Chatbots in Logistics and Supply Chain: How Do Companies Like UPS Benefit from Chatbots?

Anastasia Morozova
Anastasia Morozova
Chief Operating Officer

Most of us have probably interacted with chatbots one way or another – while shopping online or planning a holiday.

The majority of users agree that chatbots significantly improve the customer experience.

Bots are always available, they do not make mistakes, they are intuitive and easy to use. Additionally, chatbots are a great solution for those who do not feel comfortable calling the support centers.

The value of chatbots for ecommerce and customer service businesses is apparent.

However, there is another industry that is adopting chatbots with an increasing speed, and that is logistics and supply chain business.

From the logistics point of view, there are two ways chatbots can benefit the company:

  • Customer-facing operations, such as delivery booking, shipment tracking, delivery-related inquiries;
  • Supply chain operations, such as warehousing, fleet management, navigation.

We will look into both sides of the chatbot application for logistics to see how business can benefit from them.

chatbots for logistics

See also: How Chatbots Will Reduce Business Operating Costs

Chatbots in customer-facing logistic operations

Here, the chatbot advantages are not so industry-specific, as they are mostly the same as in other industries. To a large extent, for a customer, chatbots present an easier way of communicating with the business.

One of the recent examples of a customer-serving chatbot is the UPS voice chatbot that operates via the Google Assistant service.

This global transportation company now can “talk” to its customers via the Google Home speaker answering their questions about whether UPS has delivered anything or whether any deliveries are expected shortly.

The UPS chatbot works together with the UPS My Choice service for personalized delivery planning and tracking. Thus, when talking to the bot, you do not even need to provide the tracking number – the chatbot will pull it out of your data stored in the UPS database.

chatbot development ups

Generally, how can a chatbot help logistics company customers? They can handle most of the low-level functions that have been traditionally performed by the contact center personnel:

  • Request a delivery. Similarly to making a purchase or booking a service, users can request deliveries via a logistics chatbot. Pickup and delivery addresses, dates and times, additional services, such as insurance or express shipment – the chatbot can handle all these details, process the order and issue a receipt with all the necessary information.
  • Amend an order. Users can change or cancel a delivery via a chatbot using the tracking number that was issued after the order confirmation. The chatbot may retrieve the special conditions, if any, from the database and apply them in each particular case.
  • Track a shipment. Of course, we are used to tracking our shipments on the delivery company website via a special form. Just paste in or type your shipment number – and the current status of your delivery is displayed. Chatbots can do the same but better.
    First, they all work within the same user interface – Facebook Messenger, Slack or Skype, thus, you do not need to explore a new form every time.
    Second, the chatbot will require you to enter the shipment number only once, and with any subsequent inquiry will only update the information. In an online form, you need to enter the number each time you look up the shipment status.
  • Get answers to the common questions. Chatbots can return pre-programmed answers to the frequently asked questions about the service – the rates, the refund conditions, the served destinations, the delivery terms.
  • Get delivery notifications. The chatbot can inform you about your shipment delivery status and provide all details necessary to collect it. Just like an email or SMS, but within the usual messenger interface.

Basically, for the customer, a logistics chatbot has all the advantages that in any other industry – it provides an easy channel of automated communication and information retrieval.

chatbot development

Read also: In 2019 Chatbots Join the Enterprise: Here Is How Exactly

Chatbots in supply chain operations

However, chatbots can assist not only the customer-facing side of a logistics business but also the operational processes.

The logistics business heavily depends on various data that comes from different sources and needs to be processed, often simultaneously.

Every day, a logistics company has to take care of the following data:

  • Customer orders. New orders received from customers, orders in progress, delayed orders, canceled orders, unclaimed orders – all these need to be processed in real time and the flows must be updated according to the current situation.
  • Warehouse matters. The inventory, the expected deliveries, the floor plans and order tracking information, the warehouse locations must always be up to date for the proper operation.
  • Fleet information. The company must always know how many vehicles are currently en route, idle, in maintenance, or out of order. To avoid delays and customer claims, the company must be prepared to replace a broken vehicle or increase their number when the demand is especially high. For that purpose, the fleet information must be updated and adjusted as soon as possible.
  • Personnel information. While self-driving vehicles are still too few and far between, logistics companies rely on drivers to deliver goods. Thus, an updated roster showing personnel currently working, on standby, on vacation, on sick leave, or on a day off is in the must-have league.

