AI Meets 4PL Logistics: A Trial Run with Microsoft Bing

We at Wiima wanted to give our 2 cents on the buzz around the modern-day buzzword: AI. We played with the new Microsoft Bing:

1st question: let’s start with an easy one: “What is 4PL logistics?”

Answer: 4PL logistics stands for Fourth Party Logistics. It is a type of logistics service that provides end-to-end supply chain management solutions to businesses. A 4PL provider acts as a single point of contact between the customer and multiple logistics service providers (LSPs) such as carriers, freight forwarders, customs brokers, and warehouses. The 4PL provider manages the entire supply chain on behalf of the customer, including planning, execution, monitoring, and optimization of logistics operations.

Comment: Quite nice, wouldn’t do better myself. This took just 4-5 seconds.

2nd question: “What are the benefits of 4PL logistics?”

Answer: The benefits of 4PL logistics include:

1. Improved customer satisfaction
2. Increased resources for furthering core competencies
3. Easy, scalable options for taking advantage of growth opportunities
4. Access to a single point of contact for all vendors involved in the supply chain
5. Back-end system integration of logistics processes with other business functions
6. Reduced procurement costs and order cycle times
7. Standardization and automation of inbound, outbound and reverse logistics
8. Access to a broader base of suppliers, ensuring lower costs of transportation.

Comment: This one took a bit longer, appr. 10s. Quite an impressive list, all I would add is flexibility. Scalability and capacity flexibility is there but supply chain design flexibility is missing. I think one of the key benefits of operating an extended supply chain is the adaptability to changing customer demands and preferences.

3rd question: “What are the disadvantages of 4PL logistics?”

Answer:

“The disadvantages of 4PL logistics include:

1. Giving up significant control over transportation and logistics operations
2. Potential biases not based on performance, outcomes or efficiency.
3. Difficult transition if removing 4PL provider.
4. Increased costs, hiring a 4PL can be costly as they are responsible for managing every part of your supply chain
5. Limited Operational Control, as the 4PL will manage the entire supply chain, you’ll have little to no control over how they choose to run this aspect of your business.
6. Long-term Agreement.

Comment: Took appr. 20 s. Very relevant and we have come across to these as well with some of our sales prospects that have not realized as sales. However, points 1-5 can be managed with well-defined and balanced KPIs and target setting. Typically, the agreements are long-lasting. However, our thinking in Wiima is that as we are delivering “Logistics as a service” the service must fulfil its quality and cost-efficiency promises every month, every day and every transaction. If we are not fulfilling this promise, it should be easy for customers to opt-out.

Those were fairly easy, let’s make it harder with questions that require evaluation of different options.

4th Question: “What is the best way to organize RFQ for logistics services?”

Answer: An RFQ (Request for Quotation) is a document that invites potential suppliers to submit a quote for a specific service or product. In your case, you are looking for logistics services to transport your goods from one place to another.
According to 1, an RFQ is usually used to award a standardized service such as a regular lane or spot quote. If you need more detailed proposals from different transportation companies, you may want to use an RFP (Request for Proposal) instead.

• • Some of the best practices for organizing an RFQ for logistics services are:
    Define your scope of work clearly and include all the relevant details such as origin, destination, volume, weight, dimensions, packaging, mode of transport, service level, delivery time, etc.
  • Specify your evaluation criteria and how you will compare the quotes from different suppliers. For example, you may consider price, quality, reliability, experience, reputation, etc.
  • Provide a realistic deadline for submitting the quotes and indicate how and when you will communicate the results.
  • Attach any supporting documents or templates that the suppliers need to fill out or follow. For example, you may provide a standard quotation form, a contract template, or a list of terms and conditions.
  • Invite qualified and reputable suppliers who have experience in providing the logistics services you need. You may also consider using online platforms or directories to find potential suppliers.
  • Review the quotes carefully and verify the information provided by the suppliers. You may also request references or samples to check their quality and performance.
  • Negotiate the best deal with the selected supplier and finalize the contract.

I hope this helps you organize your RFQ for logistics services. If you need more information or examples, you can check out some of the web search results below. 😊

Comment: Spot on. Couldn’t do better myself.

5th question: “What is your prediction on transportation costs in 2nd half of 2023, will it be cheaper or more expensive than 1st half of 2023 and why?”

