Artificial intelligence (AI) is increasingly becoming integral to parcel delivery companies, enhancing interactions with shippers and consumers. Major players like FedEx, UPS, and various smaller firms are leveraging AI to provide more accurate shipping time estimates, reduce package theft, automate customer service, and help customers better understand their delivery data.

FedEx has highlighted AI as a transformative force in its operations. The company utilized AI algorithms to proactively manage package volume in anticipation of severe winter weather at its Memphis hub earlier this year. Meanwhile, UPS has applied AI to align network capacity with volume fluctuations, helping to control labor costs.

AI's capabilities extend to customer-facing applications, allowing parcel delivery companies to analyze vast amounts of data related to packages and external factors such as weather and traffic. Sri Sripada, managing director at West Monroe, noted that many companies are successfully implementing AI innovations throughout their networks, enhancing delivery efficiency for a broad customer base.

FedEx now offers a two-hour delivery time window for most shipments using its Global Delivery Prediction Platform, which integrates real-time shipment data with last-mile delivery information. “Customers want near real-time visibility to their shipments,” said Tony Kreager, FedEx's enterprise VP of data, digital, and commercial technology.

Alternative carriers like Veho are also utilizing AI to refine delivery time estimates. The company factors in various metrics beyond standard travel times, adjusting estimates based on specific delivery conditions, such as the size and weight of packages. Veho is exploring generative AI to evaluate driver compliance with delivery instructions.

UPS has introduced its DeliveryDefense tool, which allows shippers to reroute packages at risk of theft to safer drop-off locations. This AI-driven software predicts the likelihood of successful deliveries based on historical data. UPS EVP Bala Subramanian stated that AI identifies a small percentage of addresses that account for a significant share of shipping losses.

Internally, UPS is using generative AI to streamline customer service, reportedly reducing response times by 50% through automated handling of approximately 52,000 daily customer emails.

AI is also aiding shippers in decision-making. ShipScience launched its ParcelAI chatbot to facilitate quick responses to inquiries about shipping data, integrating with major carriers like FedEx and UPS. Founder Anthony Robinson emphasized that the tool aims to help logistics professionals efficiently navigate complex parcel data.

Despite its potential, the integration of AI presents challenges. Companies must recruit skilled personnel, build the necessary infrastructure, and ensure access to clean and accurate shipping data. Sripada cautioned that the availability of high-quality data is essential for effective AI implementation.

As AI continues to reshape the parcel delivery landscape, its influence on operational efficiency and customer engagement is expected to grow, making deliveries more reliable and information more accessible.