AI-Driven Logistics and Tariff Challenges in the U.S. Hardwood Industry

The U.S. hardwood industry is bracing itself against turbulent waves of uncertainty as recent tariff implementations threaten to disrupt trade and supply chains. Reflecting on past challenges, Executive Director Dallin Brooks noted, “During the 2017 trade dispute, [the hardwood] industry experienced significant challenges, including a 20-25% export decline. Several companies were forced to shut down, and many others struggled to recover.” Although my initial interview with Stephen Zambo, CEO and Founder of Ally Global Logistics (AGL Group), focused on AI’s role in global logistics, the recent tariff implementations prompted NHLA to explore whether AI-driven logistics might help mitigate some of these impacts.

In recent years, the logistics industry has shifted its focus from fraud prevention and visibility to integrating Artificial Intelligence (AI). Zambo explained, “We view AI, as an organization, as a tool to leverage, not to replace people, but to reduce a lot of the redundant manual work that takes place in the international logistics space.” AI-powered Transportation Management Systems (TMS) are increasingly being used to improve operational efficiency, particularly in automating document processing and tracking updates.

One area where AI is showing promise is in streamlining booking confirmation updates. Zambo described a common challenge, “For every booking confirmation a client requests, we might have eight updates on the back end from the steamship line. We’ve built out a tool where AI extracts the data and automatically updates and sends it to the client. That saves my team like 800 hours or something a month.”

“We view AI, as an organization, as a tool to leverage, not to replace people, but to reduce a lot of the redundant manual work that takes place in the international logistics space.”

Beyond operational efficiency, AI also offers potential solutions to tariff-related inefficiencies by reducing logistical bottlenecks and costs. Zambo noted, “When we do a shipping instruction for a client, we need several key documents—commercial invoice, tallies, packing list, and shipping instructions. Right now, that back-and-forth can take five or six emails. With AI, that could be handled where that information is being checked and processed just by AI.” AI-driven optimizations have the potential to minimize tariff delays and costs, though many companies still rely on traditional systems that have served them well.

While AI-driven logistics offer efficiency gains, adoption remains uneven. Smaller businesses may struggle with implementation costs, and some logistics providers face challenges in integrating AI with existing infrastructure. “User adoption has always been one of the biggest challenges,” Zambo acknowledged. “We’ll introduce new software and change the process from steps 1-2-3 to 1-3-4, and sometimes getting everyone on board takes time.” He also pointed out the fragmented nature of the logistics industry, with many steamship lines owned by different countries, which can complicate integration efforts.

Despite these hurdles, AI-driven logistics offer a beginning to address some inefficiencies in the supply chain. In particular, AI-based routing is helping reduce empty truck hauls, contributing to more sustainable logistics. Zambo observed, “We’ve seen companies try to match up an import move with an export move. And so that eliminates the amount of downtime in a truck so that a truck will be loaded from eighty to ninety percent of the time versus only fifty percent of the time.”

Looking ahead, companies are exploring AI advancements in predictive weather modeling to optimize shipment logistics. Zambo shared, “I just met with a company using a predictive weather model for import shippers. If a typhoon’s coming in, they might route it a different way or look to source from a different place based on that.”

In the context of current tariffs, AI-driven logistics can promote efficient, tech-enabled trade. The hardwood industry continues to navigate evolving logistical challenges, with AI emerging as one of many tools that could help companies adapt to future trade shifts. While AI adoption is still in its early stages, its long-term potential for the hardwood industry is immense. Zambo concluded, “I think we’re in like, you know, if you equate this to a football game, I think we’re in the second drive, you know, we’re not even out of the first quarter right now.”

Note: This article was drafted on February 11, 2025, and reflects the tariff situation as of that date.

By BRENNAH HUTCHISON,
Content Strategist & Editor