How AI Can Help Retailers Deal with Major Disruption from Hurricanes
The retail industry once again finds itself confronted with another potential set of disruptions, this time coming in the form of hurricane season. Hurricane Fiona has offered fresh reminders of the potential for disruption that hurricane season holds for retail shippers and their logistics partners.
And although hurricane season is nothing new, because of the constant state of flux that has gripped the supply chain space over the last few years, many retailers are still feeling a sense of foreboding about whether they are sufficiently prepared and as resilient as they need to be. Which is why AI is once again front and center as we move towards the end of the year and the holiday period.
Even before the pandemic broke out, the retail industry in many ways was perceived as a bit of a standard bearer when it comes to early adoption of technology and technology experimentation. This is except for when it comes to shipping and logistics.
Broadly speaking, the logistics space has remained largely unchanged over the last few decades in comparison to other industries that have been much keener to modernize. However, as the pandemic has tightened budgets and made accessing capacity much more cut throat, retail shippers have begun to introduce more sophisticated technology, such as freight procurement automation, into their operations. And AI is emerging as an indispensable tool in helping retail shippers better navigate periods of disruption like hurricane season. Here are a few key ways how.
Making sense of the capacity market is a pain for shippers even in the calmest of times. But over the last three years, it has turned into a complete nightmare. This is particularly true in the aftermath of natural disasters when trucks are displaced from their usual locations and switch from their normal loads to providing relief supplies.
AI is helping to solve this by allowing retail shippers to receive a real-time view of the capacity market directly versus having to wait for lackluster data to come in through third-party providers. In addition, this visibility is helping retail shippers build up a repository of historical data that they can then synthesize with current conditions to make the best decisions.
Balancing Truckload Cost with Service
As the pandemic and associated disruptive fallout have rumbled on, shippers have become increasingly attuned to service, and delivering goods on time as planned. With massive cost fluctuation, it is difficult to know how much to allow per load.
With that, shippers have begun to embrace new tools, such as freight procurement automation, which use AI/ML and configured shipper load attributes to dynamically matches loads to the right carrier, at the right time, place and price.
With AI in place, shippers automatically open up loads directly to the market for bidding, allowing them to get the best deal and best suited carrier for a given load.
The modern retail world depends on having as much real-time information as possible so that organizations can make the best holistic decisions. However, oftentimes, logistics and shipping have been siloed off.
With the dawn of the AI revolution, however, open lines of communication have become even more common throughout retail businesses, most notably when it comes to how logistics is incorporated into business decision making. For example, given the ease of accessing logistics data, many retailers are now able to factor shipping into their cost of goods sold in a much more effective way than they were before – when it was largely overlooked.
In addition, AI also affords business leaders the opportunity to make more accurate forecasts for mapping out response plans to worst case scenarios – like in the case of sourcing challenges or natural disasters.
The uncertainty posed by hurricane season is a tough challenge — socially, geologically, and economically. However, through the use of AI and other sophisticated data science tools, retailers can make the best possible logistics decisions and mitigate both immediate and longer-term damage.