The hype is all about package delivery. But some visionary companies have been quietly putting drones to work in the warehouse—with impressive results.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Warehouses are noisy places, with conveyors, cranes, and forklifts shuttling items, cases, and pallets in and out of storage. But the next time you hear a persistent buzz in a busy DC, look up—the sound may not be coming from the material handling equipment, but from a flying drone.
Drones used in logistics usually make the headlines only when they involve deliveries to consumers. Recent examples include Amazon Prime Air's delivery of a bottle of sunscreen to an Amazon-hosted conference in Palm Springs, Calif., and the dropoff of an Amazon Fire streaming device and bag of popcorn to a residence in the British countryside. UPS Inc. also made the news when it whisked an asthma inhaler to an island in Boston Harbor, as did Alphabet Inc., Google's parent company, when it (literally) dropped off burritos from a Chipotle restaurant to hungry students at Virginia Tech's Blacksburg campus.
Despite those high-profile successes, parcel delivery drones face many hurdles before they can transition from trials to widespread use. Limits on battery life and payload weight still restrict the distance they can travel and the size of the packages they can carry. Strict government regulations and public safety concerns have made many companies wary of investing in broader drone programs until the picture clears up.
In the meantime, some see a very different future for drones in logistics—one where the flying bots are used for collecting data instead of delivering parcels. Attach a small camera to a drone and it can send wireless video back to users, allowing them to count inventory, patrol boundaries, or locate trucks.
Without the burden of a payload, the lightweight drones can hover for hours over small areas like truck yards or inside giant warehouses, proponents say. And by avoiding flights that cross public roads and buildings, drones can dodge many of the toughest safety restrictions that now inhibit their use (such as rules requiring them to stay in sight of a human pilot and to avoid private property).
VIEW FROM ON HIGH
Transportation and logistics giant UPS Inc. has already run trials that involve flying drones inside its DCs. The airborne vehicles can perform inventory counts in cavernous warehouses faster than a worker could on foot, and they can verify the quantity or identity of goods on high shelves without the safety risks that come with sending an employee up on an elevated platform, a UPS spokesman said.
Retail powerhouse Wal-Mart Stores Inc. has also been experimenting with indoor drones. It recently applied for a U.S. patent on a system that would leverage both their data collection and delivery capabilities by using drones to locate and drop off merchandise within its giant retail stores, a company spokesman confirmed. Intended to cut the amount of time customers spend waiting for their goods, Wal-Mart's patent application describes a process in which a store employee would dispatch an airborne drone to fetch an item located within that store and bring it to a waiting customer. To avoid having drones flying over the heads of nervous shoppers, the system would configure the flight path so they fly over shelves, not aisles.
Other logistics-related opportunities include using drone cameras to scan buildings for safety and security purposes, inspect lots and yards, track the location of trucks as they approach the dock, and locate trucks in a staging area when it's their turn to load, said Bruce Bleikamp, a sales manager for Cimcorp, a manufacturer and integrator of automated robotic solutions.
"Sometimes drivers get tired of waiting and they just leave," he said. "Say you told the guy to go park in slot #67 at the end of the row, but then when you go back to get him, he's not there. Now you could dispatch a drone to fly over the area and locate him, so you could have somebody go knock on his window and tell him to get back here."
Alternatively, a DC manager could dispatch a drone equipped with a camera to hover over a fourth- or fifth-level rack in a high-bay warehouse and perform a quick inventory count, eliminating the need to send a lift truck to the location, pull the pallet down to ground level, and have someone conduct a manual inspection, Bleikamp said.
Although not yet in widespread use, these applications demonstrate the potential of drones to save precious time in logistics operations. The technology still has a ways to go, Bleikamp said, but adoption rates could soar as vendors address limitations such as the inability of drone-mounted cameras to see inventory stacked in multiple rows, like goods in a push-back or flow-through rack.
CLEARED FOR TAKEOFF?
As for the market outlook for drones in logistics-related applications, Bob Etris, for one, is decidedly bullish. Etris, who is a partner and director at Evans Inc., a Falls Church, Va.-based consulting firm, said this niche market is growing fast and has a great deal of potential.
That's partly because regulations are looser on private property—such as a warehouse—than in public airspace, he said. Right now, Federal Aviation Administration (FAA) rules still apply, particularly if a warehouse is close to an airport or other "controlled airspace" that is tightly managed for aviation safety. But even those rules are expected to change within the next 18 to 36 months, as federal regulators begin easing restrictions on drone use for applications such as search and rescue operations or locating fugitives. Once those changes take effect, the market for drones in business applications could really take off, Etris said.
FAA figures indicate that drone use is already picking up steam. Drone demand is still driven by hobbyists flying small models of unmanned aircraft systems (UAS)—the government term for flying drones—with the market predicted to grow from about 1.1 million vehicles in 2016 to more than 3.5 million units by 2021, according to the agency's "Aerospace Forecast - Fiscal Years2017 to 2037."
But commercial drones—the type that would be used for logistics applications—are closing the gap. The commercial, non-hobbyist UAS fleet is forecast to grow from 42,000 at the end of 2016 to a conservative target of 442,000 aircraft by 2021 or a high-end target of 1.6 million aircraft. That broad range of target estimates reflects uncertainty about the regulatory environment, the FAA says. The higher estimate would only apply if lawmakers decide to ease restrictions such as the rules that allow operation only within daytime hours and within the operator's line of sight.
Loosen those regulations, Etris says, and the market could explode. "The barriers to entry are far [lower] than most people think," he said. "It's not terribly difficult to set one of these up."
Industry figures support those growth predictions. A recent survey conducted by the trade group MHI across 1,100 manufacturing and supply leaders showed that the use of autonomous vehicles and drones (which were grouped together for survey purposes) would nearly quadruple over the next five years—going from just 8 percent of respondents today to 31 percent. The study, titled "The 2017 MHI Annual Industry Report—Next-Generation Supply Chains: Digital, On-Demand, and Always-On," also found that more than half of the respondents (54 percent) believed driverless cars and drones had the potential to transform supply chains and create competitive advantage.
Vendors also see clear skies ahead for the wider adoption of drones in logistics. Drone providers such as Pinc Solutions, Verizon's Skyward division, and Intelligent Flying Machines Inc. (IFM) have seen a steady increase in the number of warehouses that are looking to experiment with drones. IFM, for example, says it can perform automated inventory counts for an entire warehouse within 20 minutes, ensuring accuracy by connecting the system to the facility's warehouse management software.
Between rising market demand, loosening government regulations, and a growing ecosystem of vendors, the case for deploying drones in the warehouse is building quickly. Experts like Evans' Etris advise any company that operates DCs to keep an eye on trade shows and industry publications to keep up with changes in drone technology and regulation. If the forecasts are right, advances in those areas could unleash flocks of flying drones into a warehouse near you soon.
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.