GUEST COMMENT The changing face of delivery: How AI will accelerate the last-mile

Organisations globally are supercharging their investment in innovation in 2024. Nearly half (48%) of the annual revenue of UK SMEs is being channelled into technology, with AI expenditure forecast to approach $200bn globally by 2025. John Gillan, UK general manager of Stuart, asks how will AI impact delivery in the last mile? And how can players in the space translate these new technologies into growth opportunities?

The significance of last-mile logistics has soared in recent years, with the exponential growth of ecommerce, rising consumer expectations, and the demand for rapid, hassle-free deliveries. Over the next five years, AI has the potential to accelerate this transition, fundamentally transforming how consumers engage with shopping and how businesses evolve in response.

Historically, overseeing delivery fleets has been a complex and costly process, requiring extensive human supervision given complex variables such as vehicle types, routing, regulations, weather, and fluctuating supply and demand. This could all be about to change.

The AI revolution, set to hit this sector before long, will see advanced forecasting models that can optimise and manage fleet operations. In the long term, this will increase productivity, benefiting businesses and end consumers who will experience more affordable, faster deliveries.

As this technology advances within the delivery space, optimised routes, enhanced planning capabilities, and a clearer understanding of customer needs all show significant potential for rapid change. These shifts will have wide repercussions across the mobility landscape in urban areas.  

Optimised and dynamic routing
Many couriers know their local neighbourhoods like the back of their hands. However, in large cities, couriers are often expected to go further afield into areas they may not know as well. This can make it more challenging to plan a route quickly–especially as delivery schedules are often packed to maximise volume.

Route planning tools powered by AI can support them, calculating the most productive path from pick up to drop off and presenting couriers with the most efficient delivery route at any given moment.

These routing algorithms continuously gather and analyse data in real-time, dynamically responding to unforeseen challenges, such as sudden traffic fluctuations or road closures, making them powerful tools for couriers.

More efficient routing also has the added benefit of reducing emissions as couriers travel shorter distances and spend less time in traffic.

Strong understanding of customers and couriers
In addition to measuring and adjusting based on external factors, AI can also play a significant role in customer satisfaction. For example, chatbots can interact with customers, providing more accurate, real-time updates about their delivery and handling their queries or complaints.

For business owners, using AI to handle time-intensive tasks, such as managing missed or lost deliveries, can free up significant time to focus on other priority tasks. AI is also able to analyse consumer interactions, producing a live feedback loop directly from customers to shine a light on specific pain points in the customer purchase and delivery journey. With this knowledge, business leaders can better adapt operations for improved customer satisfaction.

Furthermore, AI and machine learning will continue evolving to generate real-time courier behaviour predictions. Logistics companies can use specific algorithms to anticipate and influence driver positioning and optimise overall fleet productivity.

Looking forward
In this rapidly changing landscape, there is enormous potential for positive outcomes from the widespread adoption of AI. At Stuart, we have been using machine learning in our systems for some time, namely for route optimisation and carbon tracking.

While automating some processes through AI promises immense gains in precision, efficiency, and sustainability, measured steps are prudent. A thoughtful, multifaceted approach will mitigate any risks while ensuring that organisations can maximise the benefits of AI.

Investment in supportive infrastructure and equitable access will allow companies of all sizes to leverage AI, not just major players. It is important that all businesses—large and small—are able to reap the benefits of this technology. Policies and public-private initiatives should ensure that this capability is democratised rather than centralised.

The future looks bright for AI-enabled delivery, but we must build the foundations for broad capability today. Businesses must commit to developing inclusive AI tools that will continue to empower our delivery partners financially and operationally, thus continuing to improve the wider industry.

With responsible development and deployment, enhanced logistics can drive progress across the triple bottom line of sustainability, contributing to positive societal impact and commercial success.

John Gillan, UK general manager of Stuart