Artificial Intelligence (AI) in Logistics Market Size, Share, and Trends 2024 to 2033

Artificial Intelligence (AI) in Logistics Market Size and Growth

The global artificial intelligence (AI) in logistics market size was USD 12.24 billion in 2023, calculated at USD 17.96 billion in 2024 and is expected to reach around USD 565.82 billion by 2033, expanding at a CAGR of 46.72% from 2024 to 2033. The rising developments in the logistics sectors across the world are driving the growth of the artificial intelligence (AI) in logistics market.

Artificial Intelligence (AI) in Logistics Market Key Takeaways

• The North America artificial intelligence (AI) in logistics market size reached USD 5.14 billion in 2023 and is predicted to cross around USD 240.47 billion by 2033, at a CAGR of 46.89% from 2024 to 2033.
• North America led the market with the largest revenue share of 42% in 2023.
• Asia Pacific is expected to experience the fastest growth rate during the forecast period.
• By application, the self-driving vehicles and forklifts segment dominated the market in 2023.
• By application, the automation of the ordering and processing segment is estimated to grow with the highest CAGR during the forecast period.
• By technology, the machine learning segment has held a major revenue share of 47% in 2023.
• By industrial verticals, the retail segment has contributed more than 31% of revenue share in 2023.

U.S. Artificial Intelligence (AI) in Logistics Market Size and Growth 2024 to 2033

The U.S. artificial intelligence (AI) in logistics market size was valued at USD 4.11 billion in 2023 and is expected to be worth around USD 193.58 billion by 2033, at a CAGR of 46.99% from 2024 to 2033.

North America held the largest market share in 2023 and is expected to maintain its dominance throughout the forecast period. The growth of this region is mainly driven by the rising government initiatives in countries such as the US, Canada, and Mexico to develop the AI infrastructure. For instance, in May 2023, the U.S. National Science Foundation announced that it would invest around US$140 million to inaugurate seven National AI Research Institutes. These institutes will promote AI research and development (R&D) infrastructure and support the growth of a diverse AI workforce.

The rising number of modern warehouses, along with the presence of several automotive and healthcare companies, has increased the demand for the integration of AI in the logistics industry. Moreover, the advancement in internet facilities, along with the rising demand for security systems in the logistics sector, has boosted the market growth in this region. The presence of an established retail industry with several supermarkets and local shops, along with a well-established logistics sector in this region, propels the market growth. Furthermore, the presence of several AI in logistics companies such as Alphabet, Microsoft, IBM, Amazon and some others boost the growth of the Artificial Intelligence (AI) in logistics market.

• In November 2022, Microsoft launched the Command Center. Command Center is a Microsoft supply chain platform that helps different organizations enhance efficiency in logistics sectors.

Asia Pacific region is expected to be the fastest-growing region during the forecast period. The growth of this region is mainly driven by the growing developments in science and technology in several countries such as India, China, South Korea, Japan, and others. Also, the growing interest from the public and private sectors in development & research for developing AI industries has boosted the market growth. The growing advancements in manufacturing industries, along with rising developments in the food and beverage sectors, are driving the artificial intelligence (AI) in logistics market growth. Furthermore, the presence of AI in logistics providers such as Yojee Limited, Pluto7 Corporation, Alibaba Cloud, DJI, Leapmind, and others drives the growth of AI in the logistics industry.

• In March 2024, the government of India announced that it would invest more than US$ 1.2 billion in developing the AI infrastructure and researching large language models. This investment will also be used to fund AI startups and develop AI applications for public sector entities in India.
• In March 2023, Alibaba Cloud launched EasyDispatch in Malaysia. EasyDispatch is an AI-driven logistic solution that can help improve the performance of the logistics industry across the Asia-Pacific region.

Market Overview

The artificial intelligence (AI) in logistics market is an important part of the logistics domain. This industry deals with the use of AI in managing and transporting various products across the globe. This market is expected to grow significantly with the rise in the number of government initiatives for developing the AI infrastructure across the world. This market integrates several technologies that mainly include machine learning (ML), context awareness computing, natural language processing (NLP), and computer vision.

There are several applications of AI in logistics that mainly include self-driving vehicles and forklifts, machine and human collaboration, planning and forecasting, automation of ordering and processing, and some others. This industry mainly deals with delivering products from several end-user industries such as automotive, retail, healthcare, food and beverages, manufacturing, and others to people across the world. AI in the logistics industry is expected to grow exponentially with the growth in AI and logistics industries.

