Using easy-to-install kits made from off-the-shelf components, Toyota converted 22 tow tractors at one of its plants into automated guided vehicles. Plans are now in the works to bring the technology to DCs.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
Imagine walking into a material handling equipment maintenance and repair shop, pulling standard components off the shelf, and—with relatively little time and effort—turning an ordinary industrial tow tractor or forklift into an automatic guided vehicle (AGV).
That day isn't here just yet, but it's closer than you might think. An automation project at a Toyota auto manufacturing plant in Georgetown, Ky., has shown that it's possible to retrofit some types of manual equipment quickly and easily, earning a big return in terms of cost, labor, efficiency, and flexibility. Although the project involved a manufacturing environment, it may well serve as a prototype for bringing more AGVs to material handling environments, where they have yet to make major inroads due to their cost and complexity.
TOW TRACTOR TRANSFORMATION
Toyota Motor Manufacturing Kentucky Inc. (TMMK) makes the Camry, Venza, and Avalon models at the Georgetown facility, a 1,300-acre complex encompassing some 7.5 million square feet of manufacturing and assembly space. Like all Toyota operations, the Georgetown plant adheres to the Toyota Production System, also known as "just-in-time" or "lean" manufacturing.
Over the years, Toyota had honed production at the Georgetown plant to a high level of efficiency. But there was still room for improvement when it came to the internal movement of parts. The factory, built in 1988, is not as compact as newer facilities. As a result, workers delivering materials to the body-weld department had to drive long distances, navigating congested areas to drop flow racks and palletloads of parts at work cells. Sudden stops, complicated workflow paths, and the occasional traffic jam or collision led to product damage and delayed deliveries.
A team assigned to study the problem determined that automating the transportation of parts to the 1 million-square-foot body-weld area—in essence, taking human drivers out of the equation—would eliminate most of the delay and damage problems. Their conclusion may not be very surprising. What is surprising is the way TMMK accomplished that objective: Instead of purchasing new equipment, the factory chose to retrofit 22 of its Toyota 24-volt, AC-drive tow tractors with locally built automation kits that turned them into automatic guided vehicles.
To develop these "home-grown" AGVs, TMMK worked with two local business partners—AutoGuide, an automation specialist led by AGV innovator Paul J. Perry, and Industrial Concepts Inc. (ICI), a developer of custom machinery and control systems whose president, Tim Taylor, is a former TMMK mechanical whiz. (AutoGuide and ICI are closely allied; the two share a facility across the street from TMMK, and ICI's executives have an ownership stake in AutoGuide.)
Utilizing the same off-the-shelf devices already in use for other types of AGVs at TMMK, AutoGuide outfitted the 10,000-pound-capacity tow tractors with obstacle and guidance sensors, radio-frequency modems, RFID tag readers, and a touchscreen programmable logic controller (PLC) interface, among other technologies. All of the components are contained in a removable attachment designed by AutoGuide. Installation is a simple matter of drilling six holes in a tractor's chassis, and is the only physical change required, according to Tim Meyer, Toyota Production System solutions and AGV product manager for Toyota Material Handling U.S.A. Inc.
Flexibility was another reason TMMK chose to convert standard, manual equipment to AGVs. The stand-alone attachments can be installed either at the time of purchase or lease, or after the vehicles go into service, and they can be easily removed and reinstalled on other vehicles, Meyer explained during a tour of TMMK. Drivers can switch the tractors from automatic to manual mode simply by stepping on a pressure-sensitive mat in the driver's compartment.
NAVIGATING "SPAGHETTI JUNCTION"
Before the AGVs arrived in the body-weld department, manned tow tractors dropped off flow racks and pallets full of parts alongside each of the robotic welding cells, which were located on both sides of a wide aisle. Team members then picked up the parts they needed from racks and pallets on both sides of the aisle. The work and material flow for parts delivery to the robotic welding cells involved 16 stops, or actions, from pickup to placement in the welding robot load positions.
