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Jun 20, 2022
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Automating Logistics and Transportation Document Processing

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Chief AI for Everyone Officer

According to Statista, the global logistics market was worth an estimated $8.6 trillion in 2020. Logistics processes involve many documents, with ocean freight alone involving an exchange of more than 12 billion documents. Country-specific customs requirements add to the paperwork burden. Some shipments, such as hazardous material (HAZMAT) and pharmaceuticals, are subject to additional regulation and paperwork. Manually processing the ocean of data exchange involved is costly and time-consuming.  In this blog, we will review the types of documents and the process and benefits of automating logistics document processing.

Documents used in logistics and transportation

Logistics involves a plethora of documents. Below are a subset of common documents involved in transportation and logistics.

  • Commercial Invoice: A Commercial Invoice is the carrier's invoice to the shipper that spells out the transaction terms. It includes the complete details of the transaction, including the shipping terms.
  • Bill of Lading: A Bill of Lading is a legal document issued by a carrier to a shipper acknowledging the receipt of shipment. It includes details like the type, quantity, and destination of the goods and serves as a receipt of shipment.
  • Packing List: The Packing List provides details of items included in the shipment, such as weights, quantities, marks, and descriptions.
  • Certificate of Origin: A Certificate of Origin is used in international trade transactions. It attests that the listed products have met certain criteria for originating in a specific country.
  • Certificate of Free Sale: The Certificate of Free Sale, also referred to as Certificate for Export or “Certificate to Foreign Governments, provides evidence that the shipped products are approved by the regulatory authorities in the country of origin for sale in the open market, free of any restrictions.
  • Shipper's Letter of Instruction (SLI): The SLI clearly outlines the shipment terms, including responsibilities and liabilities assumed by each party handling goods.
  • Letter of Credit: A Letter of Credit is issued by a creditworthy bank guaranteeing payment on goods sold from a seller to a buyer. If the buyer cannot complete the payment, the bank pays the remaining amount to close the transaction.
  • Air Waybill (AWB): An AWB is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment for tracking. It serves as a receipt of goods by an airline (the carrier) and a shipment contract.
  • Sea Waybill (SWB): An SWB is a document or transport contract between the maritime company and the shipper. It is considered as proof of reception of goods and facilitates exchanges.
  • Dock/Warehouse Receipt: A Dock or Warehouse Receipt is a shipping document that proves a shipment of goods receipt by the international carrier and includes all the critical information about the shipment.
  • Insurance Certificate: An Insurance Certificate is a document issued by an insurance company spelling out the terms of damage coverage for the shipped goods.
  • Export License: An Export License is a legal and official document issued by the government. Exporters need a license to ship specific items in certain quantities. Some countries only need this document under particular conditions, while it can be a requirement for others.
  • Dangerous Good Declaration: A Dangerous Good Declaration is a document issued by the shipper providing critical information about hazardous materials included in the shipment.
  • Proof of Delivery (POD): A POD is an optional document usually accompanying high-value goods. It is signed by the receiver confirming the receipt of shipment in good condition.

Automating logistics and transportation document processing

Manually processing documents is expensive, time-consuming, and error prone. For example, imagine a worker earning $30 per hour spending 10 minutes processing each document. This results in a cost of $5 for each document that is manually processed.

Companies have turned to optical character recognition (OCR) to automate logistics data capture. However, document variability, handwritten notes, and other complexities have proven challenging for legacy OCR solutions. Intelligent OCR solutions, although more capable, require templates to be set up by technical experts for each document and still often return poor results.

Recent advances in AI have led to the emergence of Intelligent Document Processing (IDP) solutions. The tools place intuitive user interfaces on top of OCR and document AI solutions to simplify setup and use. However, most IDP solutions use proprietary OCR/AI that limits their adaptability, provide limited human-in-the-loop (HITL) capabilities, and offer no outcome guarantees (only AI confidence levels).

Next-generation Unstructured Data Processing (UDP) and IDP solutions:

  • Make it easy to use the best available AI model for a given task.
  • Provide comprehensive HITL capabilities and access to curated crowdsourced resources for setup and validation.
  • Offer business outcome guarantees.

Benefits of automating logistics and transportation document processing

  1. Lower costs by 85% or more by automating previously manual logistics data entry tasks.
  2. Reduce errors in routing, delivery, etc., compared to humans who are poorly suited for repetitive, robotic tasks.
  3. Improve customer experience by speeding up logistics issue resolution, personalizing the online experience, and offering self-service options.
  4. Lower risk by automatically anonymizing customer personal identifiable information (PII).

Unstructured Data Processing (UDP) platforms offer clear advantage for logistics document processing

Emerging UDP platforms have several advantages over OCR and IDP solutions, including:

  1. Any data type. These platforms can process any unstructured data type - documents, emails, images, video, and audio - providing you a one-stop-shop for all your logistics data processing needs.
  2. Outcome guarantee. These solutions have moved beyond offering just a confidence level for their AI models. They allow users to define the trade-offs between quality, cost, and speed and automatically allocate resources between AI, humans, and bots to guarantee outcomes for your logistics data processing
  3. Low touch setup. These platforms can break logistics data processing into simpler tasks and use the best human, AI, or bot workers to deliver better results faster and with higher automation rates. They take care of the setup, model selection, training, ongoing maintenance, and creating and deployment of new AI workers to continuously increase automation rates.
  4. AI model agnostic. AI models are evolving and getting commoditized quickly. Rather than investing in proprietary AI models and competing with Googles of the world, they are building platforms that select the available AI model for a given logistics data processing sub-tasks to offer the highest quality results at all times.
  5. Comprehensive human resource management. Humans are critical for the success of logistics data processing. But human resource management is often an afterthought. These companies are creating a curated workforce of crowdsources workers adept at training AI models during deployment and validating results during production for logistics use cases. These platforms include gamification to keep workers engaged and sophisticated escalation rules to ensure a given validation task is completed in time to meet SLAs.

Additional Unstructured Data Processing and logistics resources:

For decades, logistics companies have been trying to automate document and unstructured data processing. They have relied on OCR and, recently, on IDP solutions with mixed results. After COVID and Russia-Ukraine war-driven disruptions, transportation and logistics companies face a growing prospect of global slowdown and possible sessions. They must drive down processing costs by leveraging recent advances in AI-driven solutions. Emerging unstructured data processing (UDP) platforms can significantly simplify logistics data capture by allowing you to quickly extract information from logistics documents and emails with guaranteed quality.

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