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Supply Chain 4 min read

AI's impact on last-mile delivery takes surprising turn

A delivery van is loaded with packages from a warehouse.

With endless shopping malls now on our phones, last-mile delivery is more important than ever before. How can AI help reduce the pressures at this crucial stage?

Fueled by an increase in online shopping, last-mile delivery is huge — and it's about to get even bigger. By 2027, the market is expected to grow to more than US$200 billion, almost doubling in size from 2020's figures.

As it is the most expensive part of the delivery journey (US$10 per package delivered on average), businesses are looking at ever more creative and innovative ways to not only grow but cut costs at this integral stage in the journey. Let's take a look at six ways artificial intelligence will drive growth in the last mile.

AI can power autonomous delivery fleets

AI is at the heart of autonomous (self-driving) vehicles and drones that could potentially handle last-mile deliveries. This will reduce labor costs, increase delivery speed, and make deliveries possible in areas that are difficult for humans to reach.

Autonomous vehicles can also operate round-the-clock, increasing efficiency and customer satisfaction by providing faster, more convenient delivery options. One of the prominent examples of automated delivery being used today is Amazon's Prime Air delivery drone service. This service aims to deliver packages to customers within 30 minutes using small drones that are guided by GPS to their delivery location.

AI algorithms use data from various sensors to help vehicles navigate autonomously. They can identify and avoid obstacles, follow traffic rules, and choose the most efficient routes. Machine learning techniques allow these systems to learn from their experiences and improve their navigation skills over time.

AI enables autonomous delivery systems to make real-time decisions on the road. For instance, if a road is blocked or traffic is heavy, the AI system can decide to change the route based on the current situation.

Discover more about  automated driving trends

AI can help you predict future delivery patterns

AI enhances the capabilities of predictive analytics and location technology, making last-mile delivery more efficient and reliable. AI systems can learn from historical data and continuously improve their predictions over time. This means they can become more accurate at forecasting demand and estimating delivery times as they process more data.

They can also analyze real-time data from various sources, like traffic updates or weather forecasts, and make instant adjustments to delivery routes and schedules. This dynamic optimization can lead to significant efficiency gains.

Delivery person carries boxes

AI can improve customer interaction

AI chatbots can interact with customers, provide them with real-time updates about their delivery, and handle their queries or complaints. This can improve customer satisfaction and free up human resources for other tasks.

AI can predict vehicle maintenance

AI can predict when delivery vehicles might need maintenance or repairs, based on factors like mileage, usage patterns, and known issues with certain models. This can help prevent breakdowns and delays.

AI can improve last-mile delivery security

AI can identify patterns that may indicate fraudulent activity, such as unusual changes in delivery addresses or quantities ordered. This can help protect businesses and customers alike. AI can also help enhance the security of autonomous delivery systems. For example, facial recognition or other biometric technologies can be used to ensure that packages are only delivered to the correct recipient.

AI can help with delivery inventory management

AI can help manage inventory more effectively by predicting what products will be needed and where, reducing the chances of stock selling out or overstocks and ensuring goods are closer to where demand is expected.

It can also help with load management: AI can optimize the way packages are loaded into delivery vehicles or drones, taking into account factors like weight, size, and destination. This can maximize the capacity of the vehicle and minimize the number of trips needed.

By combining AI with predictive analytics and location technology, businesses can enhance their last-mile delivery operations to make more accurate predictions, respond more quickly to changes, and provide a better service to their customers — saving businesses time and money at this crucial stage of the delivery cycle.

Ian Dickson

Ian Dickson


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