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Top 10 Logistics Documents to automate with Intelligent Document Processing

One of the greatest industries in the world, logistics includes a variety of industries such as warehousing, storage, and transportation via road, rail, air, and water. The term “logistics,” which derives from “logistique,” the provision of weapons to soldiers, dates back to the eighteenth century. Today, it refers to the extensive enterprise of planning, implementing, and controlling the transit of commodities across B2B, B2C, and C2C supply chain networks. The IMARC Group predicts that by 2027, the global logistics business would be worth US$6.55 trillion.

Massive volumes of data are generated by numerous processes in the transportation and logistics sector, including rate management, customs declarations, invoicing, shipping, client management, vendor management, routing, and transport management. Logistics heavily relies on “big data,” which is dispersed over a variety of structured, semi-structured, and unstructured document types, including commercial invoices, airway bills, letters of instruction, proforma invoices, and many others. In ledgers, files, folders, and databases, logistics organisations frequently process and store data that may include printed documents, emails, texts, spreadsheets, word documents, PDFs, and/or scanned photos.

Blue collar workers are crucial to the logistics sector’s ability to manage the huge amounts of unstructured data that are stored there. Unfortunately, manual data administration takes a lot of time and is prone to mistakes. According to research, simple spreadsheet data entry errors made by humans range from 18 to 40 percent. Businesses ultimately lose time and money due to these mistakes. According to the 1-10-100 data entry rule, it costs:

  • $1 to verify each data point as it is being entered into a system
  • $10 to fix each erroneous data point after it is entered into a system
  • $100 if an erroneous data is entered into a system and never corrected

What is Intelligent Document Processing (and how can it benefit logistics)?

As a practical, precise, and quick method of conducting logical and semantic analysis of documents, intelligent document processing (IDP) is a useful tool in the logistics industry. IDP excels in sifting through a variety of papers related to the movement of goods from one location to another and extracting information that is relevant. Modern IDP solutions can precisely extract and process data like names, dates, addresses, and amounts from structured, semi-structured, and unstructured documents.

Human involvement in document processing is minimised by AI-powered IDP systems, which only use human input to address edge circumstances and guarantee quality. AI models are continually improved in accuracy and automation rates by human workers who train them. This method enables AI projects to maintain or surpass user-defined quality, cost, and speed thresholds. IDP virtually removes the unending, repetitive data entering and extraction chores that humans are inherently unsuited for.

Top 10 Logistics Documents to Automate with IDP

1. Bill of Landing (BOL)

Human involvement in document processing is minimised by AI-powered IDP systems, which only use human input to address edge circumstances and guarantee quality. AI models are continually improved in accuracy and automation rates by human workers who train them. This method enables AI projects to maintain or surpass user-defined quality, cost, and speed thresholds. IDP virtually removes the unending, repetitive data entering and extraction chores that humans are inherently unsuited for.

Because it provides crucial details on the security and legality of the product being delivered, as well as the reliability of the supplier, shipper, and consignee, the BoL is especially significant in the context of export. Additionally, it provides details on freight fees and customs duties paid to port and freight authorities. The most significant benefit is that it demonstrates ownership of the shipping item during its entire journey to the final destination.

Each day, bill of lading paperwork are processed by commodity merchants, food producers, shippers, and logistics companies in the hundreds or thousands. Almost all BoLs contain the following information, although each carrier has its unique BoL document format:

  • Shipment reference ID or number
  • Vendor/consigner’s details including name, address and contact information
  • Carrier details such as name, address, and the intermediate shipment number
  • Receiver/consignee details including name, address and contact information
  • Details of the product being shipped including number/weight/dimensions of items, freight class, as well as shipping and handling instructions
  • Declared value of the shipment, such as insurance details and compensation claims in the event of a failed delivery
  • Pricing and payment information
  • Delivery schedule details
  • Dated signatures of all stakeholders of the shipping process

Manual extraction and management of BoL data may be manageable for small carriers that deal with fewer suppliers and purchasers, but as a carrier expands its portfolio, some kind of automated data management system becomes essential to keep up.

2. Proofs of Delivery

20 billion parcels were transported in the US in 2020, according to surveys. A paper trail of documentation is created for each shipment, with the proof of delivery being one of the most important ones. It is closely related to income generating and indicates that the client has received the product, enhancing the supplier’s trust. Deliveries with proof of delivery slips enable suppliers to more efficiently monitor delays and organise upcoming deliveries. Without delivery proofs, invoices cannot be raised.

The recipient’s signature is required on the majority of proof of delivery documents, which are printed on paper. Proof of delivery paperwork have just begun to move online. This makes sense because paper is an ineffective medium for any type of formal communication because it is easily lost or damaged, which causes invoicing delays. This might also make it easier for dishonest individuals to commit fraud by stating they didn’t receive a package that had already been delivered, resulting in extra deliveries or giving consumers unneeded credit and costing suppliers money.

Customers are frequently asked to sign digital delivery slips on handheld devices with a digital pen or their finger; this signature is then recorded in a database. Along with the recipient and supplier names and addresses, proof of delivery also includes a description of the products being delivered. It requires a large amount of manual labour to enter all of this data into the main logistical data warehouse. Errors can still happen if human workers are required to perform manual data entry at some point in the workflow, regardless of whether the logistical documents are in digital or paper format.

