News / AI – the next, and necessary, stage in the SaaS/cloud-computing revolution

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In the first of our weekly series on AI in logistics, we talk to Raft about whether AI is just over-hyped technology – or whether it marks a revolutionary change

Artificial intelligence (AI) has dominated headlines for several years, and in logistics it has snatched the airspace previously monopolised by, dare I say it, “blockchain”.

Like that mythical flop, AI has been presented as something that will revolutionise global supply chains – and to be clear, this upending of industry is not limited to supply chains, rather it is seen as the next stage of 260 or so years of industry revolutions.

But, and this should not come as a surprise, Greg Kefe, chief marketing officer at Raft, an AI start-up specialising in logistics, says there’s something to AI in a way there was not for blockchain.

He told The Loadstar: “I had a number of friends in California’s bay area that joined blockchain start-ups, well-funded companies that had backing, but it was all based on a hype that, despite strong efforts, could not translate into commercially viable products.

“Ultimately, that is what you need – something you can go out and sell – and so, within three years, blockchain in logistics was done, it was a bubble.”

Like toward blockchain, there are a number of sceptics as to AI’s benefits for global supply chains, but for those arguing “if it seems too good…”, Mr Kefer believes there are key differentials to blockchain.

With that in mind, he turns to a different historical comparison, “cloud computing”, and more specifically “software-as-a-service” (SaaS), to show that for every miss there is a hit.

“Cloud computing served as an inflection point for the way businesses not only operated, but for how they progressed, flipping the notion of software ‘ownership’ on its head and putting the onus back on software developers and suppliers to get it right,” Mr Kefer explained.

“Before they got their million-dollar paycheque upfront, SaaS meant them realising revenues monthly and forcing them to ensure the product functioned for their users, or they would leave.”

“It was a great moment, because suddenly you were not stuck with 15-year-old technology. It was pretty profound, suddenly not needing your own servers; I would go so far as to say that it was a quantum shift, but one that seems to have gone unrealised by the bulk of people.”

What though, did this mean in practical terms for supply chains? As far as Mr Kefer sees it, SaaS represented the opening of “a data exchange in the middle of everyone’s supply chains”.

It was a data exchange not only offering ease of access, but one producing increasingly reliable information, which has seen its quality of data provided across these linked by SaaS and cloud networks, which in the case of ocean freight status events, helped drive data accuracy from 60% to 99%.

“Accuracy of 99% would not be possible if everyone was pecking at the data by themselves on siloed systems,” he added. “The only reason it worked was because everybody shared a single instance of the software. So, there is one manifestation of cloud computing and the really profound impact that it has on logistics.”

But while cloud-computing offered this profound shift in what was possible, it also brought a new problem.

“Yes, cloud-based technology unlocked faster ways of sharing data, but in international trade a logistics operator has thousands of customers, and they have different ways of expressing that data,” explained Mr Kefer.

“All this difference created problems in the systems, taking longer to unpack the data than it took to move the physical freight, creating blockages along the way.”

Mr Kefer essentially considers AI the next, and necessary, stage in the SaaS/cloud-computing revolution, with the technology acting as the interpreter to unpack myriad ways data may be filed.

Asked if it would not be simpler for companies to just ask customers to file data in a uniform manner, he stressed that “this just isn’t going to happen”.

He said: “This leaves you with the option of having the emails, or however the information is shared, manually interpreted by staff, which is slow, costly and can lead to things being missed, or as I see it, you can turn to AI.

“At Raft, we believe AI can serve as the consumption and translation machine, interpreting the data, no matter how it is sent, and configuring it in the way the user wants.”

Listen to the sponsored podcast on how AI will change logistics here.