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“Flesh and Breath” – The Appeal of Delegating to AI and its Limits

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“flesh And Breath” – The Appeal Of Delegating To Ai And Its Limits

At the airport for an early flight, returning home after a speaking engagement, I was having a moment, feeling “tweepy” (my new word for tiredness that makes me weepy) as I stood in line to order breakfast. The trip had been a busy several days on top of a difficult year. The woman taking my order looked directly at me, smiled, and wished me a nice day. Her words were not remarkable but delivered with such utter sincerity, with light in her eyes, that they touched me just enough to lift my spirits. After eating I returned to the counter to thank her for making a difference. This may seem like an insignificant moment, but most of life is a series of small moments punctuated by a few big ones, some stupendous, others shattering. In a year heavy with crushing moments I’ve gained appreciation for the gifts of kindness, and this small exchange shone a light for me on why they matter, what I want to delegate to AI, and what remains uniquely human.

In my last commentary I argued that AI lacks what I call the 3C’s: context, collaboration and conscience. The challenges I’ve faced in the last year have reinforced the importance of two additional fundamentally human capabilities AI lacks: connection and compassion. As appetite for AI continues to grow at an astonishing pace, navigating the boundaries of what to delegate to AI and what to preserve for humans is essential.

The Appeal of Delegating to AI

AI is a tool designed by humans to do things it can do better or we cannot or do not want to do. Automation powered by AI takes over tedious grunt work involved in areas like supply chain procurement, with chatbots negotiating routine contracts with suppliers, saving money and freeing up time for professionals to handle more complex deals.

AI thrives on large volumes of data, so it can scale far beyond our cognitive capacity to crunch through reams of information quickly and synthesize the results. Googling now often places a generative AI result at the top of the page, a single answer from searching and summarizing the most relevant information. It can find and learn from patterns in big data sets to make predictions, such as when a machine is likely to fail in a factory, which external signals will most impact a demand forecast, or what actual lead times for parts will be.

AI has potential to reduce bias, since people can make inconsistent and subjective decisions based on personal opinions, so there is promise for its application in areas like hiring, lending, and medical diagnosis. But these same areas of AI promise also show risk. Since bias is primarily a problem of the underlying data reflecting existing human bias, efforts must be made to leverage AI’s strengths and mitigate its pitfalls. AI fairness is thorny, but I am hopeful that combining human and AI strengths for some of these decisions can make them more consistent and objective.

In addition to these applications of AI’s strengths, it doesn’t get tired (or weepy), irritable, bored or overwhelmed. On a different trip during another tweepy moment, exacerbated by a cascading series of flight cancellations and reroutings preventing me from getting home that night, I had to make a decision between a variety of unattractive flight and hotel options. I would have loved to simply delegate to AI finding me a room and getting me home.

The appeal of delegating to AI is borne out by data. The US National Bureau of Economic Research reported last month that Generative AI is already on track to outpace the speed of adoption of the internet and PCs. ARK Investment Management found that every four months the cost of operating AI models drops by half, beating the famous Moore’s Law on chip costs by a factor of 4-6 times. New research by Morgan Stanley finds that 50% of AI projects are delivering and 40% exceeding expected ROI. In short, delegating to AI is moving fast and making an impact.

Never Delegate Understanding – the Limits of AI

Charles and Ray Eames designed some of the most iconic furniture of the 20th century through a deep study of an object’s purpose, a process that led to their famous adage, “Never delegate understanding.” Their philosophy was grounded in foregoing assumptions about how things worked in favor of learning for themselves. We delegate understanding when we expect tools and technology to solve all our problems and surrender our own expertise. As researchers have found, we still don’t fully understand the boundaries of AI’s capabilities, a phenomenon they call the jagged technological frontier. Their experiments showed how blind trust in AI’s results was a delegation of understanding that actually led to a 19% dip in performance.