While a reputed logistics business is sure to have all this info properly organized and maintained in a database, by implementing a chatbot may help to optimize the information used for employees.

A chatbot having access to the database information can answer inquiries directly within the messenger with no need to switch to different pages or websites.

For example, a forklift operator looking for a particular package in a warehouse can simply ask the chatbot for the exact sector, container or shelf where the package can be found.

messenger chatbot for logistics

Logistics chatbot integrations with other technologies

Chatbots, being themselves an advanced technology, show truly amazing results when integrated with other technologies.

Internet-of-Things

Connected devices are already widely used in logistics companies for warehouse and inventory management.

Various connected devices, such as temperature and humidity meters, sensors, counters send their data informing about changes in the warehouse conditions, out-of-stock items, items added or moved to other places, and of many other things.

When the database storing the data received from the IoT devices is connected to a chatbot, the flow of warehouse management gets even easier.

The chatbot can inform the manager or worker of the shipment arrival, the absence of a particular item, a breakdown of the conditioning system in the warehouse that may result in the goods damage.

Voice recognition

An advanced chatbot with voice recognition can be a valuable addition to a logistics business where workers often are either driving various vehicles or have their hands full.

Voice can become the channel of communication when the worker cannot reach for the smartphone or tablet or must keep their eyes on the highway.

A special skill for Amazon Alexa or Siri (yes, they are chatbots, too!) can open great opportunities.

A forklift operator can drive around the warehouse following the voice directions from the chatbot without stopping and looking at the floor plan. A truck driver can receive navigation instructions from a voice assistant right on the road.

Of course, you may say, there are lots of navigator applications on the market, but a chatbot is something you can “talk” to as well.

At the same time, voice assistants can also help logistics companies to reach their customers, too. The UPS chatbot that we mentioned before responds to plain speech answering delivery-related questions.

Big Data

Chatbots are an excellent source of information that they can gather quickly, easily and in large quantities.

They can collect and organize data from customers, warehouses, suppliers, vehicles, and personnel. This data can then be analyzed and used for operations planning, machine learning, promotional campaigns.

Based on the data collected during the conversations with customers, chatbots can provide valuable insights on the success of promotional campaigns, the quality of customer experience, the effectiveness of communication channels.

The data received from the chatbot can help to plan future campaigns and tweak the existing procedures to achieve the maximum effect.

chatbots in logistics

Advantages of chatbots for logistics companies

Chatbots bring considerable advantages to the companies in more than one way:

  • Cost reduction. This is the first thing everybody thinks of when the chatbots benefits are mentioned. Any automation can save costs by replacing certain human functions, and in logistics, chatbots can take over the tasks of support center operators, customer agents, warehouse workers. By routing simple, repetitive tasks, such as tracking deliveries or monitoring the warehouse conditions, to a chatbot, the business can assign employees to other positions.
  • Better availability for customers. With chatbots operating 24/7, customers can get assistance at any time and can quickly adjust their plans according to the information provided by the chatbot. Improved customer experience means more new and returning customers. Thus, the benefit is quite clear.
  • Optimized time management. With a company chatbot having all information in the same place, employees can have access to anything they need from within the same interface. When all information is organized as a continuous chat feed that can be scrolled up or down when necessary, the working flows take significantly less time than in an application where each department has a separate page or tab.
  • Proactive notification of any important events. A chatbot, being primarily a communication tool, is a perfect vehicle for sending messages to the company personnel. Warehouse workers can be quickly notified of any changes in the conditions that require their attention or of the arrival of a new shipment. The managers will be notified of any changes in the personnel rosters or fleet schedules.

As in many other industries, chatbots bring significant benefits to logistics and delivery companies. With a chatbot, the company takes the in-house communication to a new level, as well as improves its customer service significantly.

Of course, to achieve the optimal and satisfactory result, the chatbot should be professionally built and based on the advanced technologies, such as artificial intelligence and voice recognition.

Logistics business is usually a multi-sided operation where many factors must be considered simultaneously to make proper decisions.

A chatbot concentrating all relevant information in the same place can be a great tool for facilitating the logistics management for companies of different sizes.

We strongly recommend implementing a chatbot to enhance the business opportunities of your logistics business.

We are ready to consult you on the chatbot development matters and the aspects of chatbot implementation in your particular case.

Contact us and browse our website to evaluate our experience in chatbot development.

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