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AI in the Transportation and Logistics Market to Reach US$6.5 Billion By 2025


The global AI in the transportation market is predicted to reach up to US$3.8 billion by 2025, is also estimated to grow at a CAGR of 15.8% during 2020-2025. The rapid use of machine learning technology for product innovation such as self-driving cars, parking, and lane-change assists, and smart energy systems are highly fueling AI in the transportation market. Furthermore, the growing need for advanced transportation planning, driver behavior, data management, traffic signaling, and so on are surging upon the growth of the market. These significant factors are, therefore, fueling the growth of AI in the transportation market during the forecast period of 2020-2025.

North America is estimated to be the largest market for artificial intelligence in transportation, in terms of value. Trucks are the major contributor to the transportation sector of North America. The regulatory developments such as Compliance, Safety, and Accountability (CSA) and Hours of Service Solution (HOS) revisions are expected to drive the growth of the transportation industry in the region. Hence, the artificial intelligence transportation market is expected to see substantial growth. Also, the strong financial position of the region allows these countries to invest heavily in leading technologies in the field of artificial intelligence.

The logistics vertical is also undergoing a fundamental transformation with the increase in the amount of data and the number of devices utilized, reduction in costs to maintain the competitiveness, and urge to maintain the required stock levels, (staged and in-transit) to ensure on-time delivery and shortages. All this requires some level of automation in the supply chain to allow for timely decision-making.

Artificial intelligence is in a nascent stage in logistics but is expected to grow at a rapid pace. It is expected to reform the logistics industry with a high level of automation in manufacturing, logistics, warehousing, and last-mile delivery. Machine and human collaboration will enable smart order picking in logistics and smart glasses will enable smart hands-free operations. On the other hand,  automated vehicles and drones are expected to change the paradigm of the logistics industry.

The companies are increasingly testing artificial intelligence in logistics to improve on the last-mile delivery, reduce the time to go to market, and provide for the required customization to customers. As per research, the artificial intelligence market in logistics is predicted to grow at a CAGR of 42.9% over 2017-2023 to reach US$6.5 billion by 2023.

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