The problem is that as dazzling as generative AI can be, it doesn’t “understand,” it is a probabalistic sentence completion machine. It responds to queries based on AI models, not comprehension. Language has structure and rules, but human emotion is far less predictable. AI techniques like sentiment analysis can identify the emotions in language to provide insights for certain purposes like customer service or targeted marketing, but these methods don’t achieve true emotional intelligence, they only barely scratch the realm of human feelings, which defy rationality.

The Importance of “Flesh and Breath”

My father spent the last year and a half of his life in a skilled nursing facility, and while visiting him I was saddened to observe so many elder adults languishing alone, because research is clear that we are wired for connection. This exposure piqued my interest in so-called social or care robots that can mimic pet therapy, visit residents, facilitate social interactions, offer tailored suggestions for healthy behaviors like exercise, and more. While I in no way see these devices as substitutes for humans, I’m open to anything that might plug the dike of what former US Surgeon General has called “an epidemic of loneliness.”

And yet I understand the response of a friend who spent many years working with the elderly – she is adamant that stemming loneliness requires “flesh and breath,” not electronic devices. Her reaction points to the limits of AI – given enough data, it can analyze facial expressions and voices to detect emotions and even respond, but it doesn’t understand, because it doesn’t feel. And the ability to feel, in spite of the inevitable heartache, is what fuels connection and compassion.

The Power of Compassion and Connection

My circumstances over the last year forced me to discuss very personal details with strangers as well as colleagues. The kindness I’ve received in response has been astounding. People I hardly knew checked in to ask how I was doing. A colleague on maternity leave sent regular doses of baby photos. One man I know professionally but have never even met in person offered to host me at his house in New Hampshire so I could hike, knowing it is both a hobby and solace. My compassion cup has been overflowing.

When I opened to the door to my own experience, people walked in to share their own stories of heartbreaking challenges, some past, some present. I heard tales of fire, death of a parent, loss of work, sexual assault, mental illness, addiction, degenerative disease. People shared understanding of my pain and a common message that I will make it, no matter how hard it may seem now. They didn’t delegate understanding but created it by listening, greeting me with compassion, and walking alongside me in sharing their own stories, creating connection we can’t delegate to AI.

Call centers are heavily studied in part because of the abundance of data, and one area of research is how to improve customer service through analyzing emotions callers express in order to offer employees guidance in responding more effectively. I’m all for anything that can make these calls better, but the reason my small moment in the airport warmed my heart is because this woman’s customer service was exemplary, not based on a script but borne of authenticity and compassion, brimming over and creating connection. AI is impressive in its abilities to help manage crew schedules, design optimal flight paths, detect plane safety issues, predict parts needed for maintenance and reduce emissions from fuel, but in my tweepy airport moment I was grateful for compassion and connection delivered via flesh and breath.

A significant challenge with AI today is hyperinflated expectations that bring the risk of another AI winter – a phenomenon that has beset the field before, when disappointments in progress chill both interest and funding.

Polly Mitchell-Guthrie

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India–U.S. Trade Announcement Creates Strategic Options, Not Executable Change

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India–u.s. Trade Announcement Creates Strategic Options, Not Executable Change

The announcement by Donald Trump and Narendra Modi of an India–U.S. “trade deal” has drawn immediate attention from global markets. From a supply chain and logistics perspective, however, the more important observation is not the scale of the claims, but the lack of formal detail required for execution.

At this stage, what exists is a political statement rather than a completed trade agreement. For companies managing sourcing, manufacturing, transportation, and compliance across India–U.S. trade lanes, uncertainty remains the defining condition.

What Has Been Announced So Far

Based on public statements from the U.S. administration and reporting by CNBC and Al Jazeera, several points have been asserted:

U.S. tariffs on Indian goods would be reduced from an effective 50 percent to 18 percent

India would reduce tariffs and non tariff barriers on U.S. goods, potentially to zero

India would stop purchasing Russian oil and increase energy purchases from the United States

India would significantly increase purchases of U.S. goods across energy, agriculture, technology, and industrial sectors

Statements from the Indian government have been more limited. New Delhi confirmed that U.S. tariffs on Indian exports would be reduced to 18 percent, but it did not publicly confirm commitments related to Russian oil, agricultural market access, or large scale procurement from U.S. suppliers.

