The Current State of AI in Logistics: Emerging Startups, Remaining Challenges and New Models


Max Frolov - 16 March 2019 - 0 comments


Artificial intelligence is hitting new adoption levels each year, with industries like supply chain management and logistics taking center stage in the AI race. The process complexity and amounts of data generated by both economies 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. Companies like DHL and ports like the Port of Rotterdam are constantly in the headlines when it comes to adopting new technologies. Automation of existing processes 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 which want to keep up-to-date records on their clients.

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.

If we explore the technology funnel even deeper, there’s basically a sea of possibility 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 shopping experience and increase the already break-neck velocity of consumerism.

AI-Enabled Startups in the global logistics industry
Based on public information gathered from Crunchbase, we have compiled a list of startups that bring artificial intelligence to the global logistics industry. Every company carries a unique approach to AI, and some of them have already operationalized several use cases. This is not an exclusive 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.
Drive.ai 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.
Roadstar.ai 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.
Package.ai 2016 / Tel Aviv, Israel
ICONYC Labs A software and Artificial Intelligence (AI) for optimizing last-mile delivery operations and experiences. package.ai 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.
Cargofy 2014 / California, CA
Iowa Startup Accelerator Cargofy it’s a mobile assistant, kind of a “Siri” but for truck drivers. Cargofy helps truckers access to high paying loads through our app, and receive discounts on fuel, maintenance, and truck parts.

Remaining challenges and future opportunities
We’ve come a long way in augmenting supply chain management and logistics. Even though there’s a lot more disruption awaiting the industry in the future, AI is not without its own challenges.

Data for building prediction may be abundant, yet finding the right way to apply it to the business side of things is still a massive issue. With multiple parties involved in the supply chain, some of which may not be technologically sophisticated, getting data presents a significant challenge as well. Lack of digital communication in logistics is another obstacle, with fax and phone not exactly providing a good data stream for AI. Supply chains typically involve large numbers of outside partners, some of whom may be farther behind technologically than others. One more major problem as outlined by a recent Forrester report, is data security and privacy.

Even though there are plenty of challenges to overcome, the logistics networks will shift to a proactive and predictive paradigm as more data types become available. Tech like computer vision and language-focused AI will help logistics specialists understand previously obscured ways to improve operations and business. These same AI technologies will give rise to a new class of intelligent logistics assets that augment human capabilities – if not replace them altogether.


Sources:
Digitizing the First Mile: Technology & Shipping
AI in the supply chain: Logistics gets smart
Global Business Technographics® Data & Analytics Survey, 2017: Overview
ARTIFICIAL INTELLIGENCE IN LOGISTICS: A collaborative report by DHL and IBM on implications and use cases for the logistics industry