Role of AI in Trading and Shipping

Unraveling the Impact of AI in Trading and Shipping

The integration of technology in the supply chain is enhancing the role of AI in trading and shipping. Artificial intelligence, paired with technologies such as big data analytics, digital twins, and electronic data exchange, is improving international trade relations between shipping parties. Route optimization, supply chain visibility, demand forecasting, inventory management, customer satisfaction, and predictive maintenance are a few of the multiple roles of AI in trading and shipping. Let us delve more briefly into the benefits of AI in the supply chain management processes. 

What is artificial intelligence, in simple words? 

In the world of technology, artificial intelligence or AI is a simulation that mirrors the human mind’s processes and benefits the industries connected to computer science. Using machines and software, AI can mimic human intelligence to perform different tasks involving cognitive functions. Artificial intelligence uses deep learning, natural language processing (NLP), and machine learning to create an unceasing learning process. Through unlimited learning, AI can solve problems, recognize patterns, understand languages, and make decisions to replicate the human brain somewhat. It uses algorithms, software and machines to learn from the resources and data to build its database. The application of AI has exponentially grown to spread through various industries, directly impacting multiple aspects of our lives.  

For example- AI applications, such as a chatbot, require users to give directions and information to generate a personalised result. The AI then sieves results from its existing database to offer a suitable answer for user queries. Not only this, but the data generated from the query is stored and learned by the AI to generate further results. So, AI is programmed to learn from humans as much as humans learn from AI. 

Application of AI in the supply chain 

Artificial intelligence has made its mark on various industries worldwide, including those involved with the supply chain. The supply chain balances the global supply and demand, and it takes cooperation and collaboration from multiple industries, such as the shipping container, logistics and transportation industries. The supply chain is a diverse network of organizations, systems, individuals, and technology working together to keep the supply and demand cycle running. The various processes of the supply chain are enhanced using AI in trading and shipping. 

  1. Networking– The foundation of the supply chain is the network of buyers, sellers, suppliers, and manufacturers. Without this, the supply chain will collapse. Artificial intelligence groups the shipping parties by understanding the demands of individuals or organizations and suggests potential matches of manufacturers, sellers, buyers or suppliers. Data analytics is a helpful tool that uses AI to sieve user history and shipping records to best fit your demand. 
  2. Supply chain visibility– AI benefits the supply chain by allowing the supply chain management or shipping parties to track the lifecycle of their assets or monitor the goods during their transit. It offers transparency for shipping parties, who can be notified about potential disruptions, delays, and other issues in the supply chain. 
  3. Quality check– The supply chain uses multiple equipment, vehicles, and assets for the smooth procurement, loading, and unloading of shipments on transportation hubs or ports. AI-based vision systems help detect any quality or operational errors that may cause disruptions in the supply chain. The goods in transit also need to be tested to check for facets. AI is used for quality control to minimize the defective products entering the supply chain. 
  4. Customer satisfaction– The supply chain caters to the needs of various customers and works to optimize all processes to enhance customer experience. AI-based chatbots help clear customer queries and give them suitable solutions. By offering reverse logistics in shipping, the supply chain has improved customer experience manifold times. 

What is the role of AI in shipping? 

Shipping refers to the transportation process of goods from one point to another through various modes of transportation, including planes, trains, trucks and ships. Transiting goods may require intermodal transport, making the logistics process more complex. Shipping companies and carriers have seen a remarkable improvement by introducing artificial intelligence in shipping.  

  1. Predictive maintenance – The shipping industry uses many machines, vehicles and equipment for cargo loading, unloading and transportation. AI-based predictive maintenance in shipping helps predict the faults in these resources to schedule timely maintenance and repair. It helps avoid uncertain breakdowns and failures that may lead to delays and disruption in the supply chain.  
  2. Intermodal transportation – International shipments need intermodal transport, and keeping track of the shipment throughout its journey in the supply chain can be challenging. AI helps track goods and offers real-time data by integrating IoT in shipping. AI in route optimization is an effective tool that provides the best navigable route for long-distance transportation. 
  3. Cargo optimization – The goods must be packed and stored in shipping containers. Cargo packing, loading, and unloading processes can be optimized based on the weight and volume of the cargo. It also helps manage efficient stowage planning to uniformly distribute the goods inside the container and the containers onto their designated mode of transport.  
  4. Autonomous vehicles – Technological revolutions in shipping have led to the integration of automation in maritime and shipping. Autonomous ships and trucks are being used for transportation of goods. These transport modes are driverless and driven by a collaboration of various technologies such as remote sensing, GPS, cameras, etc. Humans can remotely monitor the vehicles and intervene if necessary. 
  5. Safety management– AI can identify and restrict unauthorised access to the systems used by various companies involved in shipping. It can also forecast weather conditions to alter transport routes and schedules for safer transit.  

Benefits of AI in trading 

Multiple shipping parties are involved in trading, including the importer, exporter, manufacturer, 4PL service providers, and shipping companies. Artificial intelligence in trading helps offer a better, more reliable, and more secure trade to enhance the customer experience. 

  1. Demand forecasting– Manufacturers and suppliers need to maintain a flow of raw materials and finished products to fulfil the demands of the supply chain. Since demand can be uncertain, the supply chain must be prepared to adjust to the rise in consumer demand. AI in demand forecasting helps delve into historical data records, market trends and other factors to analyze the forthcoming influx of demands. 
  2. Inventory management– Overstocking and understocking are potential problems for manufacturers and suppliers. AI in inventory management is used by analysing demand fluctuation, frequency of orders, supplier’s performance and other factors to provide data for inventory storage. It minimizes economic losses caused by unavailability of goods or expiry due to lying in the warehouse for longer than expected. 
  3. Risk management– Knowing the risks associated with cargo transportation is necessary for exporters, importers, and shipping companies. By analyzing various factors, including geopolitical issues in the supply chain, weather forecasts, and regulatory compliance issues, traders can work to mitigate them within time. 
  4. Data-driven decision– It becomes easier for every shipping party to analyze the historical records of suppliers to make decisions regarding trade relations with them. AI also helps analyze trader needs to suggest the best supplier, containers, and other resources required. Data-driven decisions are more accurate, reliable and secure since data backs them up.

These are the benefits that shipping parties reap by integrating AI in trading and shipping. LOTUS Containers is a global market for selling and leasing shipping containers of different types and dimensions. We offer both used and new shipping containers capable of being used for intermodal transportation.

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