In today’s rapidly changing world, instant gratification is becoming mainstream, logistics is one industry that is at the forefront driving the change. In general, people are getting conditioned to being online 24/7 which has led to shrinking patience levels and a growing appetite for ‘here-and-now’ solutions.
Logistics is a function where the demands can be highly volatile and businesses, especially ones in e-commerce and shipping where instant gratification has become an entitlement for all stakeholders - from customers to logistics professionals.
Given the scale at which logistics operations is getting increasingly demanding and complex, businesses are adopting automation to make operations scalable and manageable. This manifests in many forms and shapes depending on the leg of the process -
- first, mid and last mile,
- the stage - warehouse, DC, en-route, on-return
and several other factors. For example, the use of autonomous robots at warehouses for moving bulky shipments within the warehouse is a common use-case of automation at the warehouse. Another widely adopted technology across the entire spectrum of logistics is chatbots.
What are logistics chatbots?
Today, the world is quite familiar with chatbots as a computer program that can be configured to have human-like interactions using the internet. However, the realm of chatbots have transcended that oversimplification and have evolved into one of the most advanced technologies making lives easier, especially in the context of logistics and supply chain.
Logistics and shipping chatbots are specialised and customized to support problems specific to movement of goods from one place to another. The most common use-case for logistics and shipping chatbots is typically in customer service and order tracking.
However, it is seeing a major shift and entering other areas including critical operational parts like the control tower.
Why should businesses consider mainstream adoption of logistics and shipping chatbots?
The scale of logistics operations is increasing at a pace it has never seen ever before in history. Trends like quick commerce, entry of regional e-commerce players to global markets and the vice-versa, the proliferation of the gig worker economy, the rapidly increasing crowdsourcing in logistics have taken the scale of logistics operations to unprecedented levels.
While this is great news for the economy and driving consumerism, the labour economy is caught in the backfoot to keep up with this surging growth. Companies that heavily depend on logistics - shipping companies, retailers, carriers, freight forwarders etc. are grappling with severe challenges on the labour front and the non-availability of adequate skilled workforce to meet this burgeoning demand.
Transportation chatbots are a major relief for these businesses to automate whatever they can to service their customers and ensure they are able to keep the operations running.
How can businesses adopt chatbots in logistics and shipping?
Modern day chatbots are powered by a centralised technology platform that is configurable and can seamlessly plug and play with existing systems. This can be done in a variety of ways like API integrations, pre-configured connectors, to name a few.
By integrating securely within the systems of shippers, transportation chatbots can fetch relevant operational data that might be needed to service the use-case.
Modern chatbots have built-in machine learning capabilities thereby elevating their ability to be trained by manifolds. This extends their capabilities to perform complex functions and problems thereby allowing them to be used in a wide range of critical logistics operations including mission-critical and highly sensitive ones. Transportation are not just restricted to answering customer queries alone and serve a bigger role in the larger landscape.
Key use-cases of logistics and shipping chatbots
Here is a set of key use-cases where transportation chatbots are used to manage logistics operations:
1. Customer service - WISMO
This is by far, the most traditional, common and widely used scenario for logistics and shipping chatbots. Shippers are expected to keep customers notified about the delivery ETA and update it from time to time. Anticipation anxiety is real and shippers need a multi-pronged approach to handle it.
Typically, a tracking link is pushed through SMS/email/Whatsapp and by clicking on the link, customers can view the real-time statuses of their orders.
However, humans prefer human interaction via a chat-like interface and this trend has significantly grown after the mainstream adoption of Instant Messaging tools like Whatsapp, WeChat, Line and BOTIM. So, chatbots are a natural fit in this scenario considering companies can get anywhere in the range of dozens of hundreds. Given that 50% of customer service calls are order status or WISMO (Where is my order) calls, automation in this area can save companies millions in customer service functions.
The chatbot can pickup transactional data such as driver details, ETAs and more, with much improved speed and accuracy and eliminates any room for human error, wait-times and improves the customer experience by leaps and bounds.
2. Driver Operations - Voicebots
Quick commerce:
Quick commerce is on a quick rise!
While this brings convenience to our lives, it is not without its perils. A major area of concern globally is the direct impact it has on motorcycle accidents, which is rising as the industry grows.
One of the key factors for these accidents is the use of a mobile phone while driving whether it is answering calls or looking at the navigation and not being able to focus on the road.
This is a very practical area where logistics chatbots can have a life-changing impact. By giving driving directions using voicebots and further using them to automate template responses, the chances of accidents can be significantly reduced.
Logistics chatbots can intelligently provide turn-by-turn navigation instructions, and at times, even optimize it based on traffic conditions and road closures etc. ensuring that the drivers can take the most optimized path, powered by integrations with route optimization platforms.
