Scott Ginsberg Head of Industry, Performance Marketing
Sonal Jain Vice President, Associate General Counsel
Richard Han Vice President, International Sales
Scott Ginsberg Head of Industry, Performance Marketing
Sonal Jain Vice President, Associate General Counsel
PENSKE
While capacity cuts could potentially prop up freight rates, most industry observers are forecasting further declines.
Machine Managers
Gartner projects that 5 percent of supply chain managers will soon have robots as their charges.
The Humanoid Warehouse?
Experts believe the AI-based technology used to train humanoids might be put to better use inside robots with different form factors —at least in the warehouse.
Loading Time
Walmart and Target lean on agentic AI and cargo-tracking tech to speed deliveries, while freight tech startups rebound with fresh funding and more acquisitions.
Four on the Floor
Hardware and software continue to provide efficiencies in the warehouse.
Seizing the Wheel
Manhattan Associates research shows the majority of transportation leaders believe agentic AI will act for them by 2030.
Lofty Expectations
According to the U.S. Bureau of Transportation Statistics, seasonally adjusted rail freight carloads have dropped off substantially since 2008.
Leaders and Laggards
Inspectorio’s research shows the supply chain industry is behind the curve when it comes to technology adoption.
Cost inflation triggers like U.S. fees on China-built ships, tariff fallout and capacity cuts could potentially prop up rates, but most signs point to further declines. by Glenn Taylor
freight rates thus far in the second half of 2025 have been characterized by a constant decline on the heels of tariff whiplash that largely dominated the April-to-June stretch and ultimately upended (and cut short) the typical Augustto-October peak shipping season. Multiple indices tracking ocean freight rates have shown declines persisting since a dramatic spike in early June, when shippers were scrambling to access space on container ships after the U.S. and China rolled back their triple-digit tariffs for 90 days. Drewry’s World Container Index (WCI) declined 4.3 percent to $2,250 per 40-foot container as of Aug. 21, marking the 10th straight week the index sloped downward. Since June 12, spot freight rates on the WCI have declined 36.5 percent.
The declines are substantially more pronounced on the trans-Pacific trade lane from their early June peaks. Shanghai-to-Los Angeles rates have plummeted 59.2 percent, while New York-bound containers cratered 52.5 percent.
Drewry expects spot rates across the board to be less volatile in the coming weeks, especially as retailers are expected to scale back procurement amid the increased tariff costs since they kicked in for most countries Aug. 7.
“Drewry forecasts that spot rates will decline in the remaining four months of the year. But, as we have learned since Covid, many potential disruptions or market changes could bring spot rates back up again,” Philip Damas, founder and head of Drewry Supply Chain Advisors, told Sourcing Journal. “The current known potential cost inflation triggers are the new U.S. fees on China-built ships, renewed port congestion and traffic volume swings, as we get near the end of the tariff ‘pause’ on U.S. imports from China.”
With a new China tariff deadline of Nov. 10, shippers could still look to pull in more last-minute goods in October. Rates could still shift depending on the trade route and origin country of the product as the costs of U.S.levied tariffs further kick in.
“For some countries that have reached trade agreements with the U.S., tariffs meant to be reduced or removed on many types of goods are still being collected as implementation conditions still need to be fulfilled or details of the deals are still being hammered out,” said Judah Levine, head of research at Freightos.
“These implementation lags mean it will take longer to see if the tariff changes impact freight volumes and rates.”
NO TRADITIONAL PEAK SEASON IN 2025
Another freight rate benchmarking platform, Xeneta, calculated a decline of 2.3 percent to $1,910 per 40-foot container from Asia to the U.S. West Coast on Aug. 20, along with a 1.9 percent dip on Asia-to-East Coast routes to $3,009 per container. Since their June peaks, West Coast-bound and East Coast-bound containers have declined 65.5 percent and 57.3 percent, respectively.
“With a continuing trend for increasing capacity on front-haul trades and subdued ocean container shipping demand, spot rates will fall further in the coming weeks,” said Peter Sand, chief analyst at Xeneta. “Shippers should not fear peak season surcharges because, quite simply, there is no traditional peak season in 2025.”
Sand pointed out that average spot rates are now at their lowest level since the end of 2023, before the Red Sea crisis kicked in and took more shipping capacity out of rotation due to lengthy transits around Africa. But like Drewry, Xeneta doesn’t expect the rates to reach a floor just yet.
“The rate of decline may have slowed from the dramatic drops in July, but this gradual erosion will continue because there is still room for spot rates to fall further,” Sand said.
CARRIERS RESIST CAPACITY CUTS—TO THEIR OWN PERIL?
An Aug. 25 market update from container shipping consultancy Linerlytica said prospects for a September rate rebound are “vanishing quickly as carriers continue to resist capacity cuts to match the drop in demand.”
Depending on the trade lane, Linerlytica said that cargo booking volumes have fallen by between 5 percent to 20 percent from the two weeks prior with the trans-Pacific, Asia-Europe and Latin America routes all under heavy pressure.
Despite the sharp decline, Gemini carriers Maersk and Hapag-Lloyd have committed to a no-blank sailing policy on their core services, largely ignoring the rate slide as they continue to prioritize volumes over freight rates.
“October could prove to be the turning point as carriers will need to make drastic capacity cuts by then to prevent a complete collapse in freight rates,” Linerlytica said, noting that the total container ship orderbook has reached a record high 10.4 million TEUs— thus feeding to wider overcapacity concerns that could further sink freight rates.
The orderbook represents 31.7 percent of the total container shipping fleet, the highest such levels since 2010. There is still more than 1 million TEUs of pending ship orders that are due to be added before the end of this year.
OCTOBER COULD PROVE TO BE THE TURNING POINT AS CARRIERS WILL NEED TO MAKE DRASTIC CAPACITY CUTS BY THEN TO PREVENT A COMPLETE COLLAPSE IN FREIGHT RATES.” Linerlytica
SPOT VS. CONTRACT DILEMMA
As ocean freight rates continue their ongoing descent, shippers ultimately will have to weigh whether they will pay the spot market or enter a contract.
“Shippers looking to sign new long-term contracts have much to consider because they must balance where rates are right now, where they are likely to be in 2026 and how much of an impact the ongoing conflict in the Red Sea conflict should have on the rates they are paying on each trade,” said Sand.
According to Damas, based on the ocean bids which Drewry runs for shippers, importers and exporters can secure more attractive, lower contract rates in the current market. But there’s no guarantee they’ll get a better rate by waiting.
