Rationale
Careem Networks March, 2019 Dubai, UAE / 2012 772 3100 Uber Uber is buying a dominant competitor in a strategically important MENA region June, 2019 San Francisco, US / 2015 77 N/A Apple The has been working on AI tech for autonomous vehicles for a few years, but ran into cash shortage problems and got picked up by Apple
Journey Holding Corporation July, 2019 US / 2018 N/A N/A Ford As Ford seeks to scale up its new mobility business, it acquired the company that has developed vehicle tracking software and app-based technology designed for public transportation
Quantum Signal July, 2019 US / 1999 N/A N/A Ford To bolster modeling simulation for autonomous vehicles, Ford bought small robotics company and defense contractor known for mobile robotics and real-time simulation August, 2019 India N/A N/A Ola uses artificial intelligence, computer vision and sensor fusion to provide seamless AI-powered solutions for businesses, synergic with Ola's business
Torq Robotics March, 2019 US / 2005 N/A N/A Daimler To accelerate autonomous truck development with a majority stake acquisition in self-driving vehicle company Torc Robotics
Mighty AI June, 2019 Seattle, US / 2014 27 N/A Uber Uber will acquire Mighty AI’s intellectual property, tooling, tech talent, and labeling community, the startup will shut down post acquisition
Octopi March, 2019 US N/A N/A Navis By acquiring Octopi, a cloud-based TOS built for small container and mixed cargo terminals, Navi strengthens its positions in movement of cargo market
Grab February, 2018 India / 2014 7 N/A Reliance With this acquisition, Reliance Industries Limited will control 83% equity of Grab. The investment will further augment the group’s digital commerce initiatives and strengthen its logistics services, catering to both B2B and B2C segments
Aramex (India operations) February, 2019 Dubai, UAE N/A N/A Delhivery The acquisition would likely strengthen Delhivery's foothold into the e-commerce logistics market in India
ScottyLab August, 2019 San Francisco/ 2017 6 N/A Doordash With the acquisition ofScottyLabs, Doordash buys autonomous and remote-controlled vehicle technology

AI-Enabled Startups in the global logistics industry

Based on public information gathered from Crunchbase and other sources, we have compiled a list of startups that bring artificial intelligence to the global logistics industry. Every logistics tech startup carries a unique approach to AI, and some of them have already operationalized several use cases.

To highlight a few cases, the Finnish startup founded in 2011, ZenRobotics has been developing intelligent robotic waste sorting systems. By leveraging computer vision and machine learning algorithms, they developed the ZRR2 robotics system that sorts and picks recyclables from moving conveyor belts.

Nuro a Californian startup founded by ex-Google employees, has announced a $1 billion investment round from Softbank. The startup produces R-1 robots, which can carry many products on board, can cross sidewalks and even climb stairs to make deliveries and due to its slimness, are safer than most alternatives.

Robby Technologies founded in 2016 and backed by YCombinator is developing Robby 2, an autonomous vehicle with advanced AI for navigation and interaction capabilities. It can navigate not only roads but also sidewalks, pedestrians, and rail crossings. It is also equipped with conversational AI to encourage interaction between humans and the robot. For example, if a person blocks Robby’s path, Robby will say “excuse me” and “thank you”.

Satellite imagery company DigitalGlobe high-resolution pictures of the planet’s surface to ride-sharing giant Uber. These images provide rich input sources for the development of advanced mapping tools to increase the precision of pick up, navigation, and drop off between its drivers and riders. DigitalGlobe’s satellites can decipher new road-surface markings, lane information, and street-scale changes to traffic patterns before a city adds them to its official vector map.

This is not an exclusive list of AI logistics startups list – feel free to add more companies in the comment section at the end of this article – we’ll make sure to add them to our knowledge base.

