A Balanced Approach to AI: Why the European AI Consultation Matters for Logistics

22 August 2024

The European AI Office recently launched a Multi-stakeholder Consultation on trustworthy general-purpose AI models under the AI Act, which came into force on August 1. This initiative is crucial as it will shape the rules for AI model providers and other stakeholders, addressing key issues such as Transparency and copyright, Risk identification and assessment measures for systemic risks, Risk mitigation measures for systemic risks, and Internal risk management and governance for general-purpose AI model providers. The European Commission plans to establish four working groups on these themes, making this consultation highly relevant to both regulators and the logistics sector.

As logistics companies increasingly adopt AI-driven solutions to optimise supply chains, manage inventory, and enhance last-mile delivery, the development of a robust and transparent regulatory framework becomes essential for the following reasons:

Transparency and Accountability: AI models play a critical role in logistics, particularly in decision-making processes like route optimisation and demand forecasting. New rules should ensure these AI models operate transparently, enabling logistics companies to understand and trust the technology they use. This is important for maintaining customer trust and ensuring regulatory compliance.

Risk Identification and Mitigation: The logistics sector faces a variety of risks, including disruptions from unexpected events, cyber threats, and operational inefficiencies. A focus on systemic risk identification and mitigation measures will help logistics companies better anticipate and address these risks, ensuring smoother operations and minimising downtime.

Internal Risk Management and Governance: With growing reliance on AI, logistics companies need robust internal governance structures to manage AI-related risks. The forthcoming guidelines should provide a framework for establishing these structures, helping companies mitigate risks such as data biases or algorithmic errors that could lead to costly disruptions or legal challenges.

Intellectual Property and Copyright: The logistics sector often leverages proprietary data for competitive advantage. The AI Act's emphasis on transparency and copyright could influence how logistics companies protect and share their AI-driven innovations, affecting intellectual property strategies and collaborations with AI providers.

Given the potential impact of this initiative on the logistics sector, CLECAT encourages its members to closely monitor and engage with this process. Raoul Wintjes, Head of International Road Freight Transport and Digitalisation at the German Freight Forwarding and Logistics Association (DSLV), recently appealed to the freight forwarding industry to embrace new AI technologies. He highlighted that AI offers numerous benefits, including efficiency improvements, quality enhancements, and the potential for process innovations or new business models. Beyond process optimisation, AI can save time and costs, make processes safer, and conserve resources-an important consideration in times of climate change and labour shortages. Highly automated and flexible logistics can reduce the burden on both the environment and human resources.

In line with DSLV, CLECAT advocates for a balanced approach where AI is used to augment human skills, assist in decision-making, and automate processes, all while carefully considering cost-benefit analysis and strategic objectives. Starting with small pilot projects and gradually scaling up, logistics companies can effectively integrate AI and prepare for future advancements like autonomous vehicles and hybrid freight forwarding. Given the increasing importance of AI, appointing an AI officer within the company who can oversee the implementation of an AI code of conduct can also be a wise step. Additionally, the emergence of AI as a Service (AIaaS) applications offers a cost-effective way to start using AI technology without the need for large initial investments. This is particularly beneficial for SMEs, enabling them to stay competitive in a rapidly evolving market.

The EC's consultation is open until 18 September 2024.

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