AI Conquers Peak Season Challenges
The holiday season is just around the corner, and for the supply chain industry, that means one thing: peak season. It's the most critical time of the year, but it also brings a perfect storm of complications: extreme weather, persistent labor shortages, and a concerning rise in cargo theft. How can companies navigate these treacherous waters while maintaining safety and efficiency? According to a recent webinar hosted by Samsara, the answer lies in a crucial investment: Artificial Intelligence. Let's explore how AI is transforming these significant challenges into remarkable opportunities for resilience and growth!
One of the most immediate impacts of AI in the supply chain is its ability to revolutionize demand planning and forecasting. Dr. Ilya Jackson, a research scientist at MIT’s Center for Transportation and Logistics, highlighted a McKinsey report noting that generative AI could unlock over $190 billion in value across travel and logistics, with an additional $18 billion specifically from supply chain and operations management.
How does this translate to real-world benefits? MIT research, in partnership with consumer packaged goods manufacturers, demonstrated that integrating AI and machine learning can improve forecasting accuracy by an impressive 11 percent.
- Example: Imagine a large retailer preparing for the holiday rush. Instead of relying solely on historical data and educated guesses, AI systems can analyze vast datasets—including social media trends, local weather forecasts, and even competitor pricing—to predict consumer demand for specific products with unprecedented accuracy. This allows them to optimize inventory levels, reducing costly overstocking of slow-moving items and ensuring popular products are always in stock, leading to significant cost savings and happier customers.
Labor shortages have been a persistent headache for many industries, but companies are finding innovative ways to build more resilient workforces. United Natural Foods Inc. (UNFI), for instance, has shifted its focus from seasonal hiring pressures to cultivating stable, cross-trained teams.
Tehzin Chadwick, Senior Vice President of Safety at UNFI, noted that while hiring pressures have eased slightly, they're now focused on "building a stable, cross-trained team that can flex with those changing business demands." To support this, UNFI is starting seasonal hiring earlier and leveraging AI-powered tools to recommend personalized learning pathways for associates. This not only accelerates skill-building but also fosters a sense of opportunity and belonging.
Sanjit Biswas, CEO and co-founder of Samsara, echoed this sentiment, observing high rates of labor turnover in frontline industries. He highlighted how AI-powered mobile applications can make demanding jobs safer and more manageable by simplifying workflows, maintaining safety standards, and even recognizing when workers might need a break.
- Example: A new delivery driver joining UNFI during peak season might use an AI-powered onboarding app that customizes their training based on their prior experience and the specific routes they'll be covering. The system could recommend modules on cold chain logistics, safe lifting techniques, or even local traffic patterns. During their shift, the app might provide gentle reminders for breaks, helping to reduce fatigue and improve overall safety and job satisfaction.
Winter weather during peak season poses significant risks. Data shows that 1 in 5 crashes occur on slick surfaces, making proactive safety measures paramount. UNFI has adopted a multi-layered approach, with AI playing a central role.
Chadwick explained that UNFI has upgraded its weather monitoring tools, integrating real-time alerts directly into their vehicle telematics systems. This provides dispatchers and supervisors with a live fleet map overlaid with current weather conditions. The technology from Samsara goes a step further, providing drivers with in-cab alerts about hazardous conditions—a "game changer" for safety. AI can assess weather risks at scale, anticipating potential hazards for thousands of drivers and providing voice feedback.
Furthermore, AI-powered alerting systems are crucial for night driving, where visibility is compromised and, according to NHTSA statistics, about one in two fatality accidents occur.
- Example: A truck driver is heading through a region known for sudden winter squalls. The Samsara system, powered by AI, analyzes real-time road conditions, local forecasts, and even sensor data from other vehicles in the area. It then issues an in-cab voice alert: "Warning: Icy patch 2 miles ahead. Reduce speed." This granular, immediate feedback allows the driver to react proactively, avoiding potential hazards long before they become visible, significantly enhancing safety for both the driver and the community.
Cargo theft has become an "endemic problem" in the United States, with annual losses estimated at a staggering $35 billion, according to Janelle Griffith, North American logistics practice leader at Marsh. These thefts, which typically peak from Thanksgiving through January, target high-value retail items and even food and beverage products.
Griffith emphasized that modern cargo theft is far from opportunistic; it's "planned, it is orchestrated, and it’s done by virtue of theft rings that are all tech-enabled." This is where AI steps in. From a risk management perspective, AI helps remove uncertainty by providing added insights. It can assist with identity verification and regulatory compliance monitoring, offering better data for insurance underwriting.
- Example: A high-value electronics shipment is en route. An AI-powered security system monitors the truck's GPS data, driver behavior, and even external threat intelligence. If the truck deviates from its planned route, stops in an unapproved location for too long, or if the driver's biometric data doesn't match the authorized individual, the AI can immediately flag the anomaly, trigger an alert to security teams, and even remotely disable parts of the vehicle, thwarting tech-enabled theft rings in real-time.
Q1. What are the three primary challenges AI is helping supply chains address during peak season?
A. AI is helping address extreme weather, labor shortages, and rising cargo theft.
Q2. How does UNFI utilize AI to enhance workforce agility?
A. UNFI uses AI-powered tools to recommend personalized learning pathways, accelerate skill-building, and support cross-training, helping to build a stable and adaptable team.
Q3. What is the estimated annual financial impact of cargo theft in the United States?
A. Cargo theft is estimated to cause annual losses of $35 billion in the United States.