Company HQ / year founded Amount Raised, $ Investors What they are doing
Convoy 2015 / Seattle, WA 265.5M CapitalG, Y Combinator, Greylock Partners A marketplace that connects shippers with nearby trucks (‘carriers’) and books jobs instantly.
Flexport 2013 / San Francisco, CA 304M
S.F. Express, DST Global, Founders Fund A licensed customs brokerage and freight operator built around a modern web application, that includes such services as an online dashboard for businesses to easily understand, purchase, manage and track the services required for global trade.
Freightos Hong Kong 92.7M
Singapore Exchange Limited, GE Ventures, Annox Capital, Aleph An online freight marketplace and powerful international freight routing/pricing technology that helps importers and exporters reduce logistic expenses and save time with an instant comparison, booking, and management of air, ocean, and land shipments.
CargoX 2013 / Sao Paulo, Brazil 95M
Blackstone Group, Goldman Sachs A technology-powered freight broker that provides shippers with an efficient solution to transport the most diverse types of products in any part of Brazil. The service is based on a technology that has a growing fleet of 100,000 truckers.
Bossa Nova Robotics 2005 / San Francisco, CA 69.6M
Cota Capital, Paxion Capital Partners A real-time, on-shelf product data provider for the global retail industry. Its technology collects terabytes of data that enables the retail ecosystem to optimize the omnichannel shopping experience.
6 River Systems 2015 / Boston, MA 46M
Menlo Ventures, Norwest Venture Partners Flexible and scalable warehouse automation that engages associates, keeps them on task and provides a 2-3x productivity boost.
Locus Robotics 2014 / Wilmington, MA 33M
Scale Venture Partners A warehouse robotics company that manufactures autonomous, mobile robots to support e-commerce operations for retailers and warehouse logistics providers.
Transmetrics 2013 / Sofia, Bulgaria 1.8M
LAUNCHub Ventures Provides cargo companies with data cleansing, demand forecasting and network optimization based on AI and predictive analytics allowing transport companies to improve their capacity utilization, achieve significant savings and reduce their environmental impact.
Shippo 2013 / San Francisco, CA 29.3M
Bessemer Venture Partners, Union Square Ventures, angels, Slow Ventures, Plug and Play A multi-carrier shipping API and web app for marketplaces, warehouses, and e-commerce businesses. The company processes millions of shipments per month for more than 35,000 customers. Businesses are able to instantly access multiple shipping carriers for real-time rates, shipping labels, international paperwork, package tracking, and return logistics.
ClearMetal 2014 / San Francisco, CA 12M
Innovation Endeavours, Prelude Ventures, Skyview Capital A Supply Chain Visibility Software company that builds data-driven products to solve the most complex operational problems in supply chaiт to make trade data organized, accessible, predictive, and actionable.
TradeGecko 2012 / Singapore 17.7M
Aura Venture Fund, TNB Aura Fund, Jungle Ventures, Openspace Ventures Inventory and order management platform for modern wholesale merchants, integrating sales channels, logistics providers, and accounting services.
Starship Technologies 2012 / San Francisco, CA 42.2M
Daimler, Playfair Capital, Grishin Robotics, Matrix Partners, angels Develops fleets of self-driving delivery robots, designed to deliver goods locally within 30 minutes. The robots drive autonomously 99% of the time to make safe and environmentally friendly curb-side deliveries from a local hub.
Nuro 2016 / Mountain View, CA 92M
Gaorong Capital, Greylock Partners Self-driving delivery startup which accelerates the benefits of robotics for everyday life.
Marble 2015 / San Francisco, CA 10M
Lemnos VC, Tencent Holdings, Maven Ventures Creates a fleet of intelligent courier robots to reliably and securely transport the goods.
Boxbot 2016 / San Francisco, CA 9M
Artiman Ventures Integrates years of advancements in robotics and autonomous technologies to optimize last-mile logistics, which is the single most expensive part of any delivery. 2015 / Mountain View, CA 91M
New Enterprise Associates, Nvidia GPU Ventures AI software for autonomous vehicles based on deep learning technology.
Zoox 2014 / Foster City, CA 790M
Grok Ventures, Blackbird Ventures, DFJ, Lux Capital Autonomous mobility-as-a-service, operating at the intersection of design, computer science, and electro-mechanical engineering.
Aurora 2016 / Palo Alto, CA 90M
Greylock Partners, Index Ventures A self-driving vehicle company that works at the intersection of engineering and applied machine learning to transform the way people and goods move. Shenzhen, China 140M
Shenzhen Capital Group, Wu Capital Empowers cars and trucks with artificial intelligence to make transportation safer, more enjoyable, more efficient.
Voyage 2017 / Santa Clara, CA 20.2M
InMotion Ventures, Khosla Ventures, Amino Capital Autonomous vehicles company working to bring about the end-goal of self-driving cars: a world where anyone, anywhere can summon a car directly to their doorstep, travel safely to their destination, all for an extremely low price.