Artificial Intelligence (AI) in Logistics Market Growth Factors

• The technological advancements in the logistics industry are expected to drive the growth of Artificial Intelligence (AI) in logistics market.
• The rising government initiatives to strengthen the AI sector have driven market growth.
• The growing developments in transportation across the world foster market growth.
• The ongoing trend of quick commerce and AI-powered shipping has boosted market growth.
• The rising trend of online shopping and the integration of modern technologies in several industries has boosted the market growth.
• The growing investments from public and private sector entities for developing the logistics industries also boost the Artificial Intelligence (AI) in logistics market growth.
• The increasing penetration of the internet, along with the rising use of smartphones across the world, drives market growth.
• The growing developments of international trade are likely to impact the market growth positively.
• The rise in the number of modern warehouses for logistics operations also propels market growth.
• The increasing advancements in freight infrastructure across the world foster Artificial Intelligence (AI) in logistics market growth.

Artificial Intelligence (AI) in Logistics Market Scope

Artificial Intelligence (AI) in Logistics Market Dynamics

Driver

The growing integration of AI in logistic operations

The logistics industry has developed rapidly due to the advancements in sciences and modern technologies. The ongoing development in AI and ML technologies has also contributed significantly to the development of the logistics sector. The integration of AI in modern warehouses also helps in database management, packaging, manufacturing, enhanced warehouse safety, and some other operations that help maintain logistics operations. Thus, rising developments in AI technologies in the logistics sector are expected to drive the growth of artificial intelligence (AI) in logistics market during the forecast period. Moreover, AI companies have started developing new AI technologies for logistics operations and adopted several strategies such as product launches, partnerships, joint ventures, and some others, thereby driving the growth of Artificial Intelligence (AI) in logistics market.

• In January 2024, Accenture joined hands with Mujin. This joint venture aimed at using machine learning and AI to connect management and operational data for accelerate data-driven management in logistics and manufacturing industries.

Restraint

Inaccessible data and diverse data sources

The integration of AI in logistics industry is an ongoing trend but there are some challenges associated with it. Firstly, the inaccessibility of appropriate data can lead to improper management of the supply chain. Secondly, the availability of data from unknown sources can also lead to the failure of the logistics sector. Thus, inaccessibility of data and complexity of diverse data sources is expected to restrain the growth of the Artificial Intelligence (AI) in logistics market.

Opportunity

Generative AI will shape the future of the logistics industry

The logistics industry has experienced several developments with the advancements in science and technologies. The developments in generative AI play an important role in the logistics industry for several operations. Some of the most important logistic operations include route optimization, demand, forecasting, warehouse & inventory management, supply chain automation, predictive maintenance, dynamic pricing, and others. Thus, the integration of generative AI in the logistics sector is expected to create ample growth opportunities for the Artificial Intelligence (AI) in logistics market players in the future.

• In September 2023, FourKites launched Fin AI. Fin AI is a generative AI solution that helps automate several logistic operations and identify opportunities for optimization in the logistics sectors.

Application Insights

The self-driving vehicles and forklifts segment held the largest market share in 2023 and is expected to continue its dominance during the forecast period. The growth of this segment is generally driven by the growing integration of AI in autonomous vehicles for the logistics industry. Also, the growing trend of AI-based forklifts for logistics industries is driving the growth of artificial intelligence (AI) in logistics market. Moreover, the rising development of self-driving trucks to streamline the supply chain and enhance the shipping process is likely to boost market growth.

• For instance, in May 2024, Volvo partnered with Aurora. This partnership is being done to launch the Volvo VNL Autonomous truck, which will strengthen the logistics sector.
• In February 2024, ArcBest launched an autonomous forklift. This forklift is named ‘Vaux Smart Autonomy,’ which helps streamline the logistics process in warehouses.

The automation of ordering and processing segment is expected to be the fastest-growing segment during the forecast period. The growth of this segment is generally driven by the growing development in the retail and automotive industries. Also, the rising integration of AI and ML technologies in modern warehouses to automate order processing and other activities is likely to boost market growth. Moreover, AI service providers are launching new software for the automation of order processing in the logistics sector, which, in turn, drives the growth of Artificial Intelligence (AI) in logistics market.

• In June 2024, GrubMarket launched AI Orders. AI Orders is an AI-based automated order processing software that is designed for wholesalers and distributors to register customers' automatic orders.

Technology Insights

The machine learning segment dominated the market in 2023 and is expected to grow at the fastest rate during the forecast period. The growth of this segment is generally driven by the growing development in logistics sectors across the world. Moreover, the adoption of machine learning technology for warehouse management and demand prediction has driven market growth. Also, ML technology is used to analyze traffic patterns and distances between different locations, which are important parts of logistics for route optimization and driving artificial intelligence (AI) in logistics market growth. The rising application of machine learning for workforce planning and fraud detection in payment systems, along with the development of machine learning-based systems for use in the logistics sector, is expected to boost market growth to some extent.