The automatic capture of document data in a machine-readable format is the first step in automating the proof of delivery process. The time lags and financial penalties caused by manual or antiquated OCR-based data extraction systems can be avoided with the aid of Intelligent Document Processing (IDP) solutions.

IDP of proof of delivery documents usually provide the following features:

  • Extraction of structured, semi structured and unstructured data from any proof of delivery document.
  • Conversion of the extracted data into formats that can be digitally manipulated for subsequent use such as analysis, accounting, review, or storage.
  • Provision of data security, including features that prevent theft, hacking, and mismanagement of sensitive information

3. Freight Invoices

Freight forwarders are one example of the intermediary parties that are frequently involved in product shipping from the source to the destination. A crucial component in the supply chain, freight forwarding entails a number of tasks such transportation and warehousing, packing and paperwork, insurance, and value-added services. Between the source and the destination, freight forwarders serve as the point of contact. According to projections, the size of the global freight forwarding market would reach $220.34 billion in 2026.

The freight invoice or freight bill is likely the most significant document that the freight forwarder works with because it not only acts as a register of the shipment’s information, including its source, receiver, and goods, but also contains the payment information. The shipper and the carrier both sign it once the freight forwarder draughts it. Depending on the conditions of the contract, the accounting team bases its billing of the shipper or the recipient on freight invoices.

Freight invoice administration is laborious since many times a single cargo will have many invoices that need to be delivered to different supply chain partners and all of them need to be maintained in the larger repository. Freight invoice administration may be prone to mistakes and delays due to the enormous amount of data contained in these bills. Freight invoice automation can streamline much of the management process and reduce expensive mistakes.

IDP systems can extract pertinent data from a range of invoice types. These systems have the capacity to “learn” to identify crucial information in new invoice forms, preserving high levels of accuracy and fidelity.

4. Shipping Labels

As a shipment travels from its source to its destination, shipping labels, which serve as ID tags, are attached to it. The formats of shipping labels vary depending on the supplier or the freight forwarder, but they must still include important information like the recipient’s name and address, the supplier’s and freight forwarder’s names and addresses, contact phone numbers, a description of the item inside the package, its number and/or weight, the shipping class, etc. Barcodes and electronic tracking numbers are now included on shipment labels.

Every link in the supply chain benefits from the data extraction from shipping labels. The label is typically printed by the supplier or the freight provider, most likely from an existing database of customer information. Other than for quality control purposes, it may not be necessary to retrieve data from the label again. In order for the shipment to be easily traced by all chain participants, the other interim and final recipients must scan the shipping labels and extract all the necessary information to be recorded in a repository. The package’s position must be updated at each stage in order for the recipient to follow the product as it travels from the source to the destination using an electronics tag that is typically provided. Thus, in order to update its position and current status, all intermediate stops must extract the information from the packing labels.

As was already noted, there are numerous formats for shipping labels. On the package, the source and destination addresses could be in different places. The barcode may be located anywhere in the packaging and may encode several types of data. Additionally, the label may get dirty, damaged, or soiled throughout the journey because the shipment must travel across geographic distances.

Because the package is too big to be passed through the scanner that these legacy OCR systems employ and because even zonal OCRs can be confused by the label’s numerous spots where different information is printed, legacy OCR systems are all but useless in such circumstances. The human brain and eye are susceptible to error, particularly when the number of goods to be delivered rises.

The only options are IDPs, which can effectively extract different fields and precisely categorise them for data storage as well as data analysis and processing. The AI and ML engines in IDCs go beyond simple identification to interpret data using statistical techniques, neural networks, decision trees, and rule learning techniques. For instance, document layout techniques based on computer vision that are used in IDCs may distinguish between relevant and irrelevant fields and recognise the content regardless of where it is located on the label. Named Entry Recognition (NEM) algorithms are trained to recognise particular categories of information, such as reference numbers, names, locations, costs, etc., and efficiently and accurately transmit them to the subsequent task in the work process.

5. Freight Forwarder/Cargo Insurance Forms & Certificates

The data-rich industry of insurance relies heavily on big data analytics. There are many different insurance policies geared for the logistics industry because there are so many different products that are shipped by land, sea, and air. Cargo insurance, freight forwarder liability insurance, marine services liability, hull and machinery, protection and indemnity, energy logistics, dangerous goods and fuel logistics insurance, commercial vehicle insurance, general liability, and so forth are a few of the common insurance types used in the logistics industry.

The logistics insurance industry handles a lot of paperwork. There are forms for annuity accounts, disability claims, beneficiary designations, and more. There are forms to complete and process regardless of the type of insurance. Large swaths of information that are contained in both structured and unstructured documents are used to run a variety of insurance parameters, including premiums, risk selection, underwriting, etc.