This divergence matters. In supply chain planning, commitments only become relevant when they are documented, scoped, and enforceable.

Why This Is Not Yet a Trade Agreement

From an operational standpoint, the announcement lacks several elements required to support planning and execution:

No published tariff schedules by HS code

No clarification on rules of origin

No definition of non tariff barrier reductions

No implementation timelines

No enforcement or dispute resolution mechanisms

Without these components, companies cannot reliably model landed cost, supplier risk, or network design changes.

By comparison, India’s recently announced trade agreement with the European Union includes detailed provisions covering market access, regulatory alignment, and investment protections. Those provisions are what allow supply chain leaders to translate trade policy into operational decisions. The U.S. announcement does not yet meet that threshold.

Implications for Supply Chains

Tariff Reduction Could Be Material if Formalized

An 18 percent tariff rate would improve India’s competitive position relative to regional peers such as Vietnam, Bangladesh, and Pakistan. If implemented and sustained, this could support incremental sourcing from India in sectors such as textiles, pharmaceuticals, and light manufacturing.

For now, however, this remains a scenario rather than a planning assumption.

Energy Commitments Are the Largest Unknown

The claim that India would halt purchases of Russian oil has significant implications across energy, chemical, and manufacturing supply chains. Russian crude has been a key input for Indian refineries and downstream industrial production.

A shift away from that supply would affect energy input costs, tanker routing, port utilization, and U.S.–India crude and LNG trade volumes. None of these impacts can be assessed with confidence without confirmation from Indian regulators and implementing agencies.

Agriculture Remains Politically and Operationally Sensitive

U.S. officials have suggested expanded access for American agricultural exports. Historically, agriculture has been one of the most protected and politically sensitive sectors in India.

Any meaningful liberalization would raise questions around cold chain capacity, port infrastructure, domestic political resistance, and regulatory compliance. These factors introduce execution risk that supply chain leaders should consider carefully.

Compliance and Digital Trade Issues Are Unresolved

Several areas remain undefined:

Whether India will adjust pharmaceutical patent protections

Whether U.S. technology firms will receive exemptions from digital services taxes

Whether labor and environmental standards will be linked to market access

Each of these issues influences sourcing strategies, contract terms, and long term cost structures.

Practical Guidance for Supply Chain Leaders

Until formal documentation is released, a measured approach is warranted:

Avoid making structural network changes based on political announcements

Model tariff exposure using multiple scenarios rather than a single assumed outcome

Monitor customs and regulatory guidance rather than headline statements

Assess exposure to potential energy cost changes in Indian operations

Track implementation of the India–EU agreement as a near term reference point

Bottom Line

This announcement suggests a potential shift in the direction of India–U.S. trade relations, but it does not yet provide the clarity required for operational decision making.

For now, it creates strategic optionality rather than executable change.

Until tariff schedules, regulatory commitments, and enforcement mechanisms are formally published, supply chain and logistics leaders should treat this development as informational rather than actionable. In trade, execution begins only when the documentation exists.

The post India–U.S. Trade Announcement Creates Strategic Options, Not Executable Change appeared first on Logistics Viewpoints.

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Winter weather challenges, trade deals and more tariff threats – February 3, 2026 Update

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Winter weather challenges, trade deals and more tariff threats – February 3, 2026 Update

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Published: February 3, 2026

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Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) decreased 10% to $2,418/FEU.

Asia-US East Coast prices (FBX03 Weekly) decreased 2% to $3,859/FEU.

Asia-N. Europe prices (FBX11 Weekly) decreased 5% to $2,779/FEU.

Asia-Mediterranean prices(FBX13 Weekly) decreased 5% to $4,179/FEU.

Air rates – Freightos Air Index

China – N. America weekly prices increased 8% to $6.74/kg.

China – N. Europe weekly prices decreased 4% to $3.44/kg.