Heavy-duty trucking:
This is not just restricted to motorcycles and bikes. Voice chatbots are seeing an adoption even in the trucking and freight industry where drivers of large 12-wheel heavy duty trailers need to pay special attention to trailer gaps and being distracted on the phone can pose huge risks.
By integrating with the audio console of these trucks and trailers, the voice bots can provide navigation instructions to drivers thereby helping improve road safety.
3. Inbound visibility in warehouses
Planning yard and dock operations for loading and unloading is a complex process. The wait times can be significantly higher at loading and unloading stations if they are not properly planned.
Managers of yard and docks need clear and accurate inbound visibility of incoming trucks and this can be automated to a great degree by equipping them with shipping chatbots. These chatbots can pull real-time ETA information from inbound trucks and ensure it is readily available for yard managers to plan operations seamlessly.
In addition, this can also serve as a tool to facilitate other important communication that includes priority handling, sensitive goods and several more depending on the nature of shipments thereby serving a purpose that is beyond just ETA updates.
4. Freight procurement
Shippers and carriers typically operate under a lot of pressure and managing capacity is a cosntant challenge. It is a common industry practice to subcontract delivery and transportation operations to multiple smaller carriers and this selection process can be cumbersome when done manually.
By leveraging automated freight/carrier selection and interfacing it through logistics chatbots for dispatchers and transportation planners, this can be significantly simplified. This also allows cost-effective selection of rates, reduces the time it takes to procure new freight and makes the entire process of capacity building much more data-driven and seamless.
5. Invoicing operations
Invoice reconciliation can be a big task for finance teams. This needs a lot of effort sifting through voluminous transactional data, verification and checks.
By leveraging automation and chatbots to answer queries, it significantly reduces the time taken for invoice reconciliation.
This accelerates payment cycles and helps build healthy shipper-carrier relationships which is critical to smooth functioning and achieving scalability of operations.
6. Control tower
This is by far the most sophisticated area where logistics chatbots have penetrated and are seeing successful adoption. Although the underlying technology is a highly complex chatbot, these serve as AI agents handling complex workflows and making decisions to optimize supply chains.
A Control Tower, as the name suggests, is the nerve centre of a supply chain and is used to monitor operations from end to end. When disruption strikes that can make things go for a toss, interventions happen from the control tower to control the damaging effects of the disruption, maintain operational continuity and honour committed SLAs.
AI agents in Control Tower can be programmed to handle a variety of alerts and disruptions by training them to dictate contingency plans and corrective operations. Stakeholders from multiple functions across the different endpoints of the supply chain can leverage the help of these AI agents to ensure smooth running of operations.
Benefits of logistics chatbots
Chatbots are not an option anymore and in the future, they are as critical as any moving part of logistics operations. They offer a host of other benefits such as:
1. Cost optimization
A simple calculation reveals that about 60 customer service reps are needed to service 100,000 queries in a month. Given the scale at which businesses operate, this is a very conservative estimate.
The monthly cost of running a service centre just to service these queries in the US costs about $200,000 monthly. By automating this using chatbots, companies can save over $2 Million USD annually.
Thus, for just one use-case in customer service, chatbots can help companies save significant operational costs. The wider the adoption, the wider the saving.
2. Instant support
The hardest part for customers while they are undergoing severe anticipation anxiety is long wait times and annoying IVRs to even get to a real human to find out an order status.
This can hamper customer experience significantly and be a frustrating experience.
With chatbots, businesses can guarantee instant support with near-zero wait times which not just saves time for all but a lot of mental energy. This is a major differentiator brands need to build to tackle the complex and highly competitive markets where it is such an easy choice for customers to abandon a brand and move on to a better option.
3. Improved accuracy
Chatbots eliminate the scope for human error and can provide more accurate, precise, unambiguous information. This helps build significant brand loyalty and also saves precious time in back and forth communication arising due to human error.
4. Freedom from delimiting demographics
Chatbots can be configured in multiple languages. This has a significant impact in adoption especially in logistics and supply chain where workers can be from multiple places speaking in multiple languages.
This allows the business to quickly free itself from limitations arising out of language barriers and allow them to scale without restrictions.
5. Easy to Scale
Chatbots offer businesses a faster way to scale. Given the areas that we have seen where they can be employed in logistics and supply chain, they help businesses execute high-volume and high-complexity tasks faster.
It helps create a win-win situation for all stakeholders and paves the way for faster scale and growth,
Best practices for chatbot implementation
While chatbots can be significantly beneficial to organizations, a lot depends on how well they are implemented. A hasty approach to chatbot adoption can create new problems and challenges for an organization. Hence, careful planning and implementation are non-negotiable when it comes to logistics operations.
