The use of artificial intelligence (AI) to sift through data and find areas for improved efficiency has already started to have an impact on the scheduling, safety, and monitoring of shipments from ports to railways.  Major players in the shipping market have been investing in AI capabilities and research for years, with Maersk recently opening an AI-driven automation center as a symbol of the type of disruption that can be expected in the market as the promises of technology begin to manifest.  But beyond these immediately tangible gains in efficiencies and minor disruptions that come from early applications of AI to global trade, what are the more substantive impacts that we can anticipate in the next decade?  How will trade in goods and services change?  What changes can we expect in the labor market and costs of doing business?

Trade in goods – what will stop shipping? 

Innovative ideas such as the 3D printing of clothing have moved from science fiction to science fact.  The use of 3D printing is a daily reality for designers, and the use of such technology is only picking up pace as companies respond to the criticism of how ‘fast fashion’ is unsustainable.  This is just one of the many items which may no longer be imported into the U.S. as AI and new technology create alternative production sites.  Soon it may be unnecessary to ship everything from phone cases to toys, since they can be manufactured at a continuously lower cost in local facilities or even consumers’ homes.  The use of AI will even improve yields from hydroponic and traditional farms, suggesting that many food products would no longer make sense to ship from distant locations. If AI and new technology can’t (yet) create unique products such as rare earths, new and developing tools will still have an impact on trade patterns, as they can help find untapped resources that are in friendlier locations.  With the U.S. government funding AI-based research to improve the country’s ability to produce key products such as energy storage devices, more and more of those products and the resources that go into them will be produced domestically. The bottom line is that the usage of AI and new technology over the next decade will not only bring dramatically improved logistics, it will shift what is moved from place to place as a substantial portion of goods are suddenly competitive even when produced domestically.

Trade in services – major impact from AI

From market research to IT and customer service support, AI applications are already replacing many low and medium-complexity outsourced service jobs around the globe. While there is still a strong business case for leveraging global talent pools outside of high-cost markets such as the U.S., the overall trade in services is going to likely dip as more of these service requirements are handled by AI in domestic markets.  Reinforcing this trend are increasing concerns over data privacy regimes and cyber security, which will incentivize business to keep valuable information and personnel and customer details fenced off in their domestic markets.  Generative AI is also likely to reduce royalties and license fees as customers find it easier to produce everything from wall art to new music through free applications.

How AI will impact jobs and costs

The ongoing automotive union strike and recent picketing by writers in Hollywood are both related to how AI usage and new technology are threatening traditional industry jobs.  Tensions have been simmering for decades as longshoremen and freight workers worry that automation may take over many of their tasks. These types of struggles will continue for years, but the adoption of this technology will be inevitable in the U.S. in order to stay competitive with early adopters of automation in Asia and Europe as well as low-cost labor in other parts of the world.  In the next ten years, there will need to be substantial public-private joint efforts (and investments) to cross-train workers into higher-complexity positions in recognition of this technological transformation.  

The loss of traditional jobs is clearly not limited to the logistics sector – as seen from concerns voiced from visual artists, finance experts and even attorneys that they are losing work to new generative AI tools.  The solutions to this shift in labor will also have to be broad-based, to include transforming educational systems to better prepare future employees for the working world that awaits them.  The World Economic Forum suggested that over a billion jobs will be impacted or displaced as a result of improved AI technology and that higher education needs to be changed accordingly.  However, many of the jobs that will be impacted do not require college degrees, so the real challenge is to prepare students from the elementary level for jobs that don’t yet even exist, and for an economy where many existing labor roles will be defunct.

When it comes to costs, AI’s most immediately attractive benefit is efficiency. In global trade, there will be substantially more automation of transportation and a reduction in the requirement for warehousing as forecasting models render the requirement to have supplies in backstock unnecessary.  Companies will be able to reduce staff and service costs using automation and generative AI.  However, not all costs will go down.  The expense for data centers and cyber security will potentially rise substantially as companies put more reliance on their technology tools to run business operations and sort through the universe of data necessary to improve forecasting capabilities.  Many of the savings in labor costs will likely need to be plowed into IT support and maintenance costs.  Nevertheless, AI usage offers tremendous savings in efficiencies and improved safety across all business sectors, which will drive broad-based adoption of new technology across all business sectors.

Buckle up for an interesting ride

The next decade will bring such widespread change that it can be hard to determine what path trade will wend among the geopolitical and technology changes that shape global business.  A few trends are clear, however: automation will increase, AI applications are going to proliferate into all business sectors, and only agile, informed companies will succeed in this volatile environment.  The cost of early adoption and implementation of some of the new technologies that are arising out of AI applications can be daunting, but keeping a sharp eye on developments in the market has never been more important.  Most U.S. businesses are already using AI in some form or another, and an overwhelming percentage of them intend to increase the usage of AI for everything from improving efficiency to handling customer complaints in the years to come.  When taken together with the impressive strides forward in automation, 3D printing, virtual reality tools and blockchain technology, it is crucial for companies to invest time and resources into forecasting and planning for substantial changes.  The advantage is that now they can leverage AI to do it faster and more efficiently.

Kirk Samson is a Senior Director of Business Process Management at the global consulting firm Nexdigm and a Director at the International Trade Association of Greater Chicago.