“Spot rates on some lanes are even lower than contract rates, but they may not last and imply a high risk of cost volatility,” Damas said. “It is usually better for a company with steady shipments and a need for predictable supply chain costs to negotiate a contract (with customized terms and conditions) than to rely on the spot market and standard terms and conditions. Some importers are now even buying their products on delivered duty paid terms, requiring the origin factories to arrange and pay for transportation.”
Gartner projects that 5 percent of supply chain managers will soon have robots as their charges.
gartner projects that one in 20 supply chain managers will oversee robots, not humans, by 2030. The firm said that while robotics and automation are being adopted at a rapid clip for warehousing and logistics use cases, chief supply chain officers said that their organizations don’t have the internal expertise needed to reap the full benefits of emerging technologies. Federica Stufano, senior principal analyst at Gartner, said that, particularly as robotsas-a-service (RaaS) models, which effectively allow companies to rent robots as part of a subscription-based contract, will only increase the need for humans to oversee robots in the warehouse.
Stufano said, ironically, the robot-managing jobs are in large part stemming from a labor shortage in the warehousing realm.
“Recently, we’re talking more about labor shortages and labor prices, so that’s the first reason why we see more resources for smart robotics being deployed,” she explained.
Autonomous mobile robots, truck-unloading robots, pick-and-pack robots and sorting robots are just a few examples of the varying types of technology working to create the warehouse of the future. Gartner asserts that such a broad array of capabilities—which seem to be constantly changing and being upgraded, especially in the age of RaaS’ rise— will demand a more acute focus on how those systems interact with one another and work toward business goals.
While experts can agree that robotics and automation continue to gain steam in the warehouse for myriad use cases, they had mixed thoughts on Gartner’s assertion that some human managers will spend all their time dedicated to overseeing robots.
Ann Marie Jonkman, VP, global industry strategies at Blue Yonder, said that Gartner’s projections are largely probable, but require a bit of nuance.
“Gartner’s projection that one in 20 supply chain managers will oversee robots as their main job function is a reasonable expectation, given the rapid advancements in robotics and automation technologies,” Jonkman said. “However, it is unlikely that this will encompass their entire role. While automation and robotics significantly enhance costefficiency, accuracy and speed in warehouses, human workers remain more adaptable than even the most advanced robotic systems.”
Other experts agreed. Even the largest companies deploying robots in warehouses and fulfillment centers, like Amazon, which has deployed over one million robots globally in its facilities, seem to put an emphasis on human involvement and collaboration with technology.
After all, Joe Hudicka, supply chain expert and professor at Rider University, noted,
unless human involvement in the supply chain is actively preserved, the very same companies trying to cut costs could see consumers unable to spend on the goods they’re hawking.
“If people don’t have jobs, they can’t buy the goods that robots are moving. My bet is we’ll continue to see far more jobs that rely on human interaction than ones that don’t. We need a more human-centric way of thinking about this shift,” Hudicka told Sourcing Journal.
Christopher Smith, CEO of Slip Robotics, which makes robots that can rapidly unload trucks, said even the most advanced deployments often have humans in the loop. He agreed with Jonkman’s assessment that managers handling robots will split their time interfacing with technology and working with people.
“Most facilities will evolve into hybrid environments, where managers are overseeing both people and robots together. In practice, the job of a supply chain leader is becoming less about direct supervision of human labor and more about orchestrating systems, and robots will be a key part of that system,” Smith told Sourcing Journal.
But even if managers aren’t solely overseeing robots, wrangling technology systems could still be a major change for those whose jobs are not highly technical today. Stufano said organizations will need to handle change management as gracefully as possible. She said that, for some employees, there will be a learning curve associated with shifting into these roles, and companies need to have strong governance processes in place to help them along.
In its report, Gartner recommends that organizations create a specific robotics center of excellence focused on moving robotics adoption forward; follow a “robust” strategy for automating their warehouses; bring all major leaders along on the implementation process and ensure proper governance structures remain in place throughout deployment.
Stufano said these strategic moves can help organizations find real use cases for technology, rather than using technology for technology’s sake.
Part of that change management will require upskilling as much as 5 percent of the supply chain workforce in a big way, if Gartner’s projections prove out.
by Meghan Hall
Vince Crimaldi, EVP, retail market unit leader at Capgemini, said leaders should invest in supporting employees through the cultural change that can come alongside implementing mass amounts of technology to ensure that technology truly can remain a “force multiplier,” rather than detracting from workforce sentiment.
“The shift from traditional labor to robot oversight is a profound workforce transformation. It demands a blend of digital and practical skills and must focus on foundational digital literacy, basic robot operation, troubleshooting and safety protocols,” Crimaldi said. “Soft skills like problem-solving, adaptability and cross-functional communication are equally critical, since these roles will increasingly require coordination between humans, robots and software.”
While many innovation initiatives require key performance indicators (KPIs) to measure against, Stufano noted that for robot deployments in the warehouse, companies’ leaders also need to take safety and worker sentiment into account.
MOST FACILITIES WILL EVOLVE INTO HYBRID ENVIRONMENTS, WHERE MANAGERS ARE OVERSEEING BOTH PEOPLE AND ROBOTS TOGETHER.”
Christopher
Smith, CEO of
Slip
Robotics
“Having a proper business case, which doesn’t rely only on return on investment to financial outcomes, but also on wellbeing outcomes and being able to justify the investment in front of unions, [makes] change management very important,” Stufano said.
Several unions have already made it clear that they intend to fight against workerreplacement technologies. Experts continue to tout warehouse robots as additive rather than replacements, but labor rights organizations and union organizers seem to have their doubts.
Peter Finn, managing director of industrial technology at Brown Gibbons & Lang, said Gartner’s warnings around worker safety need to be heeded. While that will need to be watched after as companies transition toward a more automated future, he said he expects to see industry standards helping leaders along.
“Overseeing robots does come with novel challenges; as an example, safety becomes and increasing focus as humans and robots increasingly work together within the same environments,” Finn said. “Though automated solutions can reduce risks relative to certain human operated tasks, the need for humans to increasingly interface and interact with machines will require the development of new safety practices and standards and training to ensure adherence to new protocols will become critical.”
DDHL SUPPLY CHAIN MANAGES all aspects of e-commerce fulfillment, and its vast global position also helps partners navigate uncertainties like tariffs and other disruptions. Here, Kraig Foreman, president of e-commerce, DHL Supply Chain, discusses how technology is enhancing its logistics even further.
SOURCING JOURNAL: How has DHL Supply Chain adapted learnings from past global supply chain disruptions to current and future logistics operations?