1. Customizations
A key factor to consider while implementing logistics and shipping chatbots is their ability to allow customizations. Logistics is highly agile and a one-size-fits-all approach is never effective. Even with the landscape, there are multiple stakeholders, personas, processes and operational styles that need to be factored. A chatbot platform that offers extensive customization is an ideal choice.
2. Data management
A large volume of transactional data is involved when using transportation chatbots for logistics operations. A lot of it can come under tricky regulatory frameworks like PII laws, Data Protection Act and GDPR compliances and several more.
There are strong governances regulating the usage and storage of information especially when it comes to individuals. A clear strategy where all parties agree as to how long these platforms would store data and how this data will be used needs to be factored clearly. It is also essential to be completely transparent with the Data Policy to customers to avoid any potential legal implications.
3. Stability atsScale
A chatbot in logistics will need to have resilience to handle millions of queries and still be able to function simultaneously without speed issues and sluggishness. Logistics is becoming an increasingly instant gratification business and shipping chatbots are at the face of it. Hence, any delays due to overwhelming volumes of data or technical snags are never good news. Downtime is the big bad word in this context and can have acute ramifications from indemnities to penalties. Hence, ensuring that the chatbots can scale with stability is a critical step.
4. Plug and play integrations
The chatbot needs to seamlessly integrate with Warehouse Management Systems, Delivery Orchestration Platforms, Carrier Networks and several platforms to get harmonized visibility and data. This needs to be secure and easy to manage. This is critical to the success of the initiative.
Challenges in Adoption of logistics chatbots
While there are some constraints and non-negotiables, there is also a set of challenges that need to be overcome and managed while adopting chatbots for logistics.
1. Loss of Personalization
This is arguably the biggest downside when it comes to implementing chatbots especially in customer-facing functions. The right balance between automation and personalization is hard to achieve and businesses are still figuring this out. The increasing influence of AI is solving this to a great extent. Yet, there are miles to go to create near-human- experiences using chatbots.
2. Driving Adoption
In warehouse and freight management use-cases, driving adoption can sometimes be a challenge. People are conditioned to function a certain way for decades and to make them change their styles although it makes life much simpler for them can sometimes be hard. Incentivising the usage initially could be one of the ways to overcome this challenge.
3. Transitioning
Chatbots, as we have seen, are used in core operational areas which affect day-to-day operations. Transitioning from a current system to a new system without having downtime is a challenge. This needs very careful planning and timely execution.
4. Onboarding & Deboarding
Onboarding users and deboarding users when switching from one platform to another is a challenge. This needs planning, extensive and repeated communication, training and several other steps.
5. Learning Initiatives
The extent to which a chatbot can be trained is also sometimes a limiting factor. Today’s chatbots are designed to learn fast and adapt. However, it is a continuous process and as new use-cases and processes evolve, the chatbots need to be trained on them repeatedly.
Future Trends & Opportunities
Although a lot of use-cases are outlined, customer service seems to be the dominant use-case. Driving adoption of chatbots in other areas is largely seen in visionary companies and this subset is still a small subset as compared to the larger ecosystem. This leaves a vast majority of organisations at the brink of many opportunities to drive internal adoption.
Chatbots are fast evolving and the future trends are heading towards predictive AI-based support models where scenarios are predicted and handled before they actually occur. This saves businesses from a ton of undesirable outcomes that can be hard to manage.
Dispatch fast but respond faster with logistics chatbots
Chatbots are a life-saver for logistics and shipping operations by being able to help them scale faster and still maintain customer relationships, vendor relationships and internal stakeholder collaboration. Gone are those days where they are an optional customer service application and given the scale at which the logistics industry is revolutionizing itself, shipping chatbots are an essential pillar that have use-cases and applications in several core functions.
Platforms like Gallabox are built for catering to such complex requirements. They are yet simple to implement, offer enterprise-grade scalability, extensive integrations and superior support and have won the trust of tens of thousands of users.
To explore logistics and logistics chatbots for your business, click here.
FAQs about logistics chatbots
How can chatbots improve customer experience in logistics?
Chatbots can improve customer experience in logistics in several ways such as eliminating wait times and lengthy IVR systems by offering instant resolution. They also have the ability to cater to a diverse set of customers through multi-language support. They can support a large set of concurrent users simultaneously and reduce operational complexities. They also can provide more accurate and real-time information instantly.
What are the limitations of logistics chatbots?
The biggest limitation is loss of personalization. Logistics operates on human to human trust in many parts of the world. With automation and chatbots replacing human interactions, there is an unavoidable loss of personalization.
Can chatbots assist with internal logistics operations?
Yes. There are several internal operations in logistics where chatbots can assist. Some examples are freight procurement, inbound visibility to warehouse managers and freight procurement. One of the advanced areas where chatbots are now used is the Logistics Control Tower.
