Deep Dive: The Warehouse Automation Industry Continues to Expand…
And it’s all thanks