N. Europe – N. America weekly prices increased 10% to $2.53/kg.

Analysis

Winter weather is complicating logistics on both sides of the Atlantic. Affected areas in the US, especially the southeast and southern midwest are still recovering from last week’s major storm and cold.

Storms in the North Atlantic slowed vessel traffic and disrupted or shutdown operations at several container ports across Western Europe and into the Mediterranean late last week. Transits resumed and West Med ports restarted operations earlier this week, but the disruptions have already caused significant delays, and weather is expected to worsen again mid-week.

The resulting delays and disruptions could increase congestion levels at N. Europe ports, but ocean rates from Asia to both N. Europe and the Mediterranean nonetheless dipped 5% last week as the pre-Lunar New Year rush comes to an end. Daily rates this week are sliding further with prices to N. Europe now down to about $2,600/FEU and $3,800/FEU to the Mediterranean – from respective highs of $3,000/FEU and $4,900/FEU in January.

Transpacific rates likewise slipped last week as LNY nears, with West Coast prices easing 10% to about $2,400/FEU and East Coast rates down 5% to $3,850/FEU. West Coast daily prices have continued to slide so far this week, with rates dropping to almost $1,900/FEU as of Monday, a level last seen in mid-December.

Prices across these lanes are significantly lower than this time last year due partly to fleet growth. ONE identified overcapacity as one driver of Q3 losses last year, with lower volumes due to trade war frontloading the other culprit.

And trade war uncertainty has persisted into 2026.

India – US container volumes have slumped since August when the US introduced 50% tariffs on many Indian exports. Just this week though, the US and India announced a breakthrough in negotiations that will lower tariffs to 18% in exchange for a reduction in India’s Russian oil purchases among other commitments. President Trump has yet to sign an executive order lowering tariffs, and the sides have not released details of the agreement, but once implemented, container demand is expected to rebound on this lane.

Recent steps in the other direction include Trump issuing an executive order that enables the US to impose tariffs on countries that sell oil to Cuba, and threatening tariffs and other punitive steps targeting Canada’s aviation manufacturing.

The recent volatility of and increasing barriers to trade with the US since Trump took office last year are major drivers of the warmer relations and increased and diversified trade developing between other major economies. The EU signed a major free trade agreement with India last week just after finalizing a deal with a group of South American countries, and other countries like the UK are exploring improved ties with China as well.

In a final recent geopolitical development, Panama’s Supreme Court nullified Hutchinson Port rights to operate its terminals at either end of the Panama Canal. The Hong Kong company was in stalled negotiations to sell those ports following Trump’s objection to a China-related presence in the canal. Maersk’s APMTP was appointed to take over operations in the interim.

In air cargo, pre-LNY demand may be one factor in China-US rates continuing to rebound to $6.74/kg last week from about $5.50/kg in early January. Post the new year slump, South East Asia – US prices are climbing as well, up to almost $5.00/kg last week from $4.00/kg just a few weeks ago.

China – Europe rates dipped 4% to $3.44/kg last week, with SEA – Europe prices up 7% to more than $3.20/kg, and transatlantic rates up 10% to more than $2.50/kg, a level 25% higher than early this year.

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Judah Levine

Head of Research, Freightos Group

Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group’s FBX Weekly Freight Update and other research on what’s happening in the industry from shipper behaviors to the latest in logistics technology and digitization.

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The post Winter weather challenges, trade deals and more tariff threats – February 3, 2026 Update appeared first on Freightos.

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Microsoft and the Operationalization of AI: Why Platform Strategy Is Colliding with Execution Reality

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Microsoft And The Operationalization Of Ai: Why Platform Strategy Is Colliding With Execution Reality

Microsoft has positioned itself as one of the central platforms for enterprise AI. Through Azure, Copilot, Fabric, and a rapidly expanding ecosystem of AI services, the company is not merely offering tools, it is proposing an operating model for how intelligence should be embedded across enterprise workflows.

