Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Talk of automating a distribution center (DC) can mean different things to different people, but in the end, it’s all about making DC operations run more smoothly and efficiently. At its most basic level, material handling automation helps free employees from mundane, manual tasks and allows them to focus on value-adding work or jobs where only the human touch will do. This has become an increasingly important advantage in the labor-challenged post-pandemic supply chain, and one that is changing the look and feel of the distribution center.
A recent Gartner survey points to a growing supply chain trend toward “flexible” automation solutions in particular, predicting that three-quarters of large companies will have adopted some form of “smart” robots for warehouse and DC operations by 2026. These are advanced robots or robotic systems that use intelligence, guidance, or sensors to operate independently or with and around humans. Examples include autonomous mobile robots (AMRs), autonomous forklifts, and similar solutions that require little or no infrastructure investment. Essentially, they’re not bolted to the floor, as traditional systems are.
Many companies are already testing the waters, however, and are racking up labor-savings and productivity improvements as they go. Here are two ways flexible robotics are changing the look and feel of the DC.
CHANGING THE LANDSCAPE
Automation strategies are having a considerable effect on the logistics real estate market, both in terms of facility design and location. With respect to design, today’s DCs require increased power capacity and higher-speed internet connections to power systems and charge equipment—and some may even require extra space to store charging equipment or higher ceilings to accommodate automated vertical storage systems, vehicles, and other types of machinery, according to Ben Harris, senior managing director of the logistics and industrial team for commercial real estate firm Cushman & Wakefield.
Research from real estate services provider Savills Industrial Practice Group, released late last year, highlights those trends as well. The company said it expects more facilities to be retrofitted or designed to accommodate investments in automated technologies in 2022. The report noted that the average clear height for large warehouses has already increased by 23% to 37 feet since 2000, and that heights will grow as advances in robotics allow tenants to take greater advantage of vertical storage.
When it comes to location, flexible robotic solutions are giving companies a wider playing field for developing their distribution networks.
“Automation is enabling greater choice” in where DCs can be located, Harris explains. “Most types of automation can be incorporated into any modern facility we have, [but] the automation solutions with the highest chance of adoption are those that are more flexible, more mobile, and less tied to the physical characteristics of the buildings than they were in the past.”
As an example, Harris says flexible, smart automation has allowed some companies to expand their DC operations into regions with limited labor pools by reducing their reliance on people—robot-assisted picking is one example. This can be helpful for companies looking to locate distribution and fulfillment operations in important, but less densely populated, markets, for one.
“Before, the labor situation [in some regions] could be so bad that a company couldn’t consider a particular location for a warehouse or distribution center. But automation addresses that problem for some,” he says. “It allows some companies to enter markets they never thought possible.”
On the flip side, the use of AMRs and similar labor-saving devices can open up opportunities in urban markets where labor is more plentiful but competition for talent is stiff and employees are expensive—such as New York City. The automation advantage can be especially helpful for e-commerce businesses looking to improve their final-mile logistics operations.
“Automation is allowing some companies to unlock infill [sites located in mostly built-out markets] in urban locations where labor costs have been major hurdles,” Harris adds. “Near metro environments, we’re seeing even more automation, because the need for speed is that much higher within those geographies. Additionally, the options for labor become much more constrained; you’re competing with totally different industries [for talent] in those markets.”
GETTING CREATIVE
Flexible automation is also pushing creative boundaries in the DC, as technology providers and customers work together to find new and unique applications or “use cases” for technology—especially robots.
“Feedback we hear from customers is ‘We don’t just want the robot; we want a solution,’” says Stefan Nusser, senior director of robotics automation for Zebra Technologies, which develops autonomous mobile robots (AMRs) and collaborative robots for industrial applications. Increasingly, such solutions are being driven from within, he adds. “When you go into a site, you’ll see many opportunities for robots. Often, customers will say ‘Isn’t this cool; look at what we made them do.’ And that kind of thing happens organically, from the bottom up.”
A case in point: Zebra Technologies’ Fetch Robotics autonomous recycling removal solution, which was developed in conjunction with a third-party logistics service provider (3PL) that had adopted Fetch AMRs to help streamline operations in one of its DCs. [Fetch Robotics became part of Zebra Technologies in a 2021 acquisition.] The 3PL had a problem that was piling up: Empty boxes and excess packing material were accumulating in aisles and at the ends of pick stations faster than employees could safely transport them to a separate recycling area within the DC. Looking to clear floorspace for both workers and the robots moving throughout the facility, the employees programmed the AMRs to pick up the boxes and packing material and take it to the recycling area—a task that was previously done manually.
“We have a robot that, essentially, has the ability to move a cart from one location to another,” Nusser says, explaining that the employees put collection bins on top of the AMR-compatible carts, set them up at a handful of collection points throughout the DC, and then used the accompanying AMR software to tell the robots what to do. “Every half hour, the robot grabs [the carts] and brings them to the recycling area, then brings them back.”
The easy-to-configure software allows employees to change the frequency of removal, if needed, as well as add locations or containers. What used to require multiple employees doing nothing but recycling removal all day is now automated, freeing up those workers for more value-adding work.
“In a way, it’s the perfect solution,” Nusser says, adding that the process has opened the floodgates of ingenuity, as associates think of ways to apply the labor-saving technology to other tasks as well. “Many times, what you do with the AMR is just as hard a question to answer as how do you make the technology work. For [the customer], this is now another tool in their toolbox.”
A simple, tech-driven tool that has changed the way the DC works, for the better.
The Gartner survey likewise points to the adaptive nature of such tools, noting that other common uses for flexible robots include transporting pallets of goods, delivering items to a person, or carrying out piece-picking tasks. Those applications will only increase, contributing to an even more dynamic DC.
“They [flexible robots] can more readily and inexpensively be implemented, and can be easily scaled to better manage extremes in peaks and troughs of demand,” according to the Gartner report. “Because of the adaptive nature of intralogistics smart robots, companies can pilot use cases for low, upfront investment and continue to test new and varying use cases as they become more familiar with the technologies.”
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”