We're likely to see more robots in DCs within the decade. But Tom Bonkenburg says the first wave will probably look a lot more like driverless forklifts than R2-D2 or C-3PO.
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
The Boston Consulting Group recently predicted that global sales for robots would reach $67 billion by 2025, with the industrial segment being the largest component of that market.
That prediction comes as no surprise to St. Onge Co. consultant Tom Bonkenburg, the leading expert on the use of robotic systems in distribution. A mechanical engineering graduate from the Rensselaer Polytechnic Institute, Bonkenburg has been fascinated by robots since he was a kid.
That fascination led him to a career in material handling. For the past 15 years, Bonkenburg's consulting efforts have focused on supply chain and warehouse design with a strong interest in custom automation and robotics within the distribution environment. He is currently a partner in the St. Onge Co. and heads up that firm's European office.
Bonkenburg recently discussed trends in robotics with DC Velocity Editor at Large James Cooke.
Q: What's the current state of "robotics" in warehousing?
A: The current state of robotics depends on your definition of the word "robot." For many years, we have seen robotic technology in the distribution environment such as AS/RS (automated storage/retrieval systems), AGVs (automated guided vehicles), shuttle systems, transfer cars, palletizers, Kiva, Symbotic, etc. These types of systems are mature, well understood, and installed in DCs around the world. However, if your definition of "robot" includes such terms as multipurpose, adaptable for different types of jobs, redeployable, or even "humanoid," then robotics is not very common in a typical warehouse environment.
Q: Any idea of the percentage of DCs that are using robotics in their operations? A: This is a very difficult question to answer. Our research shows that 15 percent of warehouses are mechanized, and only 5 percent have true automation. Robotic systems would typically fall somewhere within these operations. The key point to note is that 80 percent of DCs are currently manual, creating a large potential opportunity for the future deployment of robotic systems if they could be made capable and affordable.
Q: What types of robotic systems are being used in warehousing, and for what purpose? A: We often see robotic systems such as pallet AS/RS and end-of-line palletizers used in high-volume finished-goods warehouses that are attached to factories. These systems tend to operate for three shifts and handle a limited range of similar SKUs (stock-keeping units) but high volumes. The "goods to picker" technologies such as shuttles are being deployed in some direct-to-consumer piece picking operations with many small orders and large SKU bases.
Q: How about humanoid robotics? How soon do you think we'll see humanlike robots in warehousing? A: Many of the traditional robotic-arm manufacturers are developing two-arm "humanlike" robots for use in assembly operations. These robots are still bolted down within an automated work cell like typical manufacturing robots. So far, few have been installed, but the interest in these new robots is very high. I believe this technology will first take hold in the manufacturing environment and then possibly move to the distribution side of the supply chain. This transition will likely take several years and will require a few more software, sensor, and cost-point breakthroughs. The good news is that several companies are investing serious money into advancing this technology.
Q: Do you know of any companies that are experimenting with humanoid robots in DCs? A: One of the most impressive humanoid robots, Robonaut, was developed by NASA in cooperation with General Motors. They have experimented in the manufacturing environment but as far as I know not in the distribution environment.
Q: There's a company called Rethink Robotics that makes a humanoid robot called "Baxter." Where does development of that technology stand and is it being used in warehouses? A: I am a big fan of Rethink Robotics and their underlying concepts. They have developed a low-cost, easy-to-use software-focused robot that works alongside human workers without fences or safety gates. Unfortunately, their first system, Baxter, is quite slow and has limited capability when it comes to warehousing and many manufacturing operations. There are rumors in the market that their second-generation robot will come out next year, and I am looking forward to seeing if future generations, such as versions three or four, would be more suited to distribution operations.
Q: Are any companies developing humanoid robots for use in warehousing? A: Rethink Robotics has focused its development energy on manufacturing pick-and-place-type applications rather than on the more complex warehouse environment. This market strategy is similar to the path taken by other companies that are currently working on dual-arm robotics. The warehousing industry needs a robotic manufacturer to take the Rethink approach but focus on the distribution side of the supply chain.
Q: What's the biggest obstacle to putting robots in warehouses—cost or technology? A: The truth is that both cost and technology are currently barriers to bringing robots into the warehouse. A few fundamental breakthroughs are necessary to both improve capability and reduce cost. The good news is that mini robotic breakthroughs are happening every year, and their frequency is increasing rapidly. The future path to commonplace robotics will depend on low-cost sensors and inexpensive but massive computing power. Anyone who used to have a rotary phone and now has an iPhone knows that those two key ingredients improve rapidly! I believe that all supply chain professionals should watch the robotics space because we will all be amazed how fast it will change.
Q: What's the biggest opportunity for using robots in warehousing? A: When looking forward to the next likely breakthroughs in robotic technology, I feel that robotic industrial trucks, similar to but more advanced than those made by Seegrid, will be the true entry point for more widespread use of robotics in the warehouse. A truly functional fully robotic forklift could find immediate application in almost any warehouse. If you look at the recent breakthroughs in self-driving cars by companies such as Google, GM, BMW, Audi, etc., it is not hard to picture this happening in the coming years.
Q: You said that robotic industrial trucks would likely be the entry point for robots. Why is that? Why are we likely to see driverless forklifts in a warehouse before humanoid robots? A: While building a fully driverless forklift will be a great challenge, developing a humanoid robot to work in a warehouse will be even more difficult. Modern forklifts offer a robust, inexpensive, and well-designed physical platform to eventually automate with computers, sensors, and vision systems. There are several large forklift manufacturers with strong sales and support networks that could possibly deploy and maintain a robot forklift fleet.
In the case of a humanoid robot, there is still no strong physical hardware platform to start with and few large companies produce them. Most humanoid robots are currently prototypes or focused on light-duty manufacturing. More robust humanoid robotic systems with large support networks need to be developed before we can even think of applying them to warehouse applications. The modern forklift has a head start over humanoid robots since it is already a hardened piece of warehouse equipment with the relatively easy task of moving standard pallets rather than the more difficult humanoid tasks that require the handling of a wide range of dissimilar items.
Q: Do you expect humanoid robots to replace warehouse workers or to work alongside human workers in warehousing? A: My personal belief is that robots will work alongside human workers. People are very, very good, and we keep making them better. Anyone who has spent more than a day in a distribution center will see that it is a very dynamic environment that requires adaptability, flexibility, quick thinking, creative problem solving, and good decision making. Similar to a WMS [warehouse management system] or a conveyor system, robots will be a tool that the smart warehouse team will use to improve its operation. At the end of the day, a supply chain is only as good as the people who work within it, and therefore, the need for talented and motivated people will never disappear.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.