Intelligent document processing (IDP) in logistics and transportation

Documentation forms an integral part of operations in almost every industry. Take logistics and transportation, for example, where companies process hundreds of thousands of documents daily to keep the goods in motion and the supply chain functional. So, what are logistics companies doing to handle such a vast number of documents? More importantly, how can they use the intelligent document processing (IDP) technology to manage their documents and extract the data they need? 

This blog is all about intelligent document processing in logistics and the role of IDP in automating document management in the industry. 

The current state of automation in logistics document processing  

If you’re reading this article, chances are high that you’re from the logistics industry, which means you are aware of all the different types of documents that are produced and processed. 

From commercial invoices, sea and air waybills, bills of lading, purchase orders, and packing lists to arrival notices, shipping labels, receipts, customs declarations, proofs of delivery, and many more, every document carries essential information that helps track shipments, confirm transaction details, and fulfill compliance requirements. Ensuring the goods move smoothly requires that the relevant parties get hold of these documents in a timely manner, which in turn is only possible if they are processed quickly and accurately. 

To respond to these needs, businesses have automated their document processing and management workflows. The use of optical character recognition (OCR) and rule-based techniques for repetitive tasks, such as data extraction and document sorting, is a fine example. Simple scripts and workflows are also used to route documents to the right departments or systems, ensuring they reach their intended destinations. 

It’s evident that these basic automation tools enable documentation teams to format documents and create standardized templates for similar types of documents. But let’s not forget that each document has its own format, data fields, and compliance requirements that must be accounted for, especially when dealing with multiple business partners. And that brings us to the document processing challenges in the logistics sector. 

Logistics document processing still faces many challenges 

The shift from paper-based processes to digital documentation has automated many repetitive tasks in the logistics and transportation industry. What still remains a challenge, however, is the ever-increasing volume of documents coupled with their changing formats and the significant amount of time and human resources required to process and extract requisite information efficiently from important documents. 

Manual processing 

Despite recent advancements, many logistics companies still rely on manual document processing methods where staff members are responsible for entering data from physical or digital documents into their internal systems. Evidently, this approach is time-consuming and prone to errors, such as mistyping a shipment quantity or incorrectly entering a customs code. Such errors are the drivers of costly downstream effects, leading to delays and lost opportunities. 

Volume of documents 

For even a mid-sized logistics company, processing hundreds or thousands of documents regularly is common. Each document contains critical data points that must be captured, validated, and shared with relevant stakeholders, which means the only way forward is to process them efficiently. Without AI-powered automation, logistics companies face processing delays and risk missed deliveries, leading to client dissatisfaction. 

Integration with existing systems 

A typical supply chain organization deals with multiple business partners, which means it’s bound to handle all kinds of documents. And to do so effectively, it needs systems that can communicate seamlessly. In some cases, for example when onboarding a new partner, organizations must build new integrations in order to manage certain documents, especially if they’re unstructured and vary greatly in format. This becomes a challenge as more partners with different needs come in. 

Audit and traceability 

What is a supply chain if we take visibility out of it? That’s right, a series of disjointed processes that lack coordination and efficiency. Documents are key to gaining visibility into the movement of goods along the supply chain, making it all the more important to be able to track and trace them. Multiple stakeholders, diverse document types, and manual processes all but complicate document tracking. 

IDP enhances logistics document management automation 

Given the existing challenges, logistics and supply chain services providers are increasingly embracing artificial intelligence (AI) driven automation solutions that further accelerate document management and data extraction. 

Here’s how an AI document processing solution enables businesses to manage documents with minimal manual intervention: 

Logistics and shipping documents classification 

As a shipping document is received, IDP software reads the text and layout to identify whether it’s an invoice or any other type of document. 

Data extraction from the document 

Unlike traditional OCR, IDP solutions are capable of extracting text along with key data points such as shipment IDs, product quantities, dates, and invoice amounts. What really makes AI data extraction worth it for logistics companies is its capability of extracting data from semi-structured and unstructured documents, like a packing list or EDI files. 

Data validation for overall quality 

The extracted data is checked for whether it conforms to set business rules. Predefined rules enable you to ensure that your data is formatted as needed and keep unwanted data points from entering your systems. Examples of data validation rules could be verifying that the shipment ID matches the ID in the company’s database or ensuring that invoice amounts align with recorded transactions. 

Handling unstructured documents 

Logistics often involves unstructured documents, such as handwritten delivery receipts or emails with embedded shipping instructions. Traditional automation struggles with these formats, but IDP uses machine learning to adapt and learn from each document it processes. 

The use of natural language processing (NLP) capabilities means systems can comprehend the document contextually. So, even if a supplier changes the format of their packing list, a reliable IDP system will still identify relevant data points without requiring manual intervention. 

Seamless integration and interoperability 

IDP platforms offer the ability to transport data to its intended recipient. Team members can easily access this data from relevant internal systems, such as ERP software or a central data warehouse, and make decisions. 

