The freight sector has always had to adapt quickly in order to navigate challenges and uncertainties, from economic pressures and geopolitical volatility to climate change and sustainability targets—which is why the emerging potential for harnessing the power of AI for logistics needs to be thoroughly explored.
Chris Roe, Managing Director of Amazon Freight, sat down for a conversation with economist and international trade expert, Dr Rebecca Harding, to discuss the current and future state of freight—in particular, the ways we can harness and utilise AI in logistics to streamline outdated processes, increase overall efficiency, and democratise the market to make room for smaller businesses.
Freight and Logistics Trends
Throughout 2024, we saw that small businesses face immense cost pressures. This—along with carbon adjustment regulations coming through—are adding to a climate of uncertainty. It’s also become clear that the industry is lacking in regulations in certain areas, particularly the use of emerging technologies. Larger organisations and governments should be setting parameters for how this technology should be applied.
“Have a heart for the small company” says Dr Harding, who encourages everyone to consider the pressure smaller businesses are under and the very real possibility that they may be squeezed out by regulations, finances, geopolitical uncertainty, and technology. Harding goes on to explain that many organisations are unsure how to use new and emerging technology, which is creating challenges for the speed at which we can streamline freight operations and reduce costs. We need to learn to harness the power of technology, including AI logistics.
Dr Harding also highlighted that in a recent survey, companies expressed genuine interest in contributing to sustainability and wanting to make a real difference. Sustainability affects all of us and is going to continue to be a trend but the question is: how can everyone, including small businesses, contribute? Dr Harding insists that this is another area that requires more guidelines and structure.
Ultimately these current trends will play into the future of freight, and the future of freight itself lies at the intersection of those three fundamental points: cost, technological advances, and sustainability.
Navigating Market Volatility
There is no doubt that the last few years have been a rollercoaster for the freight industry, which hasn’t seen a new normal since Covid. Market volatility has led to persistently fluctuating costs, supply isn’t equalling demand around the world, shipping is being diverted, and trade has shifted.
“What’s begun to happen is you can no longer be absolutely certain that you’re going to be able to get something from A to B, so everyone works on a just-in-case basis. This tends to lead people into building up stock, which is expensive and ultimately raises shipping prices by something like 250-450%. This is not something that small businesses can calculate for at the moment,” explains Dr Harding.
Roe adds that this approach will often lead to a ‘P50 forecast situation’, which on an individual basis means that—in practical terms—businesses would be disappointing their customers 50% of the time. This is what makes collaboration between businesses in the sector so important.
“The reason Amazon Freight exists is to share capacity with its customers, so that just-in-case per business is reduced and the overall slack is lower across the network. Which is good for everyone,” says Roe.
Technology could also have a huge role to play in navigating market volatility, with Dr Harding highlighting that using AI for logistics could come in many forms, including following and predicting market trends.
Integrating Intermodality
Both Roe and Harding agree that intermodality is a fantastic method for reducing carbon emissions and cost overheads.
“We’ve got battery electric trucks but right now there isn’t sufficient range for a battery truck to compete with a diesel truck. By using these for shorter journeys until the technology can increase, we can look at using sea and rail for those longer stretches.”
Roe goes on to explain that Amazon Freight has been conducting trials of intermodality methods since 2023, utilising both road and rail sections of journeys to reduce costs and save carbon. Electric vehicles can even be used for transportation up to rail stations and ports as well as on the other side to pick up and take goods to the end destination.
“In the trials, we saw a 20% cost saving using rail versus road and a 50% carbon saving for those journeys that have been replaced. What we need to do really, is create accessibility to those different ways of moving inventory for all businesses,” explains Roe.
In terms of harnessing AI for logistics, Harding highlights that technology has the potential in the near future to optimise operations and increase efficiency. For intermodality, we could see ways of coding end-to-end journeys and using the digital process to track data such as carbon emissions and the duration of journeys.
Democratising Data
Dr Harding’s advice to small businesses and shippers is to “invest in digital” and work on harnessing interoperability.
Many small businesses are being excluded from the future because of increasing costs and complexities around the industry. The key things we’ll all be navigating are: the speed of technological change, the introduction of AI, and the question of how we make AI a tool rather than something to fear.
Harding highlights the importance of retiring legacy systems and manual processes in favour of digitalisation while ensuring this knowledge and technology is available to all. Roe concurs that the democratisation of data is extremely important and that we all need to work together collaboratively and share data so that a partnership can happen between our systems.
Leveraging AI in Logistics
Harding is adamant that AI can be used constructively, potentially plugging the gaps we may not even know about. Roe agrees that artificial intelligence has huge potential, but also highlights that the human touch is still needed in some areas.
Roe goes on to explain that Amazon Freight has been working on utilising AI and machine learning to facilitate translation on their customer portal, so they can navigate an interface and retrieve the information they need in their own language.
“But human interaction is so important, which is why we have 24/7 support from real people,” he adds.
Roe further explains that AI for logistics can be implemented to reduce empty legs, which currently account for more than 15-30% of freight. AI can provide context on what causes empty legs as well as provide a solution to fix these issues.
Increasing Inbound Visibility
When asked for his advice on what companies should be doing, Roe feels strongly about increasing inbound visibility, such as providing customers with an insight into the freight journey and what happens between pickup and endpoint.
“For a recent customer, we connected our two systems via a third party to increase from 0% to 87% visibility on the full movement from A to B. This means that the customer can manage their supply chain better, manage within network transfers, match their operations at source to destination, and where they’re delivering to customers they then have a view of the route. So they know about any disruptions when they happen rather than getting to the B point and something hasn’t turned up,” observes Roe.
What becomes apparent is that there is plenty of scope to integrate AI for logistics throughout the operations process, including increasing inbound visibility and data tracking, ultimately enhancing the customer journey and end user satisfaction.
The Future of AI in Logistics
As Roe and Harding make clear, the freight sector is at a pivotal moment—where technology, AI, and collaboration can transform long-standing challenges into opportunities for growth, efficiency, and sustainability. The path forward requires not only embracing innovation, including emerging technology such as AI for logistics, but also ensuring it’s accessible to businesses of all sizes. Those who invest now in visibility, intermodality, and smart digital tools will be best positioned to navigate volatility and shape the future of freight. If you would like to learn more about how Amazon can help you move into the future of freight and AI logistics, either visit the Amazon Freight website or fill out this contact form.
