How AI in freight forwarding drives efficiency and reduces costs

Artificial intelligence (AI) in freight forwarding stands at the forefront of digital transformation in the supply chain industry, offering solutions such as predictive analytics, automated decision making, and enhanced data processing to help alleviate the pressure of quickly responding to incoming shipment requests, optimising transit times, and navigating complex global trade issues. 

By leveraging AI, freight forwarders can not only reduce costs but also mitigate potential downtime and inefficiencies – enhancing their overall service. In fact, McKinsey reports that early adopters of AI in logistics and supply chain significantly outperformed their competitors, showing a 15% reduction in logistics costs, a 35% decrease in inventory levels, and a 65% increase in service levels. 

Here are nine specific use cases that demonstrate how AI streamlines freight forwarding and supply chain logistics.

1. Enhancing freight cost calculation

Freight forwarders can leverage AI’s predictive capabilities to increase the accuracy of their freight expense calculations. With access to automatic analysis of patterns in historical and real-time data, such as fuel costs and traffic conditions, happening automatically, teams are well-equipped to respond to any freight quote request, faster than ever. 

2. Automating carrier matching

By utilising AI in the logistics industry, powered by sophisticated algorithms that consider variables such as load size, route, and capacity, freight forwarders can automate the once-tedious manual task of linking shippers with carriers. Teams can now rely on AI to verify shipper bids and analyse the multitude of offers within the system, pinpointing the ideal matches.  

Explore the top benefits of automation in maritime operations.

3. Predicting shipping times with superior accuracy

The use of AI in freight forwarding helps teams calculate precise delivery times, factoring in all the relevant data available, such as route traffic, the complexity of the supply chain, and freight types, allowing for more accurate shipping windows for customers.

4. Tracking shipments more effectively

Shipping AI, when integrated with transportation management systems and databases, excels at providing precise, real-time updates on a shipment’s status and exact location. This enhanced visibility empowers shippers to effortlessly track large volumes of cargo at once, adjusting estimated delivery windows automatically – allowing them to be more proactive in how they manage customer expectations. 

5. Consolidating shipments to reduce costs

Freight forwarders gain a competitive advantage by consolidating smaller shipments into one container. With assistance from AI, the process of planning and arranging those amalgamated loads becomes automated – analysing data such as load size, destination, and expected delivery dates to determine the best packing combinations, helping teams stay as cost-efficient as possible.

6. Optimising routes more efficiently

Using real-time data on critical factors such as fuel costs, weather conditions, and traffic, predictive models analyse thousands of combinations of routes in seconds to pinpoint the most efficient one at any given moment. Enabled by maritime analytics, freight forwarders avoid unnecessary shipment delays, improving delivery times, and service reliability. 

7. Simplifying freight accounting

Integrating AI in freight forwarding workflows allows for intuitive billing on autopilot, while simultaneously detecting customers that are not fulfilling the terms of their agreement. AI systems also help verify VAT numbers and other crucial data for contractors and customers.

8. Bracing teams for possible maintenance 

Equipped with AI’s predictive capabilities, as well as its ability to seamlessly connect and analyse big data from multiple systems in real time, freight shippers can proactively schedule fleet maintenance and repairs by anticipating potential equipment failures before they occur. These insights not only minimise repair costs but also reduce possible downtime.

9. Accelerating email communications 

Freight forwarders work with massive volumes of emails, but 60% of which is not relevant, so there is a lot of inefficiencies. The use of purpose-built AI email organisers streamline the freight forwarders' process by automating the consolidation of vast amounts of data from multiple sources, which can push productivity into overdrive. 

By integrating with data from your maritime software stack, AI significantly enhances a team’s ability to handle incoming customer service requests, manage quotes and centralise conversations and messages for shipments, allowing for more intuitive tracing, tracking, and auditing.

For example, freight forwarders may inadvertently miss important emails related to service level agreements (SLAs), which could get buried under less important messages. AI helps to flag and prioritise this critical communication. 

AI for email management enhances a freight forwarder’s day-to-day communications in the following ways:

Tagging and managing messages

AI using natural language processing and machine learning techniques helps to tag and triage communications more effectively. This level of management helped NORDEN, for example, reduce internal operations emails by 80% — that was time that they were able to refocus on fleet management. 

Ensuring air-tight compliance 

When used to manage email, AI can detect sensitive data and personal details in email and other communications, setting deletion rules automatically to ensure compliance with local laws and regulations. Europe's General Data Protection Regulation (GDPR), for example, states personal data should be deleted after services are rendered unless necessary to retain the data by law. AI technology removes the need for additional resources to manage this process.

Accelerating workflows

With customised training tailored to any workflow, the AI tool can identify and extract defined data points from messages and route that data to third-party systems accordingly. This integration eases the strain teams feel managing the process of moving data between logistics applications and adjacent supply chain applications, reducing the risk of errors that arise when manually copying data.

Freight forwarders reduce email overload with Sedna AI

According to KPMG, 50% of supply chain organisations will invest in applications that support artificial intelligence and advanced analytics capabilities throughout 2024. Sedna offers an intuitive way to introduce AI into your operations.

Stream, our AI-driven email management platform, helps freight forwarders refocus their energy on customers by streamlining many of the more time-consuming parts of their daily operations. In fact, 84% of our customers have seen increased company productivity and profitability by reducing irrelevant emails, allowing them to respond quicker — and with fewer human errors.

Discover how you can increase profitability by employing Sedna's applications of AI in the freight forwarding industry. Request a demo today.

Frequently asked questions

How does artificial intelligence work in logistics?

By analysing both historical data and real-time information, AI-powered systems forecast trends in demand, variations in inventory, and possible interruptions. This insight allows companies to anticipate and proactively enact strategies that enable the optimization of inventory levels and stock and streamline supply chain operations.

What challenges do freight forwarders face when implementing AI solutions?

Implementing AI might pose challenges for freight forwarders, such as selecting the right AI technology to employ in your workflow, integrating diverse data sources, overcoming the learning curve of new technology, and ensuring robust data security and privacy measures. These hurdles require strategic planning, investment in training, and a culture shift towards innovation and continuous improvement to harness AI's full potential.

Explore top strategies to avoid derailing your maritime digitalisation initiatives.