Robotics Roundtable: An inside look at a fast-changing industry
Where does the robotics industry stand today? What operations are easiest to automate? How does the move to automation affect staffing and worker training? And, perhaps most importantly, what will DCs look like 10 years from now? To get some answers, we asked experts from several leading robotics companies. Here’s what they had to say.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Q: What is the current state of the robotics industry?
Kevin Reader – Knapp: There is considerable growth projected for the robotics industry—17.64% globally, from $114.7B annually in 2023 to a projected $258.3B in 2028. The largest market is the Asian Pacific market, and the fastest growing market is the North American market. The International Federation of Robotics reported that the demand for robots was primarily fueled by investments in new car production facilities and the modernization of industrial facilities.
More appropriate, perhaps, is the question “What is a robot?” since the term has been overused by venture capital companies and marketing departments, and has come to represent an array of technologies, from goods-to-person to AMR [autonomous mobile robot]-type devices, that are more specialized and more appropriately termed “transport application devices.”
Brian Pulfer – Vargo: The robotics industry still seems to be in growth mode, and I believe that growth is on two fronts. First, the number of deployments of robotics projects is continually increasing within the distribution and warehousing vertical. Second, the R&D [research and development] work for new types of robotic solutions is leading to the introduction of options for many different facets of operations. There are a few robotics offerings that have become mature and trusted deployments such as AMRs, while there are other offerings that are still developing, depending on the application of the technology.
Thomas Meyer-Jander – Movu: While some areas of the logistics industry are in a phase of consolidation, we continue to see strong demand for robotics solutions. This is confirmed by current market research, which predicts annual growth of almost 20%. The demand for robotic solutions, especially for easier, scalable, and flexible plug-and-play solutions, was one of the reasons why the Stow Group launched the new brand “Movu Robotics” worldwide in September.
Q: How has the recent slowing in warehouse investments affected new automation projects?
Steven Hogg – Bastian: We are seeing that fixed warehouse automation solutions are slowing as retailers and manufacturers grapple with capital expenditure limitations. This has led to a growing appetite for scalable technologies like mobile automation, which come in at a price point under $20 million. These offer swift deployment and a rapid return on investment.
Thomas Meyer-Jander – Movu: Our experience has shown that the economic downturn has had no immediate impact on current robotics tenders or projects. In individual cases, the decision-making process on the part of the customer is delayed and more concrete TCO [total cost of ownership] calculations are made.
Brian Pulfer – Vargo: There has definitely been a recent impact on the industry from an economic standpoint, but I believe that there is still an appetite for robotics due to the labor situation in certain areas of the warehouse and in certain regions of the country.
Kevin Reader – Knapp: Not much. Unemployment is still at record lows, and labor availability continues to be a strong decision driver. Investment in new technology is still driven by the same CAPEX [capital expenditure] rules that have applied for decades, except that if companies can’t meet growth and shipment goals, they tend to automate more quickly and at a more aggressive pace than in the past.
Q: For companies just beginning their automation journey, what are the easiest operations to automate?
Steven Hogg – Bastian: The easiest operations to automate are the monotonous, hard-to-staff processes that don’t require dynamic decision-making. By employing automation, companies can reassign employees to more challenging tasks, improving employee safety and job satisfaction. Automating these operations improves the bottom line in obvious ways, like reducing production costs, but also in less-apparent ways, such as reducing the time and resources spent onboarding new and seasonal employees.
Kevin Reader – Knapp: The easiest operations to automate are those that include manufacturing and repetitive tasks. Second are those that include labor-intensive tasks. If we are talking about robotics that must address the “tasks of the hands,” these are more difficult to automate, and there are few examples of these projects being executed well.
Thomas Meyer-Jander – Movu: When considering robotics applications for warehouses, it's important to start with a thorough assessment of specific needs, the project’s budget, and the complexity of the tasks that are being considered for automation. Customers who want to enter into automation often require standardized solutions with short installation times and seamless integration into existing systems. According to our experiences, AMR solutions for picking and shuttle systems for bins or pallets are particularly suitable for operations seeking an easy entry with a manageable level of resources.
Brian Pulfer – Vargo: When considering all the silos of activity within the warehouse, I believe the easiest area to attack is the transitory elements. The distance traveled and overall steps of a warehouse associate are very significant when considering productivity. The ability to reduce this element has a large impact from a budgetary standpoint for any operation.
Q: Does a move to automation change the level of skills needed for workers who must interact with the new systems?
Brian Pulfer – Vargo: I do not believe that it has a significant impact on the skills needed. When many of these technologies are being considered, you hear the term “cobot” or “helper” being utilized as these systems really provide assistance to the current associates. Most warehouse associates over the last 10 to 20 years have become very familiar dealing with conveyors, RF (radio-frequency) devices, tablets, etc., and a lot of these robotic solutions are utilizing similar applications—and in many cases, are even simplifying the interaction between the associate and the system. In today’s world, almost everyone is comfortable with most of these technologies in their personal lives, which translates to the warehouse.
