The future of AI in logistics and last-mile delivery in Australia

AI has made waves in the entire logistics chain, optimising operations, enhancing customer experiences, and improving delivery efficiency. So, how can your business leverage these advancements for sustained e-commerce growth?

According to Australia Post, Australians spent more than AU$69 billion online in 2024, breaking e-commerce records1. One key factor that drove this surge was the rising cost of living, with 93% of Australians going online searching for value¹.

In light of this trend, it’s become even more crucial to ensure efficient logistics across your entire operations, from warehouse management to last-mile deliveries.

As businesses strive to meet this demand, artificial intelligence (AI) in logistics becomes an even more necessary tool. From warehouse automation to AI-powered route optimisation, the technology is here to stay. But how can you get into the new global logistics game?

The role of artificial intelligence in modern logistics

AI in logistics touches everything from dynamic inventory management to optimising the speed of last-mile deliveries. 

Unsurprisingly, Australian businesses have begun to adopt the technology. According to the Australian Department of Industry, Science and Resources, 35% of businesses in the Distribution industry and 45% in the Retail Trade industry were adopting AI in Q4 of 2024². 

With this accelerating adoption, you’ll have to seek advanced logistics services to maintain competitiveness in your fulfilment  capabilities. Here are ways in which you can do so:

Warehouse automation solutions for inventory efficiency 

AI plays a transformative role in warehouse management, shifting operations from manual processes to intelligent, streamlined systems. By leveraging machine learning, AI ensures maximum efficiency in stock handling and movement:

• AI-powered warehouse automation: Algorithms help manage storage space, reducing retrieval times and overall costs of logistics.
• Robotics: Automated guided vehicles (AGVs) and sorting robots, managed by AI, increase the speed of fulfilment and minimise human error during picking.
• Predictive stock systems: Historical data is used to forecast demand fluctuations accurately, optimising inventory management and preventing costly overstocking or stockouts.

Predictive analytics to reduce logistics costs 

AI in logistics also reduces operational expenditure by eliminating inefficiencies, predicting failures, and optimising resource allocation. Here are some common strategies used:

• Demand forecasting: Vast datasets can be used to predict future inventory needs, mitigating overstocking and costly urgent shipments. For example, tools like DHL Express’s My Global Trade Services (MyGTS) platform leverage these functions for cost and customs forecasting.
• Route optimisation: Machine learning helps in analysing real-time traffic and delivery patterns to reduce fuel consumption and driver hours.

Revolutionising the last mile

While AI in logistics drives efficiency in warehousing and overall cost reduction, its impact is also felt in last-mile delivery. By making shipping more efficient and cost-effective for businesses of all sizes, it significantly shapes customer experiences.

Some of the ways that this is made possible include:

Last mile delivery route optimisation

AI-driven route optimisation remains key to efficient last-mile deliveries. Algorithms revolutionise route planning by analysing real-time data on traffic, weather, urban density, and delivery priorities.

In turn, by identifying the most efficient delivery routes, you can significantly reduce delivery times, lower fuel consumption, and manage battery consumption and charging station locations for electric vehicles (EVs).

Personalised customer delivery experience

AI is essential for delivering the highly personalised experiences customers now expect. For example, 82% of shoppers say accurate delivery tracking and updates will be important to them in the next 5 years, demonstrating how customers expect visibility throughout the delivery process1.

Furthermore, the demand for flexibility is growing, with 56% of Gen Zs and 45% of Millennials expressing that they would switch retailers to access out-of-home collection points1. 

Therefore, last-mile routing software and delivery analytics are vital to enhance the delivery experience through accurate order tracking and flexible delivery options. In turn, you’ll also be better positioned to improve customer loyalty.

Sustainability and carbon reduction

Sustainability is a growing priority, and AI can significantly improve environmental performance across the last mile. By providing granular data and predictive insights, AI turns ambitious climate goals into actionable steps:

• Measuring emissions: AI systems automate the collection and analysis of shipment data, providing precise carbon footprint reports. This accuracy helps businesses identify emissions hotspots and comply with complex reporting frameworks.
• Optimising EV routes: AI route planning algorithms ensure EV fleets operate efficiently by considering battery range and charging infrastructure. This maximises the fleet's usable range and drastically reduces fuel consumption.

How to implement AI in your logistics strategy

Embracing the future of AI in your logistics chain can revolutionise your delivery processes, but the key to success lies in strategic implementation tailored to your specific needs.

1. Assess your needs

Start by pinpointing the precise challenges and objectives within your delivery operations. This will guide you in choosing AI solutions that specifically address your operational bottlenecks and enhance efficiency where it's most needed.

2. Choose the right AI tools

Explore the range of AI tools and platforms designed for logistics and shipping. Each tool offers unique features, from route optimisation to predictive analytics, so select those that align with the specific demands and scale of your business operations.

3. Integrate AI with existing systems

For effective implementation, ensure the AI tools you select can seamlessly integrate with your existing logistics systems. This integration should enhance your operations without disrupting established processes, thereby facilitating a smoother transition and quicker adoption.

4. Monitor and optimise

Implementing AI is not a set-and-forget solution. Instead, continuous monitoring and optimisation are crucial. Regularly assess the performance of AI tools to ensure they are meeting expected outcomes and make adjustments as needed to maximise their impact on your delivery operations.

AI in action at DHL Express

DHL Express spearheads the integration of AI in logistics, streamlining e-commerce shipping and last-mile delivery services globally. Here's how:

AI-powered software to optimise routes

Through AI-powered logistics software, DHL Express accurately forecasts shipping volumes, achieving precision in courier route planning. This meticulous organisation allows for the prioritisation of urgent or time-sensitive deliveries. 

Moreover, AI-driven strategies enhance fuel efficiency by optimising routes and identifying operational inefficiencies such as excessive idling or poor vehicle loading practices. These advancements collectively reduce transit times and the environmental impact of shipments in and out of Australia.

Innovative AI features in the MyGTS platform

The new trade lane comparison feature integrated into the MyGTS platform leverages AI to analyse trade regulations and calculate the total landed costs, including duties and taxes, across various international shipping routes. 

By providing detailed insights into trade agreements and customs obligations, MyGTS supports companies in leveraging AI for shipping decisions, optimising market expansion, and enabling effective cost management. 

Deliver efficiency and innovation with DHL Express

The benefits of AI in logistics are undeniable. From predictive analytics to route optimisation, it’s indispensable to helping businesses remain competitive in a rapidly evolving logistics industry. 

Ready to streamline your logistics capabilities and enhance your customer experience? Open a DHL Express business account and harness our AI-powered solutions today.