Since AI does all this on its own, you’ll have to check for any errors the first few times. How many times you’ll need to do it depends on the accuracy of the solution used, as tools have varying levels of accuracy with document data extraction. 

Logistics documents that IDP can automate 

So, what are the different types of documents used in the logistics sector that you can process and extract information from automatically? While the list of documents can be extensive, the following are the most commonly used documents in logistics and transportation that you should consider using IDP software for: 

Purchase orders (PO) 

The document serves as a formal request for the supply of goods. Purchase order processing involves extracting information such as order numbers, item descriptions, quantities, agreed prices, and delivery terms. 

Waybills 

Airline and sea freight carriers issue waybills as proof that they have received goods to ship. These documents include important details about the destination, consignee, route, waybill number, cargo description, and carrier information. 

Delivery orders 

Carriers issue delivery orders that allow the release of goods to the consignee, or any other nominated party authorized by the consignee. Key information to extract generally includes delivery order numbers, consignee details, item details, and delivery instructions. 

Freight bills 

A freight bill contains information on freight charges due for the transport of goods, typically between the shipper and the carrier. Freight charges, shipping terms, consignee and shipper details, shipment details (weight, volume), and payment terms are normally extracted from freight bills. 

Bill of lading (BOL) 

A bill of lading is a legal document, normally used in the context of sea freight, a carrier issues to the shipper to acknowledge the receipt of cargo. Among other information, bills of lading detail shipper and consignee names, shipping instructions, item descriptions, quantities, weight, and shipment terms. 

Invoices 

Invoices detail the charges for goods or services provided and are a key document for financial and accounting operations in logistics. Invoice numbers, dates, line-item details (product description, quantities, unit prices), total amount, payment terms, tax details, and due dates are generally extracted from invoices. 

Packing lists 

Often sent along with invoices, packing lists outline the contents of a shipment, including descriptions of items, quantities, and packing methods. Product names, quantities, dimensions, and weights of individual items in a shipment, as well as packing methods used (boxes, pallets, etc.) are detailed in a packing list. 

Shipment tracking forms 

Logistics companies extract tracking numbers, shipment status, location, and expected time of delivery from a shipment tracking form. These data points enable them to track the status of a shipment as it moves through different stages of the supply chain. 

Customs declarations 

Also called goods declaration, a customs declaration contains information that describes the goods being imported or exported, their value, and their destination. Data fields like customs code, tariff classifications, goods descriptions, HS codes (Harmonized System codes), shipment value, and origin constitute key information that’s extracted from these documents. 

Delivery receipts/proof of delivery (POD) 

A delivery receipt, or proof of delivery, is an acknowledgment that goods have been delivered to and received by the intended recipient. Typically, delivery date, recipient details, items delivered, and signatures (if applicable) are key data points extracted from a delivery receipt. 

The benefits of intelligent document processing in logistics 

IDP offers several advantages that facilitate the move from traditional processes to efficient, digital document processing workflows. It addresses the specific operational challenges logistics companies face, helping them optimize their workflows and deliver better services to their customers. The main benefits include: 

• Elimination of errors associated with manual data entry means you can extract accurate data from documents like invoices and shipping notices 
• IDP requires minimal manual intervention, which translates into faster document processing and smoother logistics operations 
• Automation and error reduction lead to cost savings 
• Optimized freight invoicing and billing shortens the invoicing cycle 
• Fast and accurate data extraction from packing lists and inventory reports result in efficient stock management 

Intelligent document processing solutions make the transition easy 

Anytime you decide to incorporate a novel technology into your processes, you do a careful analysis of your current state and how the added technology will help you reach the desired state. The same rules apply when implementing IDP to fast-track document processing and management in the logistics sector. 

Fortunately, the exercise won’t be as intense because IDP software does most of the heavy lifting by integrating with existing transportation management systems (TMS), ERP platforms, and other document management tools and workflows. However, this does not exempt you from the prerequisites—careful planning and formulating implementation strategies. Once you account for the essentials, you don’t have to embark on a complete overhaul of your existing systems to leverage AI for document processing. 

In short, IDP tools starts delivering value immediately. The smooth transition allows for faster automation of critical tasks such as data extraction and document classification without a steep learning curve. And this is why it’s critical to select a reliable IDP tool. 

How Astera helps logistics and transportation companies with IDP 

Astera offers a modern intelligent document processing solution, powered by Astera Intelligence, that’s not only easy to deploy but also easy to use, even for business users. It enables you to extract data from unstructured documents quickly and accurately without any manual intervention. 

With Astera you can: 

• Extract specific data from invoices, purchase orders, and other shipping documents simply by specifying the relevant fields 
• Search for and extract key information from logistics and shipping documents contextually using AI 
• Integrate seamlessly with your existing data stack and systems to streamline document processing and management 
• Ensure data quality and accuracy with built-in features to validate data 
• Handle EDI and delimited files with both rule-based and AI-driven mapping 
• Automate the entire document processing workflow from end-to-end 

And much more—all without writing a single line of code. 

Contact us today to learn more about how you can streamline document processing and management with Astera.