CoLoadX 2015 / New York, NY 1M
Right side Capital management, Silicon Badia, Closed Loop Fund, others An international ocean freight marketplace, digital ocean freight procurement platform built by freight forwarders, NVOCC’s, and logistics service buyers.
New York Shipping Exchange (NYSHEX) 2014 / New York, NY 13M
GE Ventures, Goldman Sachs, Blumberg Capital NYSHEX provides the alternative to the unpredictable spot market and volatility of freight rates.
FreightHub 2016 / Berlin, Germany 23M
Northzone, Cherry Ventures, Global Founders Capital The digital freight forwarder and a digital interface to manage user logistics. It features past, current, and future freight shipments, keeps track of missing documents, uploads all files and stores them for future use, and offers real-time freight tracking.
Fleet 2014 / Portland, OR 14M
Lufthansa Cargo, Hunt Technology Ventures, Avala Capital An online platform that businesses use to book and manage transportation for international freight. Fleet provides instant quotes, improved decision making by showing provider lead times, ratings and reliability, direct access to all of the service providers and a team room to communicate directly with service providers for status and view shipping documents.
We4Sea 2016 / Delft, Netherlands 0.45M
Mainport Innovation Fund A cloud platform that offers solutions to optimize the performance of large commercial (cargo) ships.
Nautilus Labs 2016 / New York, NY 2M
Root Ventures, angels A proprietary data collection & storage system for the commercial shipping industry to help them burn up to 30% less fuel.
Loginext 2014 / Fremont, CA 10.6M
Alibaba through One97 Communication, Paytm Logistic and field workforce solutions to plan, optimize, track, and analyze resource and asset movement in real-time, offering field workforce optimization, real-time tracking, route optimization, resource allocation automation, long-haul trucking, and on-demand management to more than 250 enterprise clients.
Smarter Sorting 2015 / Austin, TX 9.3M
RTP Ventures, McCune Capital, others A machine learning solution for waste management that allows municipalities to take waste of extreme negative value and use proprietary software to sort that waste into high-value commodities that are sold into established markets.
ZenRobotics 2007 / Helsinki, Finland 16M
Invus, Lifeline Ventures, EASME, Finnvera Venture Capital A supplier of intelligent sorting robots for the waste industry. The company’s main product is ZenRobotics Recycler, a waste sorting system which separates raw materials from waste.
Qopius 2015 / Paris, France 2M
360 Capital Partners Retail Computer Vision Platform automating and digitizing retail using computer vision to enable retailers and brand to track out-of-stock, price issues, and compliance in real-time using autonomous robots, IoT cameras and smartphones. 2016 / Tel Aviv, Israel
ICONYC Labs A software and Artificial Intelligence (AI) for optimizing last-mile delivery operations and experiences. has developed Jenny, a conversational agent that can contact parcel recipients via Facebook Messenger or SMS to coordinate delivery times, locations, and other specialized instructions.
GreyOrange 2011 / Singapore 170M
Mithril Capital Management, Tiger Global Management, Blume Ventures, BITS Spark Angels The company creates hardware and software products for warehousing industry and builds products for logistics fulfillment in order to increase order picking and parcel sortation rates and reduce the time it takes to replenish store inventory and get orders to consumers.
RobbyTechcnologies 2016 /- 5.5M
Y Combinator, FoundersX, Silicon Valley Future Capital Robby Technologies is building self-driving robots to deliver food and packages autonomously to users' doorsteps.
Peloton 2011 / San Francisco, CA 78.4M
Omnitracs, Denso, Intel Capital Peloton's system uses radar and DSRC vehicle-to-vehicle communications to link active safety systems between pairs of trucks, reducing collision-related expenses and fuel costs. The dramatic reduction in aerodynamic drag in these platoons provides substantial improvements in fuel economy for both the trailing and leading trucks: with on-road testing showing average savings over 7% between the two trucks.
Tusimple 2015 / US 287M
UPS, Nvidia, ZP Capital and Sina TuSimple develops all of the technological pieces required for autonomous driving. TuSimple is developing a Level 4 system, a designation by the SAE that means the vehicle takes over all of the driving in certain conditions.
Bykea 2016 / Pakistan 5.7M
Middle East Venture Partners This Pakistani on-demand transport, logistics, and payments startup claims to have 2 million app users and a fleet of over 200K driver-partners, the larges in Pakistan. It enables users to book its services through an Interactive Voice Response (IVR) solution.
Cargofy 2014 / California, CA
Iowa Startup Accelerator Cargofy is a mobile assistant, kind of a “Siri” but for truck drivers. Cargofy helps truckers access high paying loads through an app, and receive discounts on fuel, maintenance, and truck parts.

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Updated Sep 11, 2019 — 12:34 UTC