Today, the storage racks and pallets are gone. Now, a driverless tow tractor pulls as many as five dollies full of auto parts from the storage area to the cells, a distance of about 950 feet. Team members retrieve the parts they need from the dollies, which are positioned parallel to the cells just a few steps away, eliminating the need to cross the aisle. Once all the parts have been unloaded, the AGV returns to the storage area for more material, while another tractor with the next batch of parts arrives just when they're needed. Instead of 16 stops, there are only nine. And because the AGVs always travel the same route at the same speed, the time from pickup to arrival at the welding cells is consistent and predictable.
To get where they're going, the tow tractors follow over two miles of magnetic strip slotted into narrow troughs in the concrete floor. Their positions are tracked by RFID tags embedded in the floor.
Navigating the high-traffic body-weld department requires care and precision. The weld stations are positioned along a 300-foot "highway" with nine routes branching off and merging into it—an area known as "spaghetti junction." In addition, the tow tractors have to share the road, so to speak, with other Toyota AGVs (such as L-cart material transporters and low-profile "Mouse" tug-carts) that motor along the same magnetic guide paths. The tow tractors also cross paths with the manned vehicles that deliver partial loads and those destined for multiple drop-off sites. Drivers are required to yield to the AGVs.
To manage the movements of the automatic vehicles, TMMK's AGV implementation team worked with ICI to develop traffic-control technology that would be compatible with the guidance systems and control devices already in place for other types of AGVs. The resulting Automated Vehicle Intersection Navigational Utility (AVINU) is "the link between the AGVs and everything else that's automated," said ICI President Tim Taylor.
The wireless system communicates with the different types of AGVs, reporting each one's location, status, and performance data—information that can be viewed on any authorized computer in the facility. AVINU assigns loads to vehicles and regulates traffic at intersections; arrival at certain RFID tags triggers wireless transmission of instructions to the AGVs. The system also monitors battery status and tells the vehicles when to head over to an opportunity charger.
REACHING A BROADER AUDIENCE
Changing the way parts are delivered and reconfiguring the robotic welding cells has cut walking distances by 978 miles a year, saving five hours of walking time per shift—the equivalent of 317 work days annually, said Paul Stafford, specialist production engineering and AGV implementation lead. Furthermore, eliminating the storage pallets and flow racks opened up nearly 37 square feet of work space adjacent to each cell, freeing up space for other activities.
Because the AGVs travel the same paths at a consistent speed without so much as an inch of variation, they can safely navigate turns that would challenge human drivers—in some places, with less than six inches of clearance, according to Stafford. Congestion, collisions, sudden stops, and in-transit product damage have all been eliminated.
The labor savings have been equally impressive. The body-weld department has been able to reassign 42 people to other, more value-adding positions—including to the AGV implementation team—and nobody has been let go.
So far, the Toyota AutoGuide/AVINU project has saved TMMK more than $1 million annually, and ROI was achieved in just over one year. The payback has been substantial enough that the AGV implementation team will roll out the system elsewhere at Georgetown and will help to implement it at other Toyota auto plants.
The project foretells wider adoption of automation, not only in manufacturing but also in warehousing and distribution. In fact, AutoGuide attachments for Toyota pallet trucks and forklifts are already in the works. "I believe the automation market is limitless, although there will be challenges," Meyer said.
One of those challenges will be to convince warehouse and DC operators that automatic vehicles are not as complicated and expensive to purchase, install, and operate as they might think. That may not prove particularly difficult, however: Meyer estimates that the cost of a new, mass-produced vehicle plus the AutoGuide automation kit would be approximately one-fourth that of a custom-built traditional AGV. The fact that the AGVs are created from standard industrial vehicles and widely available, off-the-shelf components rather than proprietary controls will keep the cost down, he added.
Potential buyers will also want assurances of ready access to maintenance services for this new breed of AGVs, said Martin Boyd, vice president of product planning, marketing, and training for Toyota Material Handling U.S.A. Inc. That makes it critical to provide service for both the truck and the AGV components through the existing dealer network with its established relationships, he said.
Boyd agrees that lower-cost AGVs are poised for rapid growth. The economic downturn forced companies to look for waste, cut costs, and introduce more process efficiencies while considering how to better prepare for rapid change, he said in an interview at TMMK. Automation can help in all of those areas, and lift truck manufacturers will play a leading role in bringing it to a wider audience, he said. "We want to develop broader solutions around the customer to help them save money. We don't see automation as a competitor. We see it as an enabler."