Answer: Transportation costs are the expenses related to moving goods or people from one place to another. They depend on various factors such as distance, mode of transport, fuel prices, labor costs, demand and supply, etc.
Predicting transportation costs for the second half of 2023 is not an easy task, as there are many uncertainties and variables involved. However, based on some of the web search results, here are some possible scenarios and trends that may affect transportation costs in the future:

• • According to 1, global travel prices will continue to rise significantly in 2023 due to inflationary pressures, a recessionary environment, geopolitical conflicts, and climate change events. This may impact the cost of air freight, passenger travel, and ground transportation.
  • According to 2, nations will be sceptical about cross-border trade cooperation and will seek domestic self-sufficiency or friend-shoring relationships with like-minded countries. This may affect the availability and cost of raw materials, intermediate goods, and finished products that are sourced or shipped internationally.
  • According to 3, transportation costs for businesses are mainly driven by freight transportation and last-mile delivery. Freight transportation costs depend on factors such as line haul, pickup and delivery, terminal handling, billing and collecting, and insurance. Last-mile delivery costs depend on factors such as distance, traffic congestion, vehicle type, driver wages, fuel consumption, etc.
  • According to 4, transport businesses can minimize their transportation costs by optimizing their route planning and scheduling, investing in technological solutions such as transportation management systems, maintaining their vehicles and equipment properly, and prioritizing safety.

Based on these sources, it is possible that transportation costs will be higher in the second half of 2023 than in the first half of 2023 due to the following reasons:

• • The global economy may still be recovering from the impacts of the COVID-19 pandemic and facing challenges such as inflation, recession, trade wars, and environmental disasters.
  • The demand for transportation services may outstrip the supply of transportation capacity due to factors such as e-commerce growth, consumer preferences, seasonal fluctuations, etc.
  • Fuel prices may increase due to geopolitical tensions, supply disruptions, or environmental regulations.
  • The labor costs may increase due to driver shortages, wage hikes, or employee benefits.

However, these are only possible scenarios and not definite predictions. Transportation costs may also vary depending on the specific industry, location, mode of transport, and service level that you are dealing with. Therefore, it is advisable to monitor the market trends closely and plan your transportation budget accordingly. You may also want to explore ways to reduce your transportation costs by improving your operational efficiency and optimizing your transport operations.

I hope this answer gives you some insights into the possible future of transportation costs. If you want to learn more about this topic or find some useful resources, you can check out some of the web search results below. 😊

Comment: Quite nice. This arrived relatively fast as well, appr. 40 I was expecting: ”hard to predict”, “on the other hand and then the other hand” (no wonder Truman wanted a one-handed economist)… but there was an opinion!

Closing Remarks: A Tete-a-Tete with AI

Well, that’s a wrap folks, our mini-adventure with Microsoft Bing. To be honest, I’m both impressed and pleasantly surprised. AI certainly held its ground, even when thrown curveballs about the world of 4PL logistics. And dare I say, it pitched some pretty solid shots back.

AI gave us quick, in-depth responses to our queries, even venturing boldly into the grey area of forecasting transportation costs for the second half of 2023. Hats off to that! So what does this little experiment tell us? For one, AI is more than a flashy buzzword. It’s an evolving force that’s starting to hold its own, even in the complex universe of logistics. And let’s be real – that’s pretty awesome.

However, let’s not forget, it’s still a tool – an impressive one, no doubt – but still a tool. It’s the human insight that separates the wheat from the chaff. AI may spit out the facts, but it takes a seasoned professional to really understand what they mean. To weave them into a larger narrative, and create real-world, adaptable strategies.

For us at Wiima, AI isn’t the bogeyman here to take our jobs. No, it’s a companion, a handy sidekick, offering us the ability to make data-driven decisions at lightning speed. But hey, even the best sidekicks can’t outshine a good hero – it’s us, the human logisticians who bring the real ‘why’ and nuanced understanding to the table.

So, as we step back into the daily grind, our stint with Bing reaffirms our belief that the future of 4PL logistics lies in marrying the analytical prowess of AI with the experience, intuition, and adaptability of humans.

In this ever-evolving logistics landscape, we’re not just surviving, but thriving, learning, and adapting every step of the way. So, here’s to more such experiments and exciting times ahead! And remember, in the world of logistics, AI or not, we’ve always got your back.

PS. Jussi was pondering how to close the article. Our esteemed marketing team came to our rescue. The “Closing Remarks” chapter of the article was written with ChatGPT using the following prompt: “Can you write a very short closing chapter to this article, match the chapters style with the article writers commenting style”

Comment: What a world we live in… I would have made it shorter and avoided so many repeats.

ABOUT THE AUTHOR:

Jussi Laaksonen, Key Account Manager at Wiima Logistics, is a dynamic logistics and supply chain professional with an impressive portfolio. Boasting a wealth of knowledge and experience in sourcing, procurement, supply chain management, and logistics, Jussi brings with him a unique blend of skills and leadership abilities, honed through a distinguished career at prestigious companies like Nokia, Teleste, and Relex.

Jussi plays a pivotal role in the evolution of Wiima’s 4PL service offering. Leveraging his insights and industry expertise, he contributes significantly to the service development process, always striving to push the boundaries of what’s possible.

A passionate advocate for the logistics and supply chain industry, Jussi’s enthusiasm is infectious. He thrives on creating meaningful relationships with clients, dedicated to providing them with the highest level of service.