PHOTO COURTESY: RIGHTHAND ROBOTICS
If you work in a warehouse there’s a good chance that an increasing number of your coworkers might be robots. Kiva Systems started the trend in 2003 by developing automated “squat orange cubes on wheels”, that lift stacks of inventory shelves and deliver them to pickers. Amazon accelerated this trend by purchasing Kiva Systems in 2012 for $775 million.
Amazon Robotics is Born
Within a couple of years Amazon took Kiva off the market and rebranded the division as Amazon Robotics, providing themselves with a significant competitive advantage over other logistics businesses and retailers. One of the unintended consequences of this step was an influx of robotics startups, such as 6 River Systems, RightHand Robotics and Locus Robotics, into the warehouse space. They stepped in to serve the needs of the retailers and logistics businesses that had been left high and dry by Amazon’s discontinuation of support for Kiva.
Business is Booming & Labor is Tight
The primary growth driver for this robotics activity is the explosion of e-commerce business. Web sales in 2016 reached $394.86 billion, a 15.6% increase over $341.7 billion in 2015. This represents the highest growth rate since 2013, when online sales grew 16.5% over 2012.
This in turn is fueling a hiring spree. Last year US warehouses added 262,000 jobs over the past five years with now nearly 950,000 working in the sector, the fastest-growing sector in the logistics industry as a whole. Amazon made a pledge in January this year to create more than 100,000 full-time jobs in the next 18 months. Most of these are targeted for work in their fulfillment centers. They currently have 150 and plan to increase that by another 20 this year.
As one of the first steps Amazon this week are hosting a giant job fair in multiple locations around the country with the goal of hiring 50,000 new workers. Offers will be made on the spot to fill the positions. However it’s currently a tight logistics labor market and the crunch will worsen when hiring starts as early as September for the holiday shopping season.
Amazon Robotics Challenge
This combination of explosive e-commerce growth and a tightening labor market is serving as a catalyst for development of automated robotic solutions. Amazon are very aware of this and have sponsored for the past three years the Amazon Robotics Challenge (ARC). Contestants are invited to develop a robot to pick and stow items on shelves or in boxes.
16 teams are in the running this year at RoboCup 2017 in Nagoya, Japan. Teams are usually given a heads up as to what they would be picking, but this year they get to know only 50% of the items. In addition the machines must work in a limited space, be quiet and be able to work autonomously. Team Delft from the Netherlands were the winners of the 2016 challenge and Team RBO from the Technical University of Berlin where the winners of the first ARC held in Seattle, Washington.
Picking items is labor-intensive and the biggest labor cost in most e-commerce distribution centers. Saks Fifth Avenue owner Hudson’s Bay and Chinese online retail giant JD.com are currently testing robotic pickers in distribution centers. Robotics companies are claiming that they can move gadgets toys and consumer products 50% faster than human workers.
Hudson Bay is testing RightHand Robotics robots in a distribution center in Scarborough, Ontario.
As reported in the Wall Street Journal
“This thing could run 24 hours a day,” said Erik Caldwell, the retailer’s senior vice president of supply chain and digital operations, at a conference in May. “They don’t get sick; they don’t smoke.”
Also from the same article,
“Previous waves of warehouse automation didn’t lead to sudden mass layoffs, partly because order volumes have been growing so fast. And automated picking is still at least a year away from commercial use, robotics experts say. The main challenge lies in creating the enormous databases of 3D-rendered objects that robots need to determine the best way to grip new objects.”
The Warehouse Employees Biggest Fear
This is the biggest fear by far from warehouse employees – robots eliminating the need for human workers. A recent analysis by Robert Atkinson and John Wu of the Information Technology & Innovation Foundation refutes that. They quantified the rate of job destruction in every decade from 1850 onwards based on census data. They found that an incredible 57% of the jobs that workers did in 1960 no longer exist today. However employment keeps on relentlessly climbing. Old jobs are being replaced by new, different jobs.
Warehouse workers are in a good place right now. A tight labor market virtually guarantees better working conditions. However the invasion of the warehouse robots is slowly picking up speed requiring flexibility from the worker in adapting to the opportunities presented by their new working environment.
If you’re interested in learning how shipping by rail might better meet your freight transportation needs call New Mexico Transloading at 505 – 908 – 1911. We’d be delighted to have a conversation with you.