AI-driven route optimisation fuels substantial returns for ArcBest

AI-Driven Route Optimisation Fuels Substantial Returns for ArcBest

Fort Smith, AR – April 2024

In a period marked by increasing e-commerce activity and heightened complexities in last-mile logistics, ArcBest, a Fort Smith-based logistics and transportation company, has emerged as a leader in leveraging artificial intelligence (AI) to optimise delivery routes. Since its full implementation in 2023, ArcBest’s AI-driven route optimisation system has generated significant financial returns, saving the company over $13 million, according to Vice President of Data Engineering Erica Brigance.

The logistical challenges faced by companies like USPS, Amazon, and FedEx are well-known. These entail the so-called “vehicle routing problem,” an intricate issue of determining efficient routes connecting customers needing deliveries or pickups in a cost-minimising and customer-satisfying manner. MIT’s Matthias Winkenbach, a principal research scientist and director at the MIT Center for Transportation and Logistics, highlighted the potential of AI to revolutionize this sector by optimising traditionally complex delivery routes.

ArcBest has taken a pragmatic approach to integrating AI into its operations. Brigance noted that the system draws heavily on in-house data and analytics, highlighting that effective AI solutions are built on a foundation of quality data. This comprehensive data underpinning allows for the development of models that predict the most efficient routes while adapting to real-time changes, such as traffic conditions, weather variations, and customer preferences.

Brigance explained in a recent interview that ArcBest’s AI solutions also incorporate what she termed “cognitive engagement,” which employs advanced technologies like natural language processing and vision analytics. These tools enhance customer interactions and streamline document processing, transforming customer data into actionable insights. This refined approach contributes significantly to optimal logistical operations and improved customer service.

“Each service centre has unique requirements to make pickups and deliveries for our customers,” Brigance noted. “Those unique requirements can vary significantly — from residential to industrial areas, and from manufacturing to retail sectors. These distinctions influence how we schedule our routes.”

ArcBest’s success is further nuanced by its diverse operational landscape, with different strategies required for various locales. Brigance illustrated that delivering freight in a densely populated city like New York City diverges greatly from operations in a less urban setting like Fort Smith, Arkansas.

The benefits of ArcBest’s AI-driven route optimisation process extend beyond financial gains. Brigance emphasised improvements in sustainability and customer satisfaction, as the system enables the company to reduce the number of miles driven. This operational efficiency helps lessen the environmental impact while ensuring timely deliveries, thus better meeting customer demands.

“We’re running fewer miles, so there’s certainly a sustainability impact,” Brigance noted. “But it also means we’re able to meet our customer demands better because we have a better line of sight of where we need capacity to either pick up or deliver their freight.”

ArcBest underscores the importance of equipping its workforce with the necessary skills to effectively use AI tools. The company offers guidance on generative AI tools and is considering formal education plans to upskill employees as required. Brigance, however, stresses that AI should be applied judiciously, focusing on problem-specific solutions.

“I know AI gets a lot of hype, and I think it has its place, but for us, it’s really about understanding the problem and the challenge we’re attempting to solve,” she said. “AI can be the right solution for some challenges, but it’s not always the best answer. We talk about it as a pragmatic approach to innovation. We want to innovate where it makes sense and how it makes sense, not just to claim we’re doing it.”

As ArcBest continues to navigate the evolving logistics landscape, its strategic deployment of AI in route optimisation stands as a testament to how technology can reshape traditional industries, driving both economic and operational efficiencies.

Source: Noah Wire Services