Insurance processing requires correlation of data from multiple sources, which is a cumbersome process because it involves extracting, processing and analyzing data from disparate documents. There is need for human-like cognition to sort through all the details in different documents. With the advent of AI tools that come close to human-like cognition (even sentience some may say), there is now a vast scope for their use in the insurance sector. Many insurance companies are already looking to fully automate their operations; 46% of insurance claims activities are expected to be automated in the US by 2030, and much of this automation will be AI powered and will include an IDP component.

6. Customs Declaration Forms

A customs declaration form provides details of goods that are being imported or exported. It consists of information such as country of origin, description of goods, cost, insurance and freight (CIF) details, customs classification number, duties, etc. Manual processing of customs declaration forms requires data from various documents such as invoices, waybills, certificates of origin, packing lists, etc. As with the earlier cases, such manual activities can be tedious and time consuming. IDP solutions can automate the processing of customs declaration forms by extracting relevant data, intelligently categorizing them, and processing them as required.

No matter where in the document the essential fields are situated, the IDP engine automatically recognises and captures them when import or export declaration forms are submitted. Such information is categorised, saved in the proper index tables, and is then available for review or further processing.

7. Packing Lists

In international trade, a packing list, also called a delivery docket, is used to convey information about the exporter, the freight forwarder, and the recipient as well as specifics about the item being transported and its packaging, including its dimensions and weights. Because it serves as a record of the item being exported and serves as evidence for both the domestic and international bills of lading, an export packing list is crucial. Data on material safety are provided. A packing list can be used to support a letter of credit’s claim for repayment. Despite the fact that packing lists’ formats vary from business to business, they invariably include the following crucial details:

  • Date
  • Exporter contact information
  • Consignee contact information
  • Origin address of the product
  • Destination address of the product
  • Total number of packages per shipment
  • A detailed description of each package
  • The volume and weight of each package
  • The volume and weight of the entire shipment
  • Invoice number for the shipment

Since the packing slip is typically kept by the buyer, data extraction from packing slips is crucial for sellers because it acts as an archive of the shipment information. The seller’s inventory management and auditing processes can benefit from the information on the packing slip.

Packing slip data can be intelligently gathered using IDP solutions. Data extraction from packing slips of all forms is made possible by these systems’ continual learning features for comprehensive document and data management.

8. Dangerous Goods Declarations

Road, rail, air, and sea transportation are frequently used to transport hazardous commodities such as combustible items, corrosive chemicals, health risks, etc. over long distances. These shipments need to be accompanied by a document called the Dangerous Goods Declaration (DGD). The DGD attests that the packaging and labelling of the consignment complies with both destination and source country laws. For example, the IATA’s Dangerous Goods Regulations (DGR) set strict guidelines for shipping hazardous materials via air. The DGD helps the carrier comprehend the shipment’s nature and the safety measures that must be taken when handling it.

The DGD usually contains the following information

  • Address and contact information of the shipper and receiver
  • Emergency contact details
  • The correct name of the shipped item
  • Quantity
  • UN number
  • Weight
  • Packing group
  • Radioactivity
  • Handling information

Additionally, dangerous products declaration forms differ by nation and are frequently difficult to understand. It is possible to automatically extract information from DGDs, regardless of formatting and content arrangement, with the use of AI-enabled document management systems. Human employees are relieved of the tedious chore of data extraction as a result. The computerised processing of dangerous goods declaration forms utilising UDP can eliminate more than 90% of manual data entry.

9. Purchase Orders

A purchase order, often known as a PO, is a binding legal document that certifies a buyer’s purchase of goods or services from a seller or supplier. In order to facilitate the transfer of the items from the seller to the buyer and the payment for those goods, the buyer generates the PO.

In the Logistics sector that deals with products and not services, a purchase order contains the following information

  • A purchase number or ID for tracking
  • The details of the product being bought
  • The quantity of the product being bought in terms of numbers or weight.
  • Contact information of the buyer and the seller
  • Date of the order
  • Timelines and details
  • The price at which goods are purchased
  • Payment terms and conditions

In order to complete the transaction and start payments, the invoice is matched to a PO and delivery receipts as part of a three-way matching procedure. Therefore, it is necessary to carefully record and maintain all PO data. IDP systems can manage document workflows, intelligently extract data from existing papers, and speed up the completion of the full procurement process. To hasten the approval procedure, they can also perform three-way matches.

10. Air Cargo Manifest

A cargo manifest is a list of all the cargo that is present on board any type of cargo vessel, including trucks, planes, trains, and ships. The list of cargo that is transported by an aircraft, or “air cargo manifest,” will be marked with the carrier aircraft’s identifying number.

Products from many vendors and intended for various customers could be included in the cargo. As a result, the air cargo manifest would include the air waybill and master air waybill numbers pertaining to the items, together with all the bills of lading linked with the commodities being transported in that specific aircraft. The air cargo manifest also includes information about the product being transported, the weight and quantity of the products in each consignment, and the unit of loading.

In 2021, the cargo aviation sector earned 175 billion US dollars in sales globally, according to Statistics. The volume of Air Merchandise Manifest is mind-boggling given the significant amount of cargo being delivered by air. It is no longer viable or even possible to manually extract data from air cargo manifests using legacy OCR technology. The only way the Air Cargo Manifests can be managed globally is through AI-enabled automated document processing.

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