Automation and mechanization is nothing new — it has been happening in factories since the Industrial Revolution, albeit slowly. But now emerging robotic technologies and the surge in Internet shopping are propelling a growing mechanization in the logistics sector.
Internet shopping has soared in popularity in recent years, with 205 million U.S. citizens browsing, comparing prices or buying online at least once in 2015, a number projected to reach 224 million by 2019. While that growth has come from the multitude of retailers offering products on their own websites or shopping portals, the behemoth of the industry is of course Amazon and it's no surprise it has invested heavily in robotics.
Amazon and Kiva
Amazon revenues are in the tens of billions of dollars per quarter and the amount of goods it moves worldwide is staggering. That's no doubt why the internet giant decided that its warehouses were in such need of state-of-the-art robotics that it made Kiva Systems its second largest acquisition ever.
Kiva Systems was launched in 2003 as a new way to pick, pack, and ship orders. Instead of goods moving around the warehouse on human-operated forklifts or conveyor belts, with Kiva, warehouses are reorganized with portable storage units and barcode stickers to allow its robots to navigate. These bots can pick up items as soon as an order appears in the system and take it to a human operator, greatly improving the efficiency and accuracy of warehouse logistics.
Kiva Systems used to have a number of clients, including Gap, Crate & Barrel, and Saks 5thAvenue, but since the Amazon acquisition in 2012, those contracts have been allowed to lapse. The firm is now known as Amazon Robotics, leading market observers to speculate that Amazon is keeping this startup's technology all to itself. Amazon has made it clear that it believes the future of its business lies in mechanizing its warehouses and that's why it made such an early move in this sector.
More Robot Movers and Shakers
However, Kiva isn't the only warehouse robot around. Corporations looking for startup acquisitions or partners have a host of firms to choose from. European engineering firm Siemens invested in Munich startup Magazino just last year, taking a 49.9% stake in the company, which has developed its own mobile shelf robot Toru. US startup IAM Robotics is developing a mobile robot with an arm on top and a camera system that can navigate an existing warehouse and pick up items more similarly to how a person would. And Fetch Robotics, which recently received $23m in venture capital, is working on a similar solution with a robot arm that drives around on a mobile base to pick up items.
Warehouse robots aren't just a route to improved efficiency and accuracy, they're fast becoming a necessity. As the world's largest logistics firm, Deutsche Post DHL, pointed out in its Robotics in Logistics report, soon it won't be possible for companies to find the human labor they need for warehouses, both because of the huge growth in e-commerce and because populations — and the available workforce — is shrinking in some countries.
Robots on the Road
These factors are also driving the changes that are happening when the goods leave the warehouse and hit the road. Self-driving cars have an obvious potential for freight movement on land in the form of self-driving trucks, removing the need for human drivers and the associated safety-mandated rest stops and hours.
Unmanned aerial vehicles are another potential avenue for logistics robotics — and one that industry titan Amazon is also keen on — although regulatory and public safety issues are holding up the day when all our parcels arrive by drone to our backyard.
A much less glamorous but no less revolutionary aspect of improving technologies is the idea of efreight – paperless movement of goods. This requires the adoption of standards and best practices that would allow companies to move goods around the world and exchange the necessary data and documents electronically. Both governments and industry are strongly motivated to make this a change that will work and that has led to investor interest in freight startups.
Startup Flexport, which was launched in 2013, had a $20m funding round led by Peter Thiel's Founders Fund last year. It's one of the first international freight forwarder and customs brokerages built around an online dashboard, aiming to help digitize global shipping.
From the warehouse to the road, mechanization and digitization are changing the face of the logistics sector and robotics is sure to have an increasingly huge impact on the industry. These changes affect not just the logistics industry, but ultimately the retail world too, through their influence in e-commerce and goods movement. That means corporations in logistics and retail need to be looking to robotics startups to provide the innovation they'll need to stay competitive in the future.