AI Order of Effects

Sorry it has been a while since the last newsletter; I always feel it's better to write when there is something potentially interesting to share rather than on a set cadence.

The impact of AI in the supply chain continues to gather pace, and now we on the cusp of realizing real-world applications. Even here at Ship Angel, next month we will announce a groundbreaking AI capability that addresses a long standing industry challenge on a global scale.

What’s particularly fascinating is to consider where this trajectory could lead in the near future. The implications of AI advancements in the supply chain are profound, especially given the vast amount of manual tasks and the mountains of semi-structured data we currently manage. We stand at the threshold of a revolution that will bring unparalleled efficiency and insight to the industry.

Initially, these AI-powered solutions will deliver first-order effects. For example, imagine a globally standardized booking API that can create and confirm ocean bookings in seconds. Picture a shipment process streamlined to require only minimal human interaction. Envision the ability to dynamically predict and offer real-time freight pricing, or the deployment of warehouse robots that autonomously optimize inventory management.

To draw a parallel, consider the introduction of the Jet Age in the 1950s. The immediate impact was the doubling of travel speeds, halving the time needed to journey from point A to point B. However, the second and third-order effects were equally transformative: Hawaii emerged as a major tourist destination, Nike was born from the import of Japanese running shoes, and major league sports expanded from the Eastern U.S. to the entire nation.

Now, let’s imagine the second and third-order effects that AI will have on the supply chain over the coming decade. We could see the near-total elimination of manual tasks, saving Millions of hours. Vessels might achieve 100% sailed-on-board utilization, and we may attain near-perfect predictability for product availability on shelves.

We are living through a remarkably exciting era. It’s essential to consider how AI's significant impacts will not only streamline existing processes but also create entirely new opportunities—many of which we have yet to fully envision.