For supply chain and logistics leaders, the significance of Microsoft’s strategy is less about individual features and more about how platform decisions increasingly shape where AI lives, how it is governed, and which decisions it ultimately influences.

From Cloud Infrastructure to Operating Layer

Historically, Microsoft’s role in supply chain technology centered on infrastructure and productivity software. Azure provided scalable compute and storage, while Office and collaboration tools supported planning and coordination. That boundary has shifted.

Microsoft is now positioning AI as a horizontal operating layer that spans data management, analytics, decision support, and execution. Azure AI services, Microsoft Fabric, and Copilot are designed to work together, reducing friction between data ingestion, model development, and business consumption.

The implication for operations leaders is subtle but important: AI is no longer something added to systems; it is increasingly embedded into the platforms those systems rely on.

Copilot and the Question of Decision Proximity

Copilot has become a focal point of Microsoft’s AI narrative. Positioned as an assistive layer across applications, Copilot aims to surface insights, generate recommendations, and automate routine tasks.

For supply chain use cases, the key question is not whether Copilot can generate answers, but where those answers appear in the decision chain. Insights delivered inside productivity tools can improve awareness and coordination, but operational value depends on whether recommendations are connected to execution systems.

This highlights a broader pattern: AI that remains advisory improves efficiency; AI that is embedded into workflows influences outcomes. Microsoft’s challenge is bridging that gap consistently across heterogeneous enterprise environments.

Microsoft Fabric and the Data Foundation Problem

Microsoft Fabric represents an attempt to simplify and unify the enterprise data landscape. By combining data engineering, analytics, and governance into a single platform, Microsoft is addressing one of the most persistent barriers to AI adoption: fragmented and inconsistent data.

For supply chain organizations, Fabric’s value lies in its potential to standardize event data across planning, execution, and visibility systems. However, unification does not eliminate the need for data discipline. Event quality, latency, and ownership remain operational issues, not platform features.

Fabric reduces friction, but it does not resolve governance by itself.

Integration with Existing Enterprise Systems

Microsoft’s AI strategy assumes coexistence with existing ERP, WMS, TMS, and planning platforms. Integration, rather than replacement, is the dominant pattern.

This creates both opportunity and risk. On one hand, Microsoft can act as a connective tissue across systems that were never designed to work together. On the other, loosely coupled integration increases dependence on interface stability and data consistency.

In execution-heavy environments, even small integration failures can cascade quickly. As AI becomes more embedded, integration reliability becomes a strategic concern.

Where AI Is Delivering Value, and Where It Isn’t

AI deployments tend to deliver value fastest in areas such as demand sensing, scenario analysis, reporting automation, and exception identification. These use cases align well with Microsoft’s strengths in analytics, collaboration, and scalable infrastructure.

Where value is harder to realize is in autonomous execution. Closed-loop decision-making that directly triggers operational action requires tighter coupling with execution systems and clearer decision ownership.

This reinforces a recurring theme: platform AI accelerates insight, but execution still depends on operating model design.

Constraints That Still Apply

Despite the breadth of Microsoft’s AI portfolio, familiar constraints remain. Data quality, security, compliance, and organizational readiness continue to limit outcomes. AI platforms do not eliminate the need for process clarity or decision accountability.

In some cases, the ease of deploying AI services can outpace an organization’s ability to absorb them operationally. This creates a risk of insight saturation without action.

Why Microsoft Matters to Supply Chain Leaders

Microsoft’s relevance lies in its ability to shape the default environment in which enterprise AI operates. Platform decisions made today influence data architectures, governance models, and user expectations for years.

For supply chain leaders, the key takeaway is not to adopt Microsoft’s AI stack wholesale, but to understand how platform-level AI affects where intelligence sits, how it flows, and who ultimately acts on it.

The next phase of AI adoption will not be defined solely by model performance. It will be defined by how effectively platforms like Microsoft’s translate intelligence into operational decisions under real-world constraints.

The post Microsoft and the Operationalization of AI: Why Platform Strategy Is Colliding with Execution Reality appeared first on Logistics Viewpoints.

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