Managing shipping container capacity is a huge logistical undertaking, but one that is getting easier thanks to the availability of new artificial intelligence (AI) and business analytics tools.
Billions of dollars of seaborne trade needs to be accommodated every year and no one knows this better than Kotahi, an Auckland-based supply chain collaboration specialist that works with over 40 importers, exporters and logistics companies to ensure enough container capacity is available.
Demand forecasting is crucial to the success of Kotahi's business, particularly as over a third of exports are perishable – our primary sector products being sought after around the globe. But until recently, Kotahi's forecasting systems for perishable goods were largely manual, revolving around Microsoft Excel spreadsheets and taking up four days or more of staff time each month to process.
A better solution, it turned out, was close at hand. Kotahi was already using the financial reporting tool Exceed Analytics for Microsoft Dynamics 365 from Kiwi tech firm UXC Eclipse. Kotahi's management team was also familiar with Cortana Intelligence, Microsoft's fully managed big-data and advanced analytics suite.
Data scientists from Microsoft and UXC Eclipse worked together to build automated demand-forecasting tools that would use Microsoft's Azure Machine Learning platform and operate in the cloud as a reasonably priced subscription service.
The new system analysed historical data to make predictions about future demand and container capacity requirements.
"Forecasting is a challenge for most primary industry exporters, impacted not only by changing markets but variables like climate and food system complexities," says Kotahi chief executive officer David Ross.
"Being able to forecast at a weekly level, on their destination and container type, in order to secure the capacity on weekly service ships is not easy; this is where AI technology has a role to play."
The results were nearly instant. The four days of employee time each month devoted to manual forecasts shrank to 30 minutes, with a much more straightforward work flow that uses Microsoft's Power BI dashboards to more readily put business intelligence tools in the hands of decision makers.
Most importantly, the accuracy of Kotahi's forecasts jumped from 80 per cent to over 90 per cent. The resulting supply chain efficiencies are now saving Kotahi and its clients more than $1million from detention cost minimisation, airfreight savings and improved capacity utilisation.
Shipping logistics is just one industry being transformed through the use of Microsoft's cloud-based AI and analytics tools and for Kotahi, its new AI-driven forecasting system is just the beginning.
Ross and his team are now testing a prototype of a cargo tracking map based on a number of Microsoft products which will allow Kotahi and its clients to track and trace cargo movements around the world in real-time.
AI isn't a silver bullet for all business problems, but with the right approach, Microsoft's offerings can help everyone achieve more.
For more information on the Microsoft and Kotahi partnership, visit the following website: https://news.microsoft.com/en-nz/