What happened: New AI technology being tested at some Amazon warehouses can scan products for damages before they're shipped out to customers, potentially speeding up picking and packing processes and cutting back on the number of returns. Why it matters: Currently, Amazon warehouse workers have to manually inspect items for damages, but it can be mentally taxing and time-consuming. Customers also list damaged goods as one of the top reasons for returning online products. What the numbers say: Amazon says the AI screening system, now operational at two warehouses, shows three times higher effectiveness at identifying damage compared to human workers. While fewer than 0.1% of items are typically damaged, Amazon ships around 8 billion packages a year, adding up to a significant amount for the retailer. The big picture: The move aligns with the broader trend of integrating AI and automation into logistics to speed up and improve complex supply chains. Amazon has led the way by incorporating optimization algorithms and AI-powered robotics systems at its fulfillment centers. According to Statista-provided data, the global warehouse automation market is projected to exceed $30B by 2026, doubling its value from $15B in 2019.
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