Kraig Foreman: DHL Supply Chain has become a leader in contract logistics at least in part due to our ability to help customers navigate change and outperform their competitors when it matters most. While we are always adapting our strategies to the current environment, those strategies are built on a foundation of preparedness and agility and supported by industry expertise and a culture of relentless execution. Our teams monitor trends, regulatory changes and other factors so we can anticipate risks and proactively adjust strategies to minimize disruption. Of course, not all events are predictable and that’s when the need for agility kicks in. We use standardized processes and technology across our network, which allows us to quickly make changes network-wide rather than reacting site-by-site. Like everyone, our capabilities were tested in 2020 and they passed that test. We were able to maintain continuity and quickly react to demand changes at a time when others in the industry struggled.
As e-commerce grows, how has DHL Supply Chain evolved? How does the acquisition of e-commerce fulfillment and retail distribution provider IDS Fulfillment help?
K.F.: Our fulfillment processes were refined over years of serving some of the world’s largest brands,
LEADING THE FUTURE OF FULFILLMENT
where volumes, demand peaks and customer expectations can be extreme. Now, we’re bringing that same level of expertise, operational excellence and service quality to midsize companies through our network of shared fulfillment centers. We’ve added over 1.3 million square feet of multi-client warehouse space in key U.S. locations. This will accelerate speed-to-market for midsize companies while providing access to the same advanced technology, standardized processes and experienced teams that have powered the success of our largest customers.
Simultaneously, we’ve vastly expanded our returns capabilities and are now the largest provider of reverse logistics in the U.S. Our capabilities optimize efficiency, returned merchandise value and the customer experience.
One byproduct of the growth in e-commerce has been higher return rates. How are you helping your customers minimize the impact of returns?
K.F.: We have extensive experience in returns management and have made investments to expand our reverse logistics capabilities. In fact, we are now the largest provider of reverse logistics in North America. Through our new DHL ReTurn Network, we provide our customers with dedicated, scalable infrastructure that helps them turn every return into
“OUR TEAMS MONITOR TRENDS, REGULATORY CHANGES AND OTHER FACTORS SO WE CAN ANTICIPATE RISKS AND PROACTIVELY ADJUST STRATEGIES TO MINIMIZE DISRUPTION.”
KRAIG
recovered value. With end-toend visibility and built-in flexibility, we give our customers the analytics and insight to process returns accurately. That means more efficient restocking, refurbishing and remarketing — and more environmentally responsible operations.
DHL ReTurn Network connects businesses of every size to a configurable infrastructure that adapts to volumes. Whether our customers are scaling up or streamlining processes, they have one clear view of their returns operations.
How is DHL Supply Chain leveraging robotics and other advanced technologies?
K.F.: E-commerce fulfillment is an ideal use case for warehouse robotics, and we were an early adopter of robot-assisted picking technologies, which have been deployed across our network. These systems, along with
goods-to-person automation solutions deployed at some sites, drive significant improvements in productivity and allow our operations to manage demand peaks with minimal impact on labor requirements. We worked with Boston Dynamics on the Stretch™ robot and pioneered that technology for truck and container unloading. We plan to deploy an additional 1,000 Stretch™ robots by 2030.
Our industry-leading visibility platform, MySupplyChain, provides end-to-end visibility of inventory, shipments and operational performance through a secure online portal, and uses advanced analytics to drive continuous improvement in forward and reverse logistics. We are aggressively integrating AI into our operations in the form of machine learning, agentic AI and gen AI. Companies looking to stay on the forefront of logistics innovation won’t find a better partner than DHL Supply Chain. ■
FOREMAN , president of e-commerce, DHL Supply Chain
Discover how we partner with fashion & apparel brands to take the uncertainty out of eCommerce fulfillment. Learn more
Experts believe the AI-based technology used to train humanoids might be put to better use inside robots with different form factors—at least in the warehouse.
by Meghan Hall
Humanoids present a number of challenges, experts noted—they have complex pieces liable to break; roboticists have yet to figure out issues with their battery life; they’re costly and more.
Experts said the artificial intelligence models and algorithms that train these robots could be better suited for autonomous mobile robots (AMRs) with different form factors; while standard, biped humanoid robots are impressive to look at, they lack some of the critical use cases they may need to perform at scale.
John Santagate, senior vice president of robotics at Infios, said that biped humanoid robots have seen a great deal of attention, but contends the real value could be in mobile humanoids or other robots on wheels, particularly where warehouse use cases are concerned.
“There’s been a lot of buzz…around biped humanoid robots, which are different than mobile humanoid robots. Bipeds are walking on two feet. The question I always ask
body. Many of the robots already working in warehouses are stationary robotic arms, mobile robots that operate via wheels or other kinds of stationary robots designed for just one function.
“Unlike simpler robots designed for repetitive tasks in controlled environments, humanoids must function in dynamic, humancentered spaces. That requires far more sophisticated AI for perception, behavior and even emotion, alongside advanced control systems,” Shern told Sourcing Journal.
Today, many humanoid robots struggle to handle multiple tasks simultaneously—and to reason or understand context in the ways humans can. Shern said that while humanoid
THE MORE AXES YOU ADD TO YOUR MACHINE, THE MORE IT BREAKS. EVEN IF IT’S SUPER RELIABLE, IT’S JUST AXIS ON AXIS ON AXIS, SO PROBABILISTICALLY IT HAS MORE CHANCES TO BREAK.” Romain Moulin, Exotec
someone is, ‘If you’ve got to get somewhere most quickly and most efficiently, are you using your two feet? Are you getting on a bicycle, skateboard, roller skates [or another mode of transportation] that has wheels?’” Santagate told Sourcing Journal.
Other experts agreed with Santagate’s assertion that biped humanoids may not be the most efficient way forward in warehouse robotics. While they acknowledged that, if some issues can be patched, humanoids have potential to disrupt warehouses, they also indicated that adoption at scale is far from a reality today for most adopters.
Jasper Platz, investor at growth fund G2 Venture Partners, said that, in general, companies want to use AMRs in unstructured environments, but today, many can only handle one-off tasks. Humanoids seem to be even more limited in what they can do at scale.
“Where we are on humanoids is definitely still in the demo pilot phase. From what we’ve seen, none of these systems have proven to be scalable commercially at scale,” he said.
Part of the reason for that is that because most companies say they don’t plan to replace human workers with humanoid robots—at least in the immediate near term—humanoids need to be able to work in high-mix, unstructured environments alongside, and sometimes directly with, human warehouse workers.
Jenny Shern, general manager at robotics company NexCobot, said that means that safety remains a major concern in these environments, particularly because human employees lack experience working alongside a robotic form factor that mirrors their own
robots have the potential to work on a handful of tasks in the relative near term, myriad questions remain on how to push this form factor to the next level.