Thomas Meyer-Jander – Movu: Of course, the introduction of automation technologies expands the range of tasks for the workers. It is then less about directly carrying out the picking or storage process than about controlling and monitoring the automation—in some ways, a collaboration between man and machine. In particular, the physical strain on the worker is reduced, which improves working conditions and reduces the susceptibility to errors. The ergonomic factor at the workplace also plays an important role in automation.
Kevin Reader – Knapp: There are considerable and new skills required of those who must maintain this new robotic technology. If you consider that 85% of software is dedicated to error handling and diagnostics, partnering with an experienced supplier also becomes a critical factor. You also cannot look at a robot as a standalone application, as it touches many upstream and downstream applications.
Steven Hogg – Bastian: Currently, one of the primary hurdles companies encounter is recruiting and retaining skilled employees. Over the past few years, there has been a 15% uptick in the number of organizations dedicating resources to upskilling and reskilling initiatives. Among these, 41% are prioritizing efforts to equip their workforce for the emerging-tech-driven roles in the supply chain sector.
Q: How are artificial intelligence and machine learning impacting robotics design and operations?
Thomas Meyer-Jander – Movu: Artificial intelligence (AI) is having a significant impact on the future of warehouse logistics by revolutionizing how operations are managed and optimized. There are several ways in which AI is influencing and shaping the future of warehouse logistics—for example, optimized inventory management, smart predictive maintenance, route optimization, picking and packing optimization, and quality control. Overall, AI is transforming warehouse logistics by increasing efficiency, reducing costs, improving accuracy, and enhancing the customer experience.
As AI technologies continue to advance, we can expect even greater innovations and improvements in the management and automation of warehouse operations, making them more adaptable and responsive to the evolving demands of the supply chain.
Steven Hogg – Bastian: Artificial intelligence allows for greater autonomy in the operation and improves the robot’s recognition and adaptability, which allows for a wider range of products to be handled by automation. This flexibility is critical for a system design that requires a vision system to handle thousands of SKUs (stock-keeping units) in an e-commerce setting or in distribution centers.
Kevin Reader – Knapp: Particularly with the “tasks of the hands,” artificial intelligence has a major impact on the success of robotic applications and is especially important when considering the success of a prototype or test application.
Brian Pulfer – Vargo: It is becoming more and more of a part of the process. There have been continuous advancements on multiple fronts—like product recognition and then how the machine reacts—that are reducing the need for human intervention, which is streamlining the process and boosting overall efficiency.
Q: How does staff training need to be adjusted for associates who will work with today’s robotic systems?
Steven Hogg – Bastian: An often-overlooked factor that significantly impacts a new automated system’s success is employee acceptance and utilization. In staff training sessions, it’s crucial to explain how automation will benefit employees and share plans for repurposed roles. Opening lines of communication with operators enables them to provide feedback on workflows, leading to improved utilization and ROI [return on investment].
Thomas Meyer-Jander – Movu: Despite automation technology, employees remain a company’s most important asset. As innovation continues, employees need regular training to keep up. Training staff to apply innovations and new technologies is a strategic investment that can result in improved efficiency, competitiveness, employee satisfaction, and overall business success. It enables successful companies to harness the full potential of technological advancements and adapt to the ever-changing business landscape.
Brian Pulfer – Vargo: I do not believe that it needs to be adjusted significantly, but what we are seeing more and more is the use of technology in training, which is a significant development. The use of interactive software, virtual reality, etc., in training is helping associates become comfortable with the technology before they ever hit the warehouse floor and start to engage with the robotic solution.
Q: With more automation being implemented every year, what will distribution centers look like 10 years from now?
Thomas Meyer-Jander – Movu: The distribution center will likely undergo further significant transformations over the next 10 years driven by advancements in technology, automation, and evolving supply chain demands. Automation will play a central role, with a wide range of tasks being performed by robots, autonomous vehicles, and other automated systems. Robots, both large and small, will collaborate with human workers in a more integrated manner. Collaborative robots will work alongside humans, enhancing efficiency and safety. Artificial intelligence and machine learning will be used extensively to optimize warehouse operations, and AI algorithms will manage inventory. Autonomous vehicles will move goods within the warehouse, and drones will probably be used for aerial inventory scans and monitoring. Sustainable practices will be a priority. In addition, some warehouses may incorporate 3D printing capabilities to produce spare parts on-site.
Kevin Reader – Knapp: Applications will be simplified, and there will be fewer applications to deal with. Software will take on a more important role, vis-à-vis flexibility, the ability to change, overall operations, and the results that can be achieved. There will also be a proliferation of AI tools to manage operations and resources.
Brian Pulfer – Vargo: That is a very interesting question, and I wish I had a crystal ball, but obviously no one does. In my opinion, there are opportunities for continued advancements, and those are being pursued by many organizations. I know that our Vargo team is continuing to pursue implementing environments that utilize any and all robotic opportunities to streamline each solution that we evaluate, and I think that we will see robotics and automation applied to solutions that will result in significant growth from a productivity and efficiency standpoint.
Steven Hogg – Bastian: With the advances in AI, machine learning, and vision systems, additional opportunities for robotic automation in distribution centers continue to evolve. These technological advances will drive continued growth in DCs, with most of the core material handling operations managed by robotic automation.
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
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.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."