Using AI to transform logistics

Artificial intelligence (AI) is not the future of goods transport, according to Udom Srisongkram, managing director of logistics service provider V Cargo, because AI-driven logistics is happening now.

The technology speeds up work, reduces costs, produces precise outcomes, requires less (or no) humans, and can help operators get through uncertainties such as a sluggish economy because of the pandemic, which has lengthened and intensified the market slowdown.

Mr Udom is urging other goods transport companies to start thinking more seriously about deploying AI. He shared his experiences with the Land Transport Federation of Thailand after many operators suffered a sharp drop in revenue because of lower sales in the retail business, which represents their main clients.

Smart fuelling

Earlier this year V Cargo began its biggest experiment by launching a smart petrol station at a time when the government urged people to avoid crowds and reduce close contact.

The facility, which supplies oil to V Cargo's fleets of trucks in Ayutthaya's Wang Noi district around the clock, does not need dek pam, or an oil refilling staff. It only requires a smartphone and computer software, which calculates the amount of fuel needed for a trip.

A driver simply uses a phone with a QR code holding information such as fuel usage scanned, then identifies himself through a fingerprint scan. He will then be allowed to use an oil nozzle, which is also designed to pour at a faster speed than those at ordinary petrol stations to save time.

All processes will be recorded and sent to V Cargo executives through Line and CCTV footage to monitor and manage oil stocks.

The company spent 3 million baht building its own oil tanks linked to the digital system to reduce costs and better compete with its rivals because buying oil directly from suppliers saves 3 baht a litre.

Usually the trucks consume nearly 300,000 litres a month, so to calculate how much money the company can save, we multiply it by three, he said.

V Cargo plans to build a second smart petrol station on Bang Na-Trat Road, following the successful outcome of the first station.

"Any delay will only result from waiting for an auspicious time to open it," joked Mr Udom, referring to Thai astrology.

The smart station has prepared his company to fully enter the fourth industrial revolution, which emphasises advanced technology and high-level services, he said.

Heart of logistics

The success of the smart station confirms the company is on the right track by using computer software, the transport management system (TMS), to take full command of its logistics services.

TMS plays a key role in connecting the smart station and mobile phones.

"The heart of our transport is technology," the V Cargo founder said. "The technology differentiates V Cargo from other firms, all of which have the same look and role as operators of goods trucks."

TMS helps his company better deal with the complexity of arranging its 1,000 vehicles to transport huge amounts of products, allowing executives to track work on computer screens to closely monitor trucks from an office, an almost impossible task decades ago.

Another software program, vehicle routing problem (VRP), plans the most suitable routes for goods transport, saving the firm time, cost and human resources.

"VRP uses AI. It tells us what roads we should avoid," said Mr Udom.

"I can also monitor how many jobs are completed. A red sign here shows a problem, so I can click to see what has happened."

He pointed to rows of numbers displayed by TMS on his tablet.

The 32-year-old firm was introduced to TMS when it started delivering for the Government Pharmaceutical Organization dialysis solutions to patients' homes, which require careful and punctual delivery.

Business expansion to work with e-marketplace giants required a further software upgrade.

"I was not reluctant to invest in technology," said Mr Udom.

The right choice of technology helped drive the company forward. Its TMS is based on an open standard version, allowing the company to easily apply it to new digital transport services in the future.

Getting smarter

V Cargo plans to improve TMS to further reduce or prevent transport problems as well as diversify its business to e-commerce super-platforms.

More AI technology will be used for forecasts, to predict which trucks are likely to encounter problems without waiting for a report to take action, he said.

Mr Udom believes these kinds of predictions are possible if AI is fed enough data.

"We've compiled a huge amount of data on goods transport," he said.

V Cargo also intends to build an online platform matching small sellers and buyers under a customer-to-customer business model, combining TMS, transport data and trucks with a focus on bulky items like electrical appliances and furniture.

Small retailers, not mall giants, will play an increasing role in the 4.0 age and V Cargo will satisfy their demand. "The C2C platform will require no humans," said Mr Udom.

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