What's The Future of Warehousing in Logistics?

Is the Next Frontier of Warehousing Already Here?

By Chris Crutchley on March 30, 2022
In the last few years, the term “automation” is everywhere in logistics. I’d like to take a careful look at what industry-wide adoption of automation could look like.

In the last few years, the term “automation” has been peppered across the pages of logistics publications worldwide.

The term automation refers to any technology that reduces human intervention. That idea is now being implemented across modern logistics – particularly in warehousing. Why warehousing? It is one of the areas that stand to benefit the most from potential upgrades and efficiencies from automation. 

Picture a warehouse with nimble robots stocking shelves and forklifts loading items onto pallets of their own volition. One with management infrastructure smart enough to compile warehouse data and make suggestions to improve efficiency. With all these possibilities, it’s no wonder that the sector is developing so rapidly – with the market cap for warehouse automation projected to reach almost $70 billion by 2026.

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I’d like to take a careful look at what industry-wide adoption of automation could look like.

What does warehouse automation look like today?

Although it's not as flashy as autonomous robots, warehouse management systems have started a revolution in warehouse efficiency. Without it, those “next day delivery” fulfillment speeds we have come to expect today would not be possible. Things like real-time inventory visualization and digital item scanning save warehouse workers scads of time.

However, these automated processes are not necessarily replacing human workers. They are currently used to take over tedious, labor-intensive processes where humans are very likely to commit errors.

Data on Amazon shows that using pick and pack robots freed up 40% more warehouse space on average when compared to warehouses that weren’t using automation. Based on those results, it might seem like the best solution for the warehouse operator is to perform a full-scale automation makeover on all parts of the floor.

However, there are still several barriers to an entirely automated logistics process.

RELATED: How Technology is Transforming Logistics: The Shipping Edition

The problem with scale in automation

Today, flexibility and precision are still substantial barriers to fully-automated warehouses.

At an e-commerce shoe company, storage, inventory, and packing can be improved through automation. But can you ask a robot to tape a broken package or tell if an item has been tampered with?

Today, businesses that succeed can adapt the tech that makes sense for them and manage the rest the old-fashioned way.

Take Australian 3PL firm eStore Logistics, for example. They have a fleet of over 250 robots throughout Australia, yet they have a skilled labor force to take care of the packing in e-commerce retail fulfillment. That’s probably how things will stay at most businesses for some time still.

There’s no turning back now

In newer markets like the Asia Pacific region, the short-term benefits of automation are still hazy. 

Labor is cheap and the costs to implement and maintain a fleet of robots are much harder to justify. However, even these businesses may have to implement automation simply because the industry demands it.

For example, our team at CBIP is dedicated to working with warehouses that we think effectively utilize technology in their process. Our key selling point is clear data for clients on their shipment status. To do that, we need partners that can integrate with our software and that requires at least a degree of automation in their processes.

We are far from the only ones asking the industry to step up their game to run logistics more efficiently. We hope that by setting the bar here, we can pave the way for a much more transparent (and efficient) industry.

About Author

Chris Crutchley

Chris Crutchley is CBIP’s director of operations and finance. He has over a decade of corporate finance and operational expertise throughout the Asia Pacific.

In logistics, Chris strives to continuously innovate and challenge the industry’s norms in order to offer clients world-class service that emphasizes clear communication.

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