“The past year has been unprecedented, with extreme weather events, heightened geopolitical tension and cybercrime destabilizing supply chains throughout the world. Navigating this year’s looming risks to build a secure supply network has never been more critical,” Corey Rhodes, CEO of Everstream Analytics, said in the firm’s “2025 Annual Risk Report.”
“While some risks are unavoidable, early notice and swift action through a combination of planning, deep monitoring, and mitigation can save inventory and lives in 2025,” Rhodes said.
In its report, Everstream ranked the five categories by a “risk score metric” to help global supply chain leaders prioritize planning and mitigation efforts for coping with them. They include:
Drowning in Climate Change – 90% Risk Score. Driven by shifting climate patterns and record-high temperatures, extreme weather events are a dominant risk to the supply chain due to concerns such as flooding and elevated ocean temperatures.
Geopolitical Instability with Increased Tariff Risk – 80% Risk Score. These threats could disrupt trade networks and impact economies worldwide, including logistics, transportation, and manufacturing industries. The following major geopolitical events are likely to impact global trade: Red Sea disruptions, Russia-Ukraine conflict, Taiwan trade risks, Middle East tensions, South China Sea disputes, and proposed tariff increases.
More Backdoors for Cybercrime – 75% Risk Score. Supply chain leaders face escalating cybersecurity risks in 2025, driven by the growing reliance on AI and cloud computing within supply chains, the proliferation of IoT-connected devices, vulnerabilities in sub-tier supply chains, and a disproportionate impact on third-party logistics providers (3PLs) and the electronics industry.
Rare Metals and Minerals on Lockdown – 65% Risk Score. Between rising regulations, new tariffs, and long-term or exclusive contracts, rare minerals and metals will be harder than ever, and more expensive, to obtain.
Crackdown on Forced Labor – 60% Risk Score. A growing crackdown on forced labor across industries will increase pressure on companies who are facing scrutiny to manage and eliminate suppliers violating human rights. Anticipated risks in 2025 include a push for alternative suppliers, a cascade of legislation to address lax forced labor issues, challenges for agri-food products such as palm oil and vanilla.
That number is low compared to widespread unemployment in the transportation sector which reached its highest level during the COVID-19 pandemic at 15.7% in both May 2020 and July 2020. But it is slightly above the most recent pre-pandemic rate for the sector, which was 2.8% in December 2019, the BTS said.
For broader context, the nation’s overall unemployment rate for all sectors rose slightly in December, increasing 0.3 percentage points from December 2023 to 3.8%.
On a seasonally adjusted basis, employment in the transportation and warehousing sector rose to 6,630,200 people in December 2024 — up 0.1% from the previous month and up 1.7% from December 2023. Employment in transportation and warehousing grew 15.1% in December 2024 from the pre-pandemic December 2019 level of 5,760,300 people.
The largest portion of those workers was in warehousing and storage, followed by truck transportation, according to a breakout of the total figures into separate modes (seasonally adjusted):
Warehousing and storage rose to 1,770,300 in December 2024 — up 0.1% from the previous month and up 0.2% from December 2023.
Truck transportation fell to 1,545,900 in December 2024 — down 0.1% from the previous month and down 0.4% from December 2023.
Air transportation rose to 578,000 in December 2024 — up 0.4% from the previous month and up 1.4% from December 2023.
Transit and ground passenger transportation rose to 456,000 in December 2024 — up 0.3% from the previous month and up 5.7% from December 2023.
Rail transportation remained virtually unchanged in December 2024 at 150,300 from the previous month but down 1.8% from December 2023.
Water transportation rose to 74,300 in December 2024 — up 0.1% from the previous month and up 4.8% from December 2023.
Pipeline transportation rose to 55,000 in December 2024 — up 0.5% from the previous month and up 6.2% from December 2023.
Parcel carrier and logistics provider UPS Inc. has acquired the German company Frigo-Trans and its sister company BPL, which provide complex healthcare logistics solutions across Europe, the Atlanta-based firm said this week.
According to UPS, the move extends its UPS Healthcare division’s ability to offer end-to-end capabilities for its customers, who increasingly need temperature-controlled and time-critical logistics solutions globally.
