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.
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
Supply chain risk analytics company Everstream Analytics has launched a product that can quantify the impact of leading climate indicators and project how identified risk will impact customer supply chains.
Expanding upon the weather and climate intelligence Everstream already provides, the new “Climate Risk Scores” tool enables clients to apply eight climate indicator risk projection scores to their facilities and supplier locations to forecast future climate risk and support business continuity.
The tool leverages data from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to project scores to varying locations using those eight category indicators: tropical cyclone, river flood, sea level rise, heat, fire weather, cold, drought and precipitation.
The Climate Risk Scores capability provides indicator risk projections for key natural disaster and weather risks into 2040, 2050 and 2100, offering several forecast scenarios at each juncture. The proactive planning tool can apply these insights to an organization’s systems via APIs, to directly incorporate climate projections and risk severity levels into your action systems for smarter decisions. Climate Risk scores offer insights into how these new operations may be affected, allowing organizations to make informed decisions and mitigate risks proactively.
“As temperatures and extreme weather events around the world continue to rise, businesses can no longer ignore the impact of climate change on their operations and suppliers,” Jon Davis, Chief Meteorologist at Everstream Analytics, said in a release. “We’ve consulted with the world’s largest brands on the top risk indicators impacting their operations, and we’re thrilled to bring this industry-first capability into Explore to automate access for all our clients. With pathways ranging from low to high impact, this capability further enables organizations to grasp the full spectrum of potential outcomes in real-time, make informed decisions and proactively mitigate risks.”