• In March 2024, Locus Robotics launched the Locus Hub business intelligence engine. This system uses the LocusOne platform and traditional reporting tools to deliver prescriptive and predictive insights to maximize productivity, lower costs, and increase the efficiency of warehouse workers.

The contextual awareness segment is estimated to grow significantly during the forecast period. This segment is generally driven by rising demand for contextual awareness computing in the construction and retail industries. Also, the growing application of contextual awareness in the logistics sector to enhance the results of process mining drives market growth. Moreover, the rising use of contextual awareness computing in warehouses for security purposes is expected to boost the growth of Artificial Intelligence (AI) in logistics market.

• In October 2023, Syndeo launched Experience Apps for the Retail sector. This app comes with large language models and is integrated with context awareness, sentiment analysis, and robust guardrails that enhance the streamlining of logistics operations in various retail sectors.

Industry Verticals Insights

The retail segment held the largest artificial intelligence (AI) in logistics market share in 2023. The growing number of online supermarkets across the world. Also, the rising proliferation of smartphones allows people to purchase retail goods from e-commerce stores, which, in turn, increases the demand for AI in logistics sectors, thereby driving market growth. Moreover, the role of AI in inventory management for synchronising online retail along with developing flexible logistics network drives the growth of market. Moreover, the rise in the number of e-commerce sites, along with the growing integration of AI by retail companies to streamline the demand and supply chain, is expected to drive Artificial Intelligence (AI) in logistics market growth during the forecast period.

• In March 2024, Walmart launched an AI-powered logistics product. This launch aimed to strengthen the supply chain of products demanded by customers across the world.

The food and beverages segment is growing significantly during the forecast period. This segment is generally driven by the growing number of food and beverage companies across the world. Also, the rising development of AI related to warehouse management in the food and beverage industries is driving market growth. The growing application of AI to improve supply chain transparency and minimize food spoilage is driving the growth of AI in the logistics market. Moreover, rising advancements in AI for procurement services in the food and beverage industries, along with a growing number of partnerships among AI service providers and beverage companies, are likely to boost market growth.

• In May 2024, Microsoft announced a partnership with Coca-Cola. Through this partnership, Coca-Cola paid a hefty amount of US$ 1.1 billion to Microsoft for using Microsoft’s artificial intelligence and cloud computing services to streamline its supply chain, thereby strengthening the logistics sector.

Recent Developments

• In May 2024, Grydd launched a new AI-enabled supply chain and logistics software. This software includes Route Prediction AI, Sustainability AI, Demand Planning AI, Cargo Optimization AI, and Collaboration Hub AI, which help control the overall logistics ecosystem.
• In March 2024, Uber Freight launched an AI-based tool for logistics operations. This AI tool integrates an AI-powered Transportation Management System, Insights AI, and Uber Freight Exchange to streamline a smooth logistics operation across various places around the world.
• In March 2024, Cart.com launched Constellation AI. Constellation AI comes with predictive modeling, powerful machine learning algorithms, and generative AI for efficient management and precision in inventory planning and logistic operations.
• In March 2024, Dexory partnered with DB Schenker. Through this partnership, DB Schenker will use Dexory’s AI technology to increase the precision and efficiency of logistic operations.
• In March 2024, Teradyne Robotics announced a partnership with Nvidia. Through this partnership, Teradyne will use Nvidia’s AI computing technology in the industrial robots for logistics operations.
• In January 2024, ITS Logistics launched a Container AI. Container AI is a container management platform that helps in end-to-end container management and visibility, trends and analytics, and demurrage + detention insights that increase the overall efficiency of the logistics process.

Artificial Intelligence (AI) in Logistics Market Companies

• Alphabet Inc.
• Amazon.com Inc.
• IBM Corp
• Microsoft Corporation
• Oracle Corporation
• Intel Corp
• NVIDIA Corporation
• Transportation Applied Intelligence LLC
• Yojee Limited
• Pluto7 Corporation

Segments Covered in the Report

By Application

• Self-driving Vehicles and Forklifts
• Machine and Human Collaboration
• Planning and Forecasting
• Automation of Ordering and Processing
• Others

By Technology

• Machine Learning
• Context Awareness Computing
• Natural Language Processing
• Computer Vision

By Industrial Vertical

• Automotive
• Retail
• Healthcare
• Food and Beverages
• Manufacturing
• Others

By Geography

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa