How Artificial Intelligence is Transforming Global Shipping & Supply Chains

Artificial intelligence (AI) has come a long way since its inception in the 1950s. In the past decades, AI has rapidly evolved and transformed various industries, including Supply Chain Management (SCM). In this piece, we will explore the evolution of AI and its impact on modern supply chains and global shipping.

Evolution of Artificial Intelligence

The concept of AI was first introduced in the 1950s, but it wasn’t until the 1980s that AI had begun to take shape (and terrify moviegoers with the prospect of sentient killing machines from the future).

Expert systems and rule-based systems were developed during this time, which enabled computers to perform tasks that would require human intelligence. However, these systems were limited, with a much narrower scope than modern AI.

In the 1990s, machine learning emerged, which allowed computers to learn from data without being explicitly programmed. This breakthrough led to the development of neural networks and deep learning, which are the foundations of modern AI.

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How is AI Used in Supply Chain Management?

The impact of AI on global supply chains has been tremendous! AI has enabled supply chain managers to make better decisions by providing them with insights and predictions based on large amounts of data. Here are a few examples of how AI has impacted SCM:

Predictive Analytics

AI algorithms can analyze historical data to predict demand, inventory levels, and lead times. This enables supply chain managers to optimize inventory levels and avoid stockouts.

Autonomous Vehicles

AI-powered autonomous vehicles can transport goods without the need for human drivers. This has the potential to reduce transportation costs and increase efficiency.


AI-powered robotics can perform repetitive and labor-intensive tasks in warehouses and facilities. This reduces the need for human labor and increases productivity.

Natural Language Processing

AI-powered natural language processing can be used to monitor customer feedback and social media posts to identify potential supply chain issues before they become major problems.


Greening Supply Chains

How has AI Impacted the Shipping Industry?

Despite limitations of early programs like the  “Logic Theorist” and “General Problem Solver” programs (designed to prove mathematical theorems and solve problems, respectively), the development of AI in the 1950s paved the way for future breakthroughs in the field. Over the next several decades, advances in computer hardware and software would lead to the development of more sophisticated algorithms and systems that could perform increasingly complex tasks. 

Here are some of the ways AI has impacted the shipping industry specifically:

Environmental Sustainability

AI-powered algorithms have helped shipping companies and enterprises alike reduce their environmental impact by optimizing shipping routes to reduce fuel consumption and emissions. Similar technologies like AI-powered vessels can operate more efficiently than traditional crafts and also reduce fuel consumption.

Improved Operational Efficiency

AI-powered solutions have helped shipping companies optimize their operations and reduce costs. For example, AI algorithms can analyze historical data to predict demand, optimize shipping routes, and manage cargo loading and unloading.

Increased Safety

AI-powered technologies such as autonomous vessels, drones, and robots have helped improve safety in the shipping industry. These machines can perform tasks that are too dangerous or difficult for humans to do, such as inspecting hulls and cargo holds.

Enhanced Customer Experience

AI-powered solutions have enabled shipping companies to provide better customer service by providing real-time shipment tracking, automated customer support, and personalized recommendations.

Improved Security

Lastly, AI-powered solutions have helped shipping companies improve security by detecting and preventing cargo theft, piracy, and other security issues.

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Timeline of Supply Chain Breakthrough Developments

  • 1980s: The earliest instances of AI in the shipping industry can be traced back to the use of expert and rule-based systems, also known as knowledge-based rules.
  • 1990s: The development of expert systems for ship stability analysis leverages these knowledge-based rules to predict ship stability under different loading conditions. Machine learning also emerged around this time, which eventually led to the development of neural networks.
  • 2000s: AI-powered optimization algorithms were developed, which allowed companies to optimize shipping routes, reduce fuel consumption and improve SCM.

Will AI Replace Supply Chain Management?

This million-dollar question has no easy answer. The future of AI in the shipping industry is likely to be transformative, with the potential to bring significant efficiency gains and cost savings, as well as improved safety and environmental performance. While it’s nearly impossible to say for certain if future automation will render SCM obsolete, below are the most likely scenarios given the current landscape:

Predictive Maintenance:

AI can be used to predict when repairs are needed for ships and their components, allowing for proactive maintenance and reduced downtime.

Autonomous Vehicles

While autonomous vehicles certainly aren’t something new, AI may soon be leveraged to develop fully autonomous ships, which would reduce the need for crew members on board and increasing cost savings.

Environmental Monitoring

AI can be used to monitor and analyze environmental data, such as sea temperature, pollution levels, and weather patterns, which can help shipping companies make more informed decisions about route planning and fuel consumption.

Supply Chain Optimization

AI can be used to optimize supply chains by predicting demand and adjusting shipping schedules, routes, and even inventory accordingly (thereby reducing waste and increasing efficiency).


The Future of AI

How to Optimize Your Supply Chain Today

Overall, AI has the potential to bring significant benefits to the shipping industry, but it requires a willingness to invest in- and adopt new- technologies and business models. Depending on the technology, the benefits of increased efficiency, safety, and sustainability can yield enormous returns for businesses of any size.

To those worried about AI taking their jobs or taking over civilization, we offer this quote from fictional news anchor, Kent Brockman: "I, for one, welcome our [robot] overlords!" 

Joking (kind of)!

ShipERP for Supply Chain Optimization

Recognized as an industry leading shipping solution, ShipERP provides sophisticated shipping management functionality to users of any system, helping enterprises achieve more efficient shipping operations while reducing labor and freight costs. With extensive supply chain expertise, ShipERP delivers powerful shipping optimization for users and impressive returns on investment for owners.
Their flagship product, ShipERP Core, is SAP Certified and designed to fulfill your every business shipping requirement. With seamless integration of 250+ shipping carriers and over 500 business rules, ShipERP puts you in complete control of your supply chain. Enjoy these out-of-the box features on one single SAP platform:

  • Real-time shipping carrier rate shopping
  • Order processing
  • Shipment creation
  • Label printing
  • Shipment tracking
  • Export document generation
  • Electronic commercial invoice
  • Proof of delivery

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