“[These robots’] human-like form allows them to work with existing shelving, tools and interfaces, making tasks like stocking, item picking and basic customer assistance possible without major infrastructure changes,” she said. “We expect to see niche deployments within the next three to five years, particularly in settings with high labor turnover. However, widespread adoption will depend on improvements in battery life, safety certification and overall cost efficiency.”
Cost efficiency seems to be a major hold up, both for companies interested in piloting the technology and investors fueling the companies building humanoid technology. Santagate said that, as companies consider the type of automation they implement into their warehouses and operations, they need to better understand whether they’re bleeding unnecessary capital on complicated solutions, when they could be leveraging existing, simpler robotic options with similar underlying technology, powered by AI.
Because of the limited nature of many of today’s humanoids for practical, business-add applications, the cost per task likely remains high. Santagate said he feels it’s more likely that companies adopt biped humanoids in pilots and as holdovers for other technology while they work through their at-large strategy.
“You get to the challenge of the viability of [humanoids]. That robot costs three to four times, annually, the cost of a human operator.
So is it economically viable, whether or not it can do the task?” Santagate said. “I think we will continue to see adopters applying it in stop gap measures. I’m less bullish on the [idea that], ‘Oh, there are going to be 500,000 humanoids deployed by 2030.’”
In order to scale up humanoids’ ability to work in the warehouse, Platz said, companies will need massive amounts of data. The issue for many developing the robots is that, for physical AI—in this case humanoid robots— there’s a lack of publicly available, free data to train the robots on. While digitally simulating situations to train robots’ brains on what to do in a similar moment in the real world has helped with this hold up, and will likely continue to do so, Platz said some of the functions warehouse operators would like to see robots taking care of can be tedious to digitally replicate without a real-world example for the robot to learn from.
“Simulating, for example, soft fabrics is really, really hard…because these materials or these garments behave in ways that are very hard to simulate,” he explained.
Romain Moulin, CEO of robotics company Exotec, said he believes that the software and digital simulation behind training humanoid models have shown a great deal of promise over recent years, and noted that many companies— including Exotec—have started to integrate the AI-powered algorithms into robots taking other form factors. Exotec makes Skypod robots, which traverse warehouse shelves easily to help with picking and inventory.
He said one of the most major issues preventing humanoid robots from coming to life en masse for warehouse use cases is that, beyond being technically complex under the hood, their hardware is also complicated. Humanoid robots, because they are designed to mirror parts of the human body, have more axes—or joints—on them than many other form factors, like robotic arms or other AMRs do. Moulin said the addition of extra axes drive up the initial cost of building the robot, make it more difficult to power for long periods of time and even make it more risky for the warehouse.
“The more axes you add to your machine, the more it breaks. Even if it’s super reliable, it’s just axis on axis on axis, so probabilistically it has more chances to break,” he said.
In general, roboticists often try to skinny down the physical complexity of the robots they create, typically in an attempt to cut costs. The idea there, Moulin explained, is that when a customer purchases or leases a robot from a company, they have to pay for the hardware each time, while the software embedded in it comes at a fixed price because it doesn’t require physical materials to be put into use.
That alone could stymie the future starpower of biped humanoids, he said—if warehouse operators adopt robots with other form factors because they boast a lower cost-per-task ratio than their human counterparts, humanoids have the potential to be disrupted before they make a meaningful dent in the market.
“Hardware has a price. Software has no price—meaning, if you do very complex software and you spend hours and hours and millions on R&D, on training AI models, then having 10 customers or having 100 customers is almost the same price,” Moulin told Sourcing Journal. “Investors invest, most of the time, in software, so they are used to that mindset. When they go to hardware, they completely forget [that] each time you deliver [to a] customer, you pay for it. If you don’t deliver the simplest solution in hardware…someone else will come and have a simpler solution.”
ePost Global delivers flexible, sustainable logistics powered by technology and personalized service.
as demands for quick delivery and excess product availability continue to scale among con-sumers, retailers are seeking and building out more freight technologies to shorten the supply chain. c The 2025 Gartner Future of Logistics Survey found that 86 percent of supply chain leaders use at least one mainstream logistics technology with interspersed custom systems. c Walmart CEO Doug McMillon said he sees the retail giant capitalizing further on agentic AI capabilities to bolster the company’s supply chain—one that’s already seen significant enhancements in recent years due to automation projects at fulfillment centers and optimized delivery routing.
According to McMillon in the company’s August earnings call, agentic AI could be used to create “digital twins” of Walmart’s facilities, “which can help predict or prevent issues before they happen,” he said. McMillon also suggested that the “super agents” could create more accurate dynamic delivery windows for shoppers based on the product ordered and location.
Approximately one out of three deliveries from the store are now completed in three hours or less, the retailer says.
Chief rival Target has sought to bolster its last mile delivery operation not just through its focus on stores as fulfillment hubs, but by improving the efficiency of transportation between its warehouses and stores.
At the Manifest supply chain and logistics conference in February, Target’s chief supply chain and logistics officer Gretchen McCarthy said the company leverages tech within select
distribution centers that can sort cartons based on where they should be placed within each individual store destination. This makes it easier to speed up the trailer unloading process once the truck arrives at a Target location.
“If you ask any of the 2,000 store directors what is going to make or break their day, they will tell you it’s the trailer unload—when a trailer comes from one of our distribution centers,” said McCarthy. “That sets the tone for the day. These trailers have thousands of SKUs across up to 3,000 cartons, and it’s hard. It drives payroll, it drives potential safety issues and ultimately, it’s not very efficient.”
The success of freight tech implementations and developments across the retail supply chain may vary, depending on the function.
Apparel retailers like American Eagle Outfitters (AEO) and Gap, Inc. sought to assist other companies by providing third party logistics services capabilities of their
own, with the former acquiring Quiet Platforms in 2021 and the latter debuting GPS Platform Services a year later. But neither the “buy” nor “build” approach appears to have matched the initial hype.
AEO had to take a $119 million write down of impairment and restructuring charges related to the Quiet acquisition in fiscal 2023. Fast forward to May 2025, and the company revealed it was undergoing a “supply chain network optimization project,” which included the closure of two Quiet fulfillment centers in the first quarter.
For Gap, the apparel seller has been largely mum on the status GPS Platform Services since partnering with then UPS owned Ware2Go in early 2023 to provide outsourced warehousing for SMB clients.
Across the pond, Zalando has had more success as it pivots to a role of B2B fulfillment services providers for other retailers,
including U.K. based fashion seller Next. As part of its ZEOS fulfillment capabilities, the Germany based retailer operates 12 fulfillment and 20 return centers across Europe.