UPS Healthcare has 17 million square feet of cGMP and GDP-compliant healthcare distribution space globally, supporting services such as inventory management, cold chain packaging and shipping, storage and fulfillment of medical devices, and lab and clinical trial logistics.
More specifically, UPS Healthcare said that the acquisitions align with its broader mission to provide end-to-end logistics for temperature-sensitive healthcare products, including biologics, specialty pharmaceuticals, and personalized medicine. With 80% of pharmaceutical products in Europe requiring temperature-controlled transportation, investments like these ensure UPS Healthcare remains at the forefront of innovation in the $82 billion complex healthcare logistics market, the company said.
Additionally, Frigo-Trans' presence in Germany—the world's fourth-largest healthcare manufacturing market—strengthens UPS's foothold and enhances its support for critical intra-Germany operations. Frigo-Trans’ network includes temperature-controlled warehousing ranging from cryopreservation (-196°C) to ambient (+15° to +25°C) as well as Pan-European cold chain transportation. And BPL provides logistics solutions including time-critical freight forwarding capabilities.
Terms of the deal were not disclosed. But it fits into UPS' long term strategy to double its healthcare revenue from $10 billion in 2023 to $20 billion by 2026. To get there, it has also made previous acquisitions of companies like Bomi and MNX. And UPS recently expanded its temperature-controlled fleet in France, Italy, the Netherlands, and Hungary.
"Healthcare customers increasingly demand precision, reliability, and adaptability—qualities that are critical for the future of biologics and personalized medicine. The Frigo-Trans and BPL acquisitions allow us to offer unmatched service across Europe, making logistics a competitive advantage for our pharma partners," says John Bolla, President, UPS Healthcare.
The supply chain risk management firm Overhaul has landed $55 million in backing, saying the financing will fuel its advancements in artificial intelligence and support its strategic acquisition roadmap.
The equity funding round comes from the private equity firm Springcoast Partners, with follow-on participation from existing investors Edison Partners and Americo. As part of the investment, Springcoast’s Chris Dederick and Holger Staude will join Overhaul’s board of directors.
According to Austin, Texas-based Overhaul, the money comes as macroeconomic and global trade dynamics are driving consequential transformations in supply chains. That makes cargo visibility and proactive risk management essential tools as shippers manage new routes and suppliers.
“The supply chain technology space will see significant consolidation over the next 12 to 24 months,” Barry Conlon, CEO of Overhaul, said in a release. “Overhaul is well-positioned to establish itself as the ultimate integrated solution, delivering a comprehensive suite of tools for supply chain risk management, efficiency, and visibility under a single trusted platform.”
Shippers today are praising an 11th-hour contract agreement that has averted the threat of a strike by dockworkers at East and Gulf coast ports that could have frozen container imports and exports as soon as January 16.
The agreement came late last night between the International Longshoremen’s Association (ILA) representing some 45,000 workers and the United States Maritime Alliance (USMX) that includes the operators of port facilities up and down the coast.
Details of the new agreement on those issues have not yet been made public, but in the meantime, retailers and manufacturers are heaving sighs of relief that trade flows will continue.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers. The agreement will also pave the way for much-needed modernization efforts, which are essential for future growth at these ports and the overall resiliency of our nation’s supply chain,” Gold said.
The next step in the process is for both sides to ratify the tentative agreement, so negotiators have agreed to keep those details private in the meantime, according to identical statements released by the ILA and the USMX. In their joint statement, the groups called the six-year deal a “win-win,” saying: “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong. This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”
The breakthrough hints at broader supply chain trends, which will focus on the tension between operational efficiency and workforce job protection, not just at ports but across other sectors as well, according to a statement from Judah Levine, head of research at Freightos, a freight booking and payment platform. Port automation was the major sticking point leading up to this agreement, as the USMX pushed for technologies to make ports more efficient, while the ILA opposed automation or semi-automation that could threaten jobs.
"This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports," Levine said. “Automation remains a lightning rod—and likely one we’ll see in other industries—but this deal suggests a cautious path forward."
Editor's note: This story was revised on January 9 to include additional input from the ILA, USMX, and Freightos.