AI-Powered Logistics: Saving Money and the Planet

A I • Apr 24,2024

Implementing its AI-powered route optimization system, a logistics company achieved significant improvements: a reduction of eight miles per driver in annual delivery routes and a 100,000 metric ton decrease in carbon footprint.

Client:

Launched in 1907, United Parcel Service (UPS) stands at the forefront of global supply chain management and logistics. Headquartered in the United States, UPS boasts an annual revenue of $71 billion and delivers to over 175 countries. The company offers various logistics services, including package delivery, freight forwarding, customs brokerage, and global supply chain solutions. With a vast network, UPS effectively meets customer demands by leveraging over 125,000 vehicles and nearly 500 owned and leased jets. This enables them to process an impressive volume of close to 300 million tracking requests daily.

Problem Statement:

UPS faces a significant challenge in optimizing delivery routes. With each driver making 120 to 140 stops daily, the number of potential routes becomes astronomically large. Due to its complexity, manual route planning becomes unattainable, resulting in inefficient routes that increase fuel consumption and environmental impact.

Results:

Reduced Delivery Miles: 100 million miles annually.
Reduced driver routes by 8 miles per driver.
The new AI system is used by 97% of the UPS vans.
Lower Carbon Footprint: 100,000 metric tons of carbon emissions saved.

AI Solution:

UPS has successfully integrated ORION (On-Road Integrated Optimization and Navigation), an AI-powered logistics platform, into its operations to optimize delivery routes.

The company leverages machine learning to analyze a large amount of data – customer details, traffic patterns, and even weather – to optimize delivery routes for drivers. This allows for real-time adjustments based on changing conditions, ensuring the most efficient package delivery possible.

Implementing the ORION platform significantly reduced drivers’ annual mileage, leading to substantial cost savings and beneficial environmental impacts.