Zalando co-CEO Robert Gentz said during an August earnings call that ZEOS Fulfillment saw double digit revenue growth, which has helped drive the company’s overall B2B revenue by more than 12 percent.
FREIGHT TECH FIRMS ATTRACTING MORE SUITORS, MONEY
Outside of the retail atmosphere, there are signs that individual freight tech companies that power logistics capabilities for businesses are seeing an upswing after being beat down in recent years amid the freight recession. Throughout the freight recession, in which shipping demand has been outpaced by overall
IF YOU ASK ANY OF THE 2,000 STORE DIRECTORS WHAT IS GOING TO MAKE OR BREAK THEIR DAY, THEY WILL TELL YOU IT’S THE TRAILER UNLOAD.”
Gretchen McCarthy, Target Corp.
shipping capacity, companies that had operated in a high funding environment had difficulty staying afloat as freight rates continued their decline and revenue (and income) hits permeated throughout the industry.
Perhaps the biggest example of this rebound is DAT Freight & Analytics’ acquisition of the Convoy digital freight matching platform in July. DAT acquired the company from Flexport, which had acquired the firm’s freight tech out of insolvency in late 2023.
While Flexport paid a reported $16 million in the initial deal, the digital freight forwarder flipped the trucking marketplace over to DAT for roughly $250 million, according to Axios.
Throughout the industry, mergers and acquisitions (M&As) saw an uptick to kick off 2025, signaling that companies are more willing to place bets on smaller firms. In the first four months of the year, logistics technology M&As increased 14.8 percent compared to the year prior, jumping from 27 to 31, according to Capstone Partners.
Capstone attributes the deals to easing market conditions in late 2024 “that encouraged strategic buyers to resume inorganic growth initiatives after a year of prioritizing internal cost control efforts.”
Notably, the Federal Reserve cut interest rates three times from September to December, thus encouraging more businesses to ramp up their investments.
Companies like Convoy, supply chain visibility platform E2open, returns solutions provider Inmar Supply Chain Solutions and freight pricing intelligence platform Greenscreens are among the firms that have gotten acquired in 2025.
“Promising upstarts pursuing seed or A rounds have been successful, but players who raised capital in 2020-2021 have difficulty raising follow up rounds,” said Gordon Mackay managing director at Capstone Partners. This dynamic is playing into the increase in M&A activity for otherwise cash strapped businesses.”
While Mackay warned that the increase in overall investments is not broad based, funding throughout the logistics tech sector has been stronger in 2025.
Walmart and Target lean on agentic AI and cargotracking tech to speed deliveries, while freight tech startups rebound with fresh funding and more acquisitions.
by Glenn Taylor
Through April 29, Capstone said capital invested in freight tech companies increased 84.4 percent to $4.5 billion, up from $2.5 billion at the same time the year prior. Total funding throughout 2024 amounted to $16.8 billion.
Omnichannel fulfillment provider Stord had one of the biggest influxes of money this year, with $200 million invested after closing a Series E round, taking its valuation to $1.5 billion.
Cargo theft prevention and supply chain risk management firm Overhaul reeled in $105 million in Series C funding, while share truckload software provider Flock Freight brought in $60 million of its own in Series E funding. E-commerce sales, planning and returns solutions provider Swap Commerce generated $40 million, while agentic AIpowered supply chain planning tool Lyric brought in $43 million.
Hardware and software continue to provide efficiencies in the warehouse.
by Meghan Hall
technology —both hardware and software—is an impossible piece of warehouse management to ignore. Organizations’ interest in implementing emerging technologies continues to rise, and as the systems are refined, their impact on the warehouse continues to improve.
Artificial intelligence, machine learning, robotics, automation and other legacy technology continue to work in tandem to create connected warehouses with greater efficiency, speed and inventory tracking.
Here’s a look into four technologies that are shaping the future of warehousing:
AUTONOMOUS MOBILE ROBOTS
Autonomous mobile robots (AMRs) have started to influence the way that automated machinery interacts with humans in the warehouse. Previously, many robots that aided humans in warehouse and supply chain functions were stationary—often robotic arms or other single-movement form factors. Now, AMRs, powered in part by AI systems offering up directions and learnings, have started to penetrate the market.
Unlike stationary robots, AMRs are designed to travel around the warehouse, factory, dock or facility that they support. While most form factors today operate with wheels, other form factors, like Apptronik’s bipedal humanoid robots, deployed in some GXO facilities, or Boston Dynamics’ Spot, famously shaped like a dog, use legs to move around. Humanoids have garnered a great deal of hype, but are not widely deployed as of yet.
The idea is that AMRs are intelligent enough to handle simple tasks on their own; some of those tasks mirror what a human can easily do, while others are meant to add new capabilities to inventory management, warehouse floor management and other critical functions.
Today, common tasks for AMRs include palletization, unloading trucks, scanning inventory with embedded RFID and moving items around a warehouse.
A variety of large companies, including Amazon, have indicated they’re interested in using bipedal humanoids for several logisticsrelated use cases. Amazon Robotics, Boston Dynamics and Agility Robotics are among the early adopters of a new robotic “brain” developer kit from Nvidia that allows AI systems to run simultaneously in a warehouse
robot. Nvidia expects that the kit, called Jetson AGX Thor, will supercharge the development of humanoid robots, which experts said has lagged in comparison to other form factors because of the complexity associated with building and operating them.
Data from Grand View Research showed that, in 2024, North America was the largest market for AMRs, but the total global market stood around $4.07 billion. The firm expects to see the market soar to $9.56 billion, more than double 2024’s size, by 2030, with a 15.1 percent compound annual growth rate (CAGR).
DIGITAL TWINS AND ROBOT OPTIMIZATION
As warehouses become more and more automated, technology providers work to leverage digital twin models that can provide leaders a clear picture of what’s going on with warehouse systems at any given time.
A digital twin is effectively a synthetic, virtual version of a real-life warehouse or facility, and typically includes all major automated systems and machinery in its view.
Having a holistic picture of the warehouse’s operations can help leaders make labor adjustments, leverage the right automation systems in tandem and handle inventory effectively. Recommendations are typically made through machine learning and AI algorithms tuned to seek out efficiencies.
While digital twins are typically thought of as a way to oversee a facility’s progress and issues in real time, technology that leverages digital twins to train robots and other automation tools has started to rise in prominence.
