How are leaders in the Middle East using AI to solve for supply chain issues

Attributed by Harsh Kumar, Chief Strategy Officer, Shipsy

The Middle East’s logistics sector is undergoing a fundamental change as industry leaders embrace AI to tackle region-specific challenges and build the foundation for autonomous supply chain operations. “In the wake of the fourth industrial revolution, governments and businesses across the Middle East are beginning to realise the shift globally towards AI and advanced technologies. We estimate that the Middle East is expected to accrue 2% of the total global benefits of AI in 2030. This is equivalent to US$320 billion,” highlights a PwC Middle East report.

When it comes to making supply chains autonomous, logistics leaders in the Middle East agree that there are some inherent challenges in the region that hinder growth and that they are working towards addressing the same.

Addressing the Middle East’s Obstacles to Autonomous Supply Chains

Inaccurate addresses remain one of the most critical pain points for Middle Eastern logistics operations, directly impacting productivity, costs, and customer experience. The region’s diverse linguistic landscape and inconsistent address systems have made last-mile delivery particularly challenging.

In the Middle East, inefficient address structure often results in packages and letters being addressed only with a recipient’s name, city, and country, lacking a specific delivery address. Courier services are typically provided with just a name and mobile number, requiring them to investigate and determine the intended delivery location. According to a report by Logistics Middle East, incorrect addresses can potentially impact more than $7.42 billion in eCommerce revenue in the Middle East.

“AI’s success and differentiation from any other technology before it, will depend on its ability to solve region-specific challenges. Unlike banking and financial services sectors, logistics and supply chain operations often deal with fragmented processes and disconnected systems. AI is uniquely positioned to bridge these gaps by harmonizing data, streamlining workflows and enhancing efficiency across the entire value chain all of which have a direct impact on operational productivity.” said Iyad Kamal, ex COO of Aramex.

Incorrect addresses also create another challenge of driver productivity and retention. With retail customer expectations rising and delivery times shortening, logistics providers will need to focus on making it easier for drivers to complete their work, get the right information at the right time to ensure they deliver a better customer experience.

The challenge compounds due to a flawed hypothesis in route optimization which does not take into consideration real-world variables when allocating deliveries creating delays and impacting driver productivity.  Another critical problem that needs to be addressed is financial settlements. Validating data for settlements remains a heavily manual and time-intensive process. It will not be incorrect to say that only about 10% of invoices are accurately validated, as the human effort required is significant. This results in a higher risk of inaccuracies in settlement. AI agents can help here by analyzing delivery proofs against trip data and automatically calculate delay fees using GPS timestamps and contractual rates.

How leaders are moving from Guesswork to Data-Driven Precision

Resource allocation has traditionally relied on intuition, resulting in suboptimal vehicle utilization and excessive mileage. Digital Twin technology is changing this paradigm by enabling logistics providers to run scenario analyses and predict the impact of different allocation strategies before implementation.

Real-time incident management has also evolved beyond manual dashboard monitoring. Autonomous monitoring agents now continuously check operations against KPIs, detecting anomalies like delays or harsh braking incidents. When issues arise, these agents assess impact, proactively communicate updated ETAs to customers, and suggest rescheduling options, thereby drastically reducing resolution times.

Aujan Coca-Cola Beverages Company is leveraging Agentic Incident Management, AI-powered dynamic route optimisation and load balancing and Agentic Control Tower to enhance customer experience by ensuring ETA adherence and real-time visibility.

Fair compensation and equitable workload distribution emerged as critical for combating driver attrition, with leaders emphasizing that rewards must be immediate rather than deferred to maintain motivation. Customer-centric execution requires moving beyond basic data matching. AI-enabled semantic matching creates comprehensive customer profiles that preserve delivery preferences across different drivers and addresses, ensuring consistent service quality.

“Verifying every transaction and validating every invoice, continue to be a massive overhead for supply chain leaders even in 2025. Companies that can leverage AI to automate highly human-intensive processes will unlock velocity as an advantage, making it harder for their competition to catch up.” said Soham Chokshi, Co-Founder and CEO of Shipsy, while emphasizing AI’s role in logistics.

The Road Ahead

Logistics leaders in the Middle East envision autonomous, intelligent, and customer-centric supply chains powered by agentic AI that independently solves complex problems. However, the success of these systems hinges on a human-in-the-loop approach. Balancing algorithmic optimization with human expertise, such as local knowledge and driver preferences, is essential to address the region’s unique challenges, like inefficient address systems. By integrating continuous monitoring and predictive intervention, AI can shift operations from reactive to proactive, but human oversight ensures adaptability and accuracy. This synergy between AI capabilities and human insight drives resilient, efficient, and customer-focused logistics networks.

As the region’s logistics sector continues its digital transformation, these AI-driven foundations are positioning Middle Eastern supply chains at the forefront of global innovation in autonomous operations.