Report

Global AI in logistics market is projected to witness a CAGR of 26.22% during the forecast period 2024-2031, growing from USD 12.02 billion in 2023 to USD 77.43 billion in 2031. The market is experiencing growth due to the increasing demand for efficiency, cost reduction, and improved customer service. Companies are leveraging AI technologies such as machine learning, predictive analytics, and automation to optimize supply chain operations, efficient inventory management, and improve route planning. These advancements enable real-time decision-making by reducing delays and minimizing operational costs. AI-powered tools facilitate demand forecasting, allowing businesses to anticipate market needs and adjust their strategies. Integrating AI with Internet of Things devices increases visibility across the supply chain and improves shipment and asset tracking. As e-commerce continues to expand, the logistics sector is increasingly adopting AI solutions to manage complex delivery networks and meet customer expectations for faster service. Investing in AI is promoted due to the need for sustainability because optimized logistics can reduce carbon dioxide emissions. As a whole, the recruitment of AI in logistics promotes innovation and competitiveness while focusing on the rapidly evolving market environment.
In June 2023, a Norwegian drone logistics company, Avant Global Limited, launched a home delivery service called Kyte, which operates within a 30 km radius to transport groceries, ready meals, and light medicines via its application. Aviant has demonstrated its capabilities by previously drawing USD 1.1 million in funding from Innovation Norway. The company aims to deliver prescription medicines to remote areas by leveraging drones to overcome mobility issues caused by bad roads and severe weather. This innovative approach enhances access to vital supplies and sets a precedent in the logistics market by proving that drone delivery can effectively operate over larger distances without traditional limitations, marking a significant advancement in AI-driven logistics solutions for last-mile delivery.
Technology and Automation to Drive Market Growth
Technology and automation are revolutionizing AI in the logistics market, dramatically increasing efficiency, accuracy, and scalability. Advanced AI algorithms analyze massive amounts of data to optimize supply chain processes, allowing companies to forecast demand, manage inventory, and optimize delivery routes in real-time. Automation technologies such as robotics and autonomous vehicles reduce human error and operational costs while accelerating warehouse operations and last-mile deliveries. IoT devices provide continuous monitoring of shipments, improving transparency and enabling proactive responses to disruptions. Machine learning models further improve logistics strategies by learning from historical data to aid in risk management and operational forecasting. The convergence of these technologies enables logistics companies to improve customer experience, reduce delivery times, and minimize environmental impact, contributing to overall industry growth. This synergistic effect of artificial intelligence, automation, and data analytics contributes to innovation and development by positioning them in a competitive environment.
In January 2024, Accenture and Mujin, Inc. launched a joint venture, Accenture Alpha Automation, to enhance the manufacturing and logistics sectors through AI and robotics. This collaboration combines Mujin's expertise in intelligent robotics with Accenture's digital engineering capabilities, enabling companies to integrate operational and management data for improved decision-making and hyper-automation. By simplifying the deployment of robotic systems, the venture addresses the complexities typically associated with industrial automation. This initiative not only enhances productivity and efficiency but also supports the growth of AI in the logistics market by fostering a data-driven approach, essential for navigating the challenges of an aging workforce and evolving market demands.
Cost Reduction to Fuel the AI in Logistics Market Growth
The reduction in costs associated with AI technologies significantly boosts growth in the logistics market by enhancing operational efficiency and decision-making. Lower implementation costs enable companies, even smaller ones, to adopt AI solutions such as predictive analytics and automated inventory management. This leads to optimized routes, reduced delivery times, and improved resource allocation, ultimately driving profitability. Cost-effective AI tools foster innovation, allowing logistics firms to experiment with new models and technologies. As a result, the logistics sector becomes more agile and responsive to market demands, contributing to a more dynamic and competitive environment.
In September 2023, FourKites, Inc. launched Fin AI, a groundbreaking generative AI solution designed to enhance supply chain visibility and decision-making. Utilizing the largest supply chain data network, Fin AI offers a natural language interface that helps companies quickly assess disruptions, diagnose shipment issues, and automate time-consuming tasks. By enabling proactive decision-making and eliminating data silos, Fin AI empowers logistics professionals to focus on high-value tasks, driving efficiency and optimization in areas such as transportation and inventory management. This innovation is poised to significantly advance AI integration in the logistics market, enabling companies to leverage vast amounts of data for smarter, faster decision-making, and ultimately fostering growth in the industry.