Early this year, Nvidia announced its Mega blueprint, an addition to its Omniverse platform, which allows developers to put together digital versions of real-world scenes to simulate robotics capabilities. Mega allows developers to test out course availability— otherwise thought of as the path non-stationary robots take to complete their tasks—and can include human workers in the digital landscape, ensuring that, particularly in the case of humanoid robots that work side by side with warehouse employees, the synergy between humans and technology works without snafus. This type of simulation and training, paired with the use of synthetic data and scenarios, can help robots learn about the environment they’re slated to be in, long before they ever hit the warehouse. That’s particularly important when considering employee safety outcomes as AMRs start to have an increased presence. While still important to consider safety with stationary robots, they are less likely to accidentally come into contact with human workers.
Beyond safety, Mega can help leaders understand data about task completion time, warehouse throughput, robot fleet efficiency and more. Notably, the technology also flags when something could go wrong in the physical setting. Mega can run multiple scenarios simultaneously.
Azita Martin, vice president and general manager, retail & CPG at Nvidia, said earlier this year that supply chain players have a great
deal of benefit headed their way from digital twins and AI simulations.
“We absolutely believe that training robots has to be done in a simulation environment, because there are hundreds of thousands of scenarios that we wouldn’t even think about in the real world that you can actually use in the simulation environment to train those robots,” she said.
Digital re-creations are enabling faster training and problem solving.
3
INVENTORY-TRACKING DRONES
When consumers think of drones, they often call to mind delivery drones, like those employed by retail giants Amazon and Walmart, or those that photograph landscapes from above. But drones also have strong applications indoors—particularly in warehouses and fulfillment centers.
Because the hardware is small and nimble, drones can soar above pallets, shelves and more to collect information on inventory and warehouse operations. But in order for drones to provide real-time updates and offer recommendations on how to alter a workflow, they need intelligence underneath.
Drones themselves are simply hardware; without underlying AI, ML and software systems, they cannot provide the core benefits associated with their in-warehouse deployments. Companies like Gather AI are working with warehouse and logistics players to add vision systems, machine learning models and agentic AI into the workflow.
Sankalp Arora, Gather AI’s CEO and cofounder, said that those systems enable the most useful functions drones have to offer.
“Instead of raw images, managers get clear, actionable guidance such as where to slot items, how to plan labor, how to route work and how to lay out inventory for maximum efficiency,” Arora noted.
Arora said drones in the warehouse have the propensity to improve companies’ worker safety outcomes, revenue and sustainability outcomes. That’s because drones can easily maneuver spaces that are hard for humans to reach, and can identify lost inventory or ensure that seasonal inventory is prioritized. The technology is becoming increasingly popular in the warehouse—and with good reason, Arora said.
“Today, drones are becoming the warehouse’s eyes and ears—scanning racks, reading labels and barcodes, spotting overages or damages and delivering real-time inventory accuracy of 99.9 percent. Integrated with systems like Gather AI, they transform unstructured, live operational data into actionable insights. This shifts operations from reactive to proactive: not only tracking what’s on hand, but validating what is actually happening on the floor,” Arora said.
One of the most interesting promises of AI is that it can provide new use cases for longstanding technology, like radiofrequency identification (RFID). While RFID has long been a tool retailers and brands have tried to leverage, both in their stores and in their warehouses, the advanced development of AI is giving the miniscule chips and tags another wave of hype. In the warehouse, pallets and products that contain RFID chips or tags can be rapidly tracked and scanned, whether by a human or by an automated system, to help keep a precise count on inventory and understand the location of goods. Unlike its older predecessor, barcodes, RFID can be scanned and processed rapidly, said Jon Gregory, director of global standards at GS1 US, said RFID is a better alternative.
TODAY, DRONES ARE BECOMING THE WAREHOUSE’S EYES AND EARS.”
“Unlike traditional barcodes, RFID does not require line-of-sight scanning, so thousands of items can be read immediately instead of one at a time,” Gregory said. “That means what used to take a team of workers days—like a full inventory count—can now be completed in hours and confirmed in near real-time. For busy distribution centers, that translates directly into saved labor, reduced errors and more reliable fulfillment.”
And while keeping human workers in the loop remains a priority for many organizations, some supply chain organizations face labor shortages that they’re looking to plug with robots and other technology solutions. In combining RFID with other evolving technologies, organizations can work to solve problems and streamline workflows, Gregory noted.
“The real opportunity lies in how RFID integrates with emerging technologies. We’re seeing pilots where drones equipped with RFID readers and computer vision fly through warehouses and automatically validate inventory accuracy, down to the serialized item level,” he said. “Paired with AI, RFID data can use predictive analytics to flag anomalies such as missing or misplaced items, unexpected theft or shrinkage and even suggest optimal storage layouts. Robotics and automated guided vehicles are also tapping into RFID so they ‘know’ exactly what items they’re handling without human intervention.”
RFID
Sankalp Arora, Gather AI
Drones are small and nimble.
Mobile robots are currently the most efficient in the warehouse.
Manhattan Associates research shows the majority of transportation leaders believe agentic AI will act for them by 2030.
by Meghan Hall
six in 10 transportation leaders believe autonomous agentic AI will act on their behalf within the next five years, but just 37 percent of surveyed organizations have “deeply” integrated artificial intelligence and machine learning into their current transportation management systems (TMS). That’s according to data from supply chain technology company Manhattan Associates and research firm Vanson Bourne.
While transportation leaders seem to believe in the promise AI could bring to their organizations, they also acknowledge that there are adoption issues that could bar them from implementing agentic AI systems rapidly. Just under half of leaders surveyed said they’re highly prepared for AI agents to be in place by 2030, but about half of organizations expect to face skill shortages while integrating the technology. Forty-four percent of leaders said they would be likely to face integration holdups and an additional 44 percent cited questions of data quality and availability.
All of those issues are common as organizations work toward a more technology-focused future; some have already adopted simpler AI systems to help their work along, but many still lack maturity compared to those in their market. Six in 10 organizations use AI-integrated sales and operations planning systems, and more than half use predictive analytics. But markedly fewer organizations cited using quickturnaround AI tools, like historical trend analysis (38 percent), automated booking (36 percent) and real-time demand sensing (35 percent) technology for those tasks.
But as organizations across industries continue to invest in, and rely on, transportation management—particularly against the backdrop of a consumer demanding speed and supply chain costs
fluctuating because of political changes— business’ interest in transportation has started to see an uptick. While 78 percent of leaders said their organization sees transportation management as a necessity for success today, 86 percent said they know it will be a strong priority by 2030.
But transportation transformation still has competing priorities; for instance, nearly seven in 10 leaders said sustainability remains a top priority for their organization. Simultaneously, organizations continue to struggle with insight into their transportation strategies; half of respondents said they have trouble preemptively rerouting shipments as needed, and about half of respondents are actively grappling with the best way to schedule dock and warehouse workers.
