According to Rick Faulk, CEO of warehouse robotics firm Locus Robotics, there is about 20 billion square feet of warehouse space around the world. An additional 3 billion square feet will be built in the next few years. And yet, 95% of that space is completely unautomated.
Warehouse automation has rapidly accelerated in recent years, and the COVID-19 pandemic has quickened that pace, but there is a lot of room to grow, and plenty of automation solutions still to be developed.
“It all has to be automated. It’s a massive market and COVID has put a huge spike in demand and the [associated] challenges,” Faulk told Modern Shipper. “COVID has accelerated a lot of the trends that have been [growing] in the market in the last few years.”
Statista reported the global warehouse automation market is expected to reach $15.59 billion this year, growing steadily to $30.15 billion by 2026. As recently as 2016, it was $9.95 billion. With so much space to grow, it can be surprising to learn that 10% of U.S. warehouses were using some form of automated technology by 2016.
Warehouse costs, especially labor, continue to rise. The average nonsupervisory warehouse worker made $18.52 per hour in February, according to Bureau of Labor Statistics (BLS) data. Add in supervisory positions, and the average wage jumped to $22.41 per hour, up from $18.60 in 2016. Preliminary BLS data for March reported 14.1 million people working in warehouse and storage operations. In March 2016, there were 9 million.
According to BLS data, cumulative wages for warehouse operations have grown 88.7% in five years, so it’s no wonder more warehouse operators and shippers are looking for automation tools. Besides costs, there is another impact driving automation.
“There’s this thing that everyone is dealing with, which is the Amazon (NASDAQ: AMZN) effect, and they’ve raised expectations so high, the only way to compete is through automation,” ,” Faulk said
COVID drove Locus Robotics’ business in the past year, with Faulk saying some accounts have grown more than 100%. Volume peaks are also changing from previous years, Faulk said.
“The peaks are becoming steeper. We just went through a holiday peak a few months ago, and those peaks that we saw became even steeper because no one wanted to travel and ordered everything online,” he said. “What we’re finding is along with the inbound orders exploding, returns are exploding as well, which is happening on the back end.”
There’s this thing that everyone is dealing with, which is the Amazon effect, and they’ve raised expectations so high, the only way to compete is through automation.
Rick Faulk, CEO of Locus Robotics
The growth in the on-demand economy has also hurt warehouse staffing, Faulk said, noting that many typical warehouse workers have turned to gig economy jobs working for Uber, Instacart and Lyft. In addition, more warehouses are being built in clusters near existing facilities, but the local labor pools in those areas are not expanding.
Locus Robotics offers warehouse picking robots called LocusBots that work alongside workers to ensure accuracy and speed in picking operations. The bots transport bins, which lowers worker fatigue and increases productivity. Faulk said the company’s solutions will “double the efficiency of a human, so that cost to pick will be cut by 50%.”
“If you double the efficiency of a human, you can ship twice the product out of that building,” he said, noting ancillary benefits such as lower training costs, lower building costs as space is optimized, and improved on-time performance, which can reduce late delivery fees and improve freight spend.
“We have designed our solution so it’s easy to deploy, easy to manage, increases productivity and reduces error rates,” Faulk said. The robots can communicate in more than a dozen languages, he added, reducing language barriers common in warehouses.
Locus said its robots pick with 95% accuracy. Each item is scanned and an image of the correct item is also displayed on an iPad for a visual check.
Read: Prologis Research points to automation as key to logistics operations
Currently, most Locus Robotics deployments are in large warehouses, but Faulk said more conversations are taking place with potential customers looking to deploy the technology in microfulfillment centers that are growing in popularity for e-commerce brands.
As for the future of warehouse automation, Faulk said to keep an eye on visualization of data and predictive analytics.
“When we deploy a solution in a warehouse, … we will go into the warehouse and we’ll mount 25 monitors in that building and display all the data [for workers and managers to see in real time],” he said.
Analytics are also helping managers identify where labor needs to be assigned, and to do it in real time by displaying the information on monitors. More managers are using wearables as well to give them access to the data wherever they are in the building, which speeds decision-making.
Locus Robotics’ solutions are also open API tools, which allows them to integrate with other systems in facilities seamlessly.
Click for more Modern Shipper articles by Brian Straight.
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