The explosion of e-commerce activity set off by the COVID-19 pandemic is presenting merchants with the challenge of handling orders efficiently while meeting customer demands for speed, says Archita Prasad, vice president strategy with UPS Capital.

The growth of e-commerce volumes means more opportunities for things to go wrong, in the form of packages that are lost, delayed, stolen or damaged, Prasad says.

Dealing with those mishaps can be expensive. A recent UPS Capital survey found that 43% of merchants had exceeded their shipping budgets. At the same time, they were dealing with a sharp rise in customer complaints due to shipping delays.

Additional challenges for merchants today include unpredictable spikes in demand, the need to raise their game in inventory management, and a lack of real-time visibility of orders in transit. “All impact their bottom line and the customer experience,” Prasad says.

Many solutions to these problems have been manual and time-consuming in nature. What merchants need is modern technology that can help them to predict changes in demand. Chief among current options are artificial intelligence and machine learning as tools for performing advanced analytics. “More and more merchants are turning to them to deal with shipping problems,” Prasad says.

AI can help them to better forecast demand, identify the best delivery routes, and provide real-time visibility of shipments that are underway. “It’s giving them preventive measures to safeguard shipments,” Prasad says.

Possibly the most valuable contribution of today’s AI models is the ability to personalize service. “During the pandemic, we all got spoiled,” Prasad says. “Consumers were looking for tailored services.” And today, their demands are even more intense. Not only do they want to know where their orders are; they want to be able to make last-minute changes in delivery location, should they find themselves unable to receive packages at the previously designated spot. Such capability on the part of merchants and delivery services is “becoming table stakes,” Prasad says. “Consumers expect it.”