While agentic AI may be positioned to help companies handle multiple priorities simultaneously, Bryan Smith, director, transportation management systems at Manhattan Associates, said the best way forward is to begin adopting helpful technology now.
“Eighty-seven percent of respondents anticipate that challenges in areas such
FAILURE TO ACT NOW WILL EXPOSE ORGANIZATIONS TO RISING COSTS... AND THE RISK OF FALLING SHORT OF CUSTOMER PROMISES.”
as operational visibility, AI adoption and sustainability compliance will intensify, leaving their current transportation management systems struggling to keep pace. Failure to act now will expose organizations to rising costs, questions over long-term efficacy, and the risk of falling short of customer promises,” Smith said in a statement.
The benefits of beginning early could incentivize companies to work toward at-scale adoption; more than 80 percent of leaders said they believe that technology advances could decrease the cost of freight by at least 5 percent by 2030. What’s more, six in 10 companies indicated that stronger visibility and insight into transportation systems fosters stronger satisfaction among customers.
Smith said whether or not companies choose to change alongside it, the market will continue to shift. Manhattan recognizes that many organizations have a ways to go on implementation, but that, in order to stay relevant with customers, companies need to consider prioritizing technology before they fall behind competitors.
“Modern transportation management demands organizations balance a range of competing priorities, and the research clearly illustrates many organizations are still unprepared to meet the challenges of evolving sustainability mandates, expectations around AI and the need for more visible, actionable data insights. Looking ahead to 2030, these demands will intensify, increasing the pressure on organizations to operate transportation operations in smarter more intuitive ways,” Smith said.
Bryan Smith, director, transportation mgmt. systems at Manhattan Associates
According to the U.S. Bureau of Transportation Statistics, seasonally adjusted rail freight carloads have dropped off substantially since 2008. by Glenn
Taylor
union pacific’s pending $85 billion acquisition of Norfolk Southern is set to shake up the rail industry as the U.S. anticipates the first modern transcontinental railroad. When announcing the transaction, Union Pacific CEO Jim Vena said the new network connects more than 50,000 miles of tracks across 43 states and has access to more than 100 U.S. ports. The combined company would create single-line services aimed at reducing interchange points and increasing fluidity and optionality for railroad cars. Vena said the 1 million carloads that stop at these interchange points before being moved from one railroad to the other will see transit times cut down by one-to-two days—in what would be the biggest benefit for UP-NSC customers and end consumers alike. “That’s [Vena’s] main case for making this merger,” said Allan Rutter, senior research scientist and freight analysis program manager in the freight and trade division at the Texas A&M Transportation Institute. “The story he likes to tell is, if you fly from Denver to Columbus, Ohio, you don’t have to get off a plane in Memphis, Tennessee and wait for a day or two.” Rutter, who served as the Federal Railroad Administrator under President George W. Bush from 2001 to 2004, said the real test for Union Pacific and Norfolk Southern will be making smoother connections at interchange points in Chicago, since those networks weren’t designed with a direct handoff. Most of the cargo is carried between those terminals via truck, he noted.
Bringing back rail carload volumes has been another central point of the acquisition, especially in an industry that has struggled to hold onto them.
According to the U.S. Bureau of Transportation Statistics, seasonally adjusted rail freight carloads have dropped off substantially since 2008. While monthly carloads totaled 1.38 million in May that year, they have since dropped off to 982,000 as of May 2023.
Competition outside of rail has pushed the industry further in this direction, with trucking volumes outperforming railroad volumes growth since 2018, observed Russell-Kroese Partners managing partner Rob Russell.
Russell-Kroese Partners, an executive-level consultancy across rail, logistics and real estate development, is currently advising customers of Union Pacific and Norfolk Southern on the risks, challenges and opportunities they may experience throughout the transition. According to Russell, both railroads are currently crowdsourcing concerns from shippers about the acquisition.
“If you’re in an environment where your volumes are not growing—and you’re probably reaching the point on how much price you can take in the market, and precision scheduled railroading has been fully implemented, which takes a lot of the costs out—the only thing left to do to show earnings results to Wall Street is to basically do an acquisition,” Russell said.
An acquisition may have also felt like a defensive move out of necessity due to the rise in intermodal traffic, in which containers or trailers are loaded from a truck to a railroad (or vice versa).
“A transcontinental railroad really didn’t make a whole lot of sense up until the advent of intermodal traffic, because there really wasn’t this just-in-time attitude about moving freight from one coast to the other” said Louis Muldrow, a senior consultant at railroad and industrial consultancy PLG Consulting. “As intermodal has come to be a much more important driver, growth-wise and revenuewise for railroads, it’s almost a necessary thing to happen to eliminate all those pinch points in the middle and drive out time and cost.”
According to Muldrow, the desired outcome
to cut these costs could also have downward pressure on freight rates, even though railroads have not always been amenable to reducing rates.
“It’s not really in their DNA, but once again, this is a drive to get business on, back onto the railroad from trucks and intermodal,” said Muldrow. “So, there’s got to be some recognition that if we can drive costs and we need to make this more competitive, that they would have to have some desire, some outcome of a better economic proposition for customer.”
But like the service levels, expectations for where rates go are going to vary depending on the success of the integration and the ability to cut costs throughout the operation. Jason Miller, interim chairperson, department of supply chain management at Michigan State University’s Eli Broad College of Business, said he doesn’t foresee the wider acquisition having much of an impact on rates.
“The PPI for carload movements tends to increase steadily over time because railroads have strong bargaining positions with many shippers (e.g., someone moving crushed stone
is likely to use the railroad closest to their facility, or a coal mine may only be served by one railroad),” Miller told Sourcing Journal. “Intermodal rates that railroads receive fluctuate more based on pricing conditions in the dry van truckload sector.”
As more potential changes are on the horizon at Union Pacific, the transaction naturally caused some speculation that the other major Class I railroads, BNSF Railway and CSX, could see some merger action of their own.
If combined, those railroads would carry 44 percent of total carloads in the U.S. and 47 percent of carloads hosting intermodal containers, according to STB Rail Service Metrics data. This would surpass the UPNSC’s respective market share of 43 percent and 46 percent.
While CSX has gone on record as saying it would not rule out any options to maximize shareholder value as a public company, BNSF has publicly come out against an acquisition.
Warren Buffett, billionaire investor and chairman of BNSF parent Berkshire Hathway, said he was not considering the purchase of another railroad. Instead, he said he spoke with CSX CEO Joe Hinrichs about potential ways the railroads can cooperate with each other.
Just days before Buffett’s commentary in late August, BNSF and CSX partnered up to offer multiple coast-to-coast intermodal services, as well as another Phoenix-to-Atlanta service aiming to convert over-the-road freight to rail.