Retail Segment to Dominate the AI in Logistics Market Share
The retail sector dominates the logistics market for AI due to the high demand for effective supply chain management and improved customer experience. With the rise of e-commerce and increasing consumer expectations for fast and accurate delivery, retailers are using AI to optimize inventory, forecast demand, and automate order fulfillment. AI solutions such as robotics, predictive analytics, and autonomous delivery systems streamline operations and reduce costs. Retailers can benefit from AI-enhanced last-mile delivery and personalized customer service, which are essential to staying competitive in a rapidly evolving marketplace. This growing reliance on AI is driving the retail sector's leadership in the logistics industry's transformation.
In March 2023, Alibaba Cloud launched its AI-driven logistics solution, EasyDispatch, in Malaysia to enhance the local logistics industry by improving supply chain management and reducing costs. The solution features real-time service dispatch, advanced vehicle route planning, and high-accuracy address processing, leveraging reinforcement learning and machine learning. Collaborating with local companies Global Track and EasyParcel, Alibaba Cloud aims to elevate operational efficiency and scalability, helping businesses reduce processing times and workforce requirements significantly. This initiative is set to drive digital transformation in the logistics sector, fostering growth in the AI market by enabling smarter, data-driven decision-making and enhancing overall service delivery.
North America to Dominate AI in Logistics Market
North America is dominating the AI in logistics market due to its robust technological infrastructure, significant investment in research and development, and a concentration of leading tech companies. The region benefits from a highly skilled workforce and extensive data availability, facilitating the implementation of AI solutions for supply chain optimization, predictive analytics, and autonomous vehicles. The presence of major logistics firms and e-commerce giants drives demand for innovative AI applications, enhancing efficiency and reducing costs. Collaborative partnerships between technology providers and logistics companies further accelerate AI adoption, positioning North America as a leader in this transformative sector.
In May 2024, AB Volvo Autonomous Solutions recently unveiled Volvo VNL Autonomous, a fully redundant autonomous truck developed in partnership with Aurora Innovation, Inc., designed to enhance freight capacity and address industry challenges such as driver shortages. This truck integrates advanced safety features and cutting-edge autonomous driving technology, making it a significant step forward in logistics. Increasing efficiency and reliability in transport helps logistics companies scale operations and facilitates adopting AI-driven solutions across the industry, ultimately improving the supply chain and allowing human drivers to focus on tasks better aligned with work-life balance.
Future Market Scenario (2024 � 2031F)
� AI enables more efficient supply chain management by forecasting demand, optimizing routes, and managing inventory levels in real time, reducing costs and improving service levels.
� The rise of autonomous vehicles and AI-enabled drones will revolutionize last-mile delivery, increasing speed and reducing labor costs while improving customer satisfaction through faster service.
� AI provides vehicle maintenance and equipment predictive analysis and identifies problems before leading to dysfunction, minimizing downtime and reducing dysfunction.
� AI can contribute to more individual logistics solutions, provide individual distribution options, and improve monitoring and communication abilities to improve customer participation.
Key Players Landscape and Outlook
Companies in the global AI in logistics market are focused on improving efficiency and profitability through automation, predictive analytics, and real-time decision-making. They use AI to optimize routes, forecast demand, and automate warehouses, reduce delays, and improve supply chain visibility. The integration of AI-based robotics for material handling, packaging, and sorting is on the rise. Companies are investing in AI-based fleet management to monitor vehicle performance and reduce fuel consumption. By constantly improving machine learning algorithms and implementing IoT for real-time tracking, AI companies are addressing the growing need for fast, flexible, and sustainable logistics solutions.
In April 2024, The Coca-Cola Company and Microsoft announced a USD 1.1 billion five-year strategic partnership to leverage Microsoft's cloud and generative artificial intelligence technologies. The alliance is designed to strengthen Coca-Cola's technology strategy and focus on innovation and productivity across its global operations. This partnership investigates marketing, manufacturing, and supply chain AI applications to rationalize operations and improve customer experience using tools such as Azure OpenAI Service and Microsoft 365. This initiative enables the more effective management of supply chains, predictive analysis, and automation, greatly enhancing the logistics market, ultimately reducing costs and improving the response to market demands.