Despite Buffett’s insistence of no acquisition for now, not everyone is convinced a deal is off the table in the long run. Russell indicated that neither railroad would be able to compete effectively without joining forces.
“It won’t ultimately offset the advantage that UP would have at the end of the day,” Russell said.
The pending deal is still subject to review and approval by the U.S. railroad regulatory body, the Surface Transportation Board (STB).
With Union Pacific and Norfolk Southern targeting an early 2027 date for official closing, the companies will have to convince the STB that the merger is both in the best interests of the public and will enhance competition on the Class I railroads.
Union Pacific’s execs argue that creating a coast-to-coast railroad covers both those standards, noting that such a railroad will compete more effectively with Canadian railroads to win back U.S. freight volume and American jobs.
IF YOU’RE IN AN ENVIRONMENT WHERE YOUR VOLUMES ARE NOT GROWING… THE ONLY THING LEFT TO DO TO SHOW EARNINGS RESULTS TO WALL STREET IS TO BASICALLY DO AN ACQUISITION.”
In the wake of the 2022 railroad labor dispute, when President Joe Biden had to intervene and block unions from calling a nationwide strike, Rutter pointed out that a lot of carriers have since gone out of their way to find new ways to work together with unions to smooth over concerns. However, he noted that some carriers have been more assertive than others.
“If the unions had a favorite of the Class Ones out there, I don’t think Union Pacific would be their favorite,” Rutter said. “How they feel about promises made, will be more about the proof and what kinds of commitments can be made on the part of the combined railroad.”
Rob Russell, Russell-Kroese Partners
Union Pacific’s pending $85 billion acquisition of Norfolk Southern is set to shake up the rail industry.
Join us at the annual Super Bowl of Sourcing on September 25 in New York as we drill down into the issues facing our industry and discuss strategies and solutions to maintain your edge.
Inspectorio’s research shows the supply chain industry is behind the curve when it comes to technology adoption. by
Meghan Hall
supply chain executives haven’t connected the dots between artificial intelligence and key goals for the future, like sustainability.
According to Inspectorio’s new State of Supply Chain report, shared exclusively with Sourcing Journal, one-quarter of all respondents said they expect sustainability to be a “pivotal area for future innovation.”
David Klein, president and co-founder of Inspectorio, said that figure surprised him. “Sustainability [and] traceability in particular…has been at the top of the agenda for many companies, particularly the ones that [have] a strong presence in Europe. And the more I speak with industry leaders, the more the topic of traceability and sustainability gets pumped up at the top of the agenda for those conversations. So seeing that only 25 percent see sustainability as a critical area for future innovation was definitely lower than I was expecting,” he explained.
Klein said that lack of faith in the way forward for sustainability could be due to a variety of factors, but he thinks one of the main reasons could be prioritization.
“The importance that is granted to sustainability initiatives is a lot more dynamic and sensitive to changes over time. That is, it moves from high on the priority list to low on the priority list very quickly,” he said.
Even though supply chain leaders seem to have questions over whether sustainability innovation will overtake other initiatives, they still rate sustainability as the trend most significantly impacting the supply industry.
And to keep up with some of the ESG regulations in place in key markets, like the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) or the U.S.’s Uyghur Forced Labor Prevention Act (UFLPA), organizations continue to up their compliance budgets.
Inspectorio’s data shows that 60 percent of organizations have reported an increase in compliance budgets over the last two years, and an additional 33 percent have reported that their compliance budget has remained stagnant.
About 44 percent of respondents indicated that sustainability is the number one factor altering today’s supply chain industry, with technology advancements not far behind at 32 percent of respondents.
That data aligns with recent Blue Yonder data that showed supply chain executives’ primary investment interests are sustainability and artificial intelligence.
Companies may have a unique opportunity to pair sustainability goals with AI technology, particularly if they haven’t already begun implementing the systems into the supply chain.
Inspectorio’s data shows most organizations haven’t made it to that point yet, though. Less than 5 percent of respondents using AI in their organizations said sustainability was a primary use case.
Klein said there are a slew of clear-cut use cases for AI where ESG ramifications are concerned. For instance, he said, AI can ingest data about a supplier’s operations and compare it to industry standards and regulatory requirements.
“When you’re having to abide [by] a lot of these international standards, you’re subjecting a lot of these factories to have to do so many audits. Audit fatigue is a real problem,” he said. “That’s a very simple, clear use case where AI can help immensely.”
He also said it can help with risk management, which 40 percent of respondents ranked as their top challenge today.
“Today, you’re having a human have to read through all [different documents] to try and make sense of them and say, is this a high-risk facility [or] is it a low-risk facility—is it acceptable or not for production? AI can do that analysis for you so easily,” he said. “The two biggest categories of impact of AI in the sustainability space is on the efficiency and productivity of how programs are being run, and on the thoroughness and quality of risk assessment.”
Even with all the hype around AI, the technology has only begun penetrating the supply chain ecosystem. Inspectorio’s data shows that 23 percent of surveyed organizations have already integrated AI into their supply chain operations, while 77 percent still have yet to implement the systems.
Klein said supply chain seems to be lagging in comparison to other functions and industries.
“It’s almost like, in our industry, we’re late to the game, but we’re moving in the right direction,” Klein told Sourcing Journal.
Among the companies that have implemented AI into their supply chains, one in five said the key objective is data analysis and decision making. An additional 20 percent said the focus is on automation and efficiency. Other, less popular use cases include customer-focused technology, quality and control and traceability.
IT’S ALMOST LIKE, IN OUR INDUSTRY, WE’RE LATE TO THE GAME, BUT WE’RE MOVING IN THE RIGHT DIRECTION.”
David Klein, Inspectorio
Six in 10 respondents inside companies that have not implemented AI into their supply chains said the primary reason for the lag is that they lack AI-powered tools. Nearly 30 percent of leaders said they have yet to find compelling AI tools in the market. That could soon change, as companies continue to build new applications on top of foundational generative AI models and capabilities become increasingly specific.
Despite the low adoption rate for AI across the supply chain industry today, respondents showed enthusiasm for the future. Eight in 10 supply chain leaders said technological advancements—primarily AI and ML—will have a significant impact on the supply chain within the next five years.
Klein said he believes a great deal of potential in combining AI with other emerging solutions—particularly IoT technology—as companies’ digital transformation strategies further mature.
“When you have the right IoT technologies paired with the incredible advancements of AI in all of its shapes and forms, be [it] generative AI, be [it] computer vision and others, that’s where you start to unleash a very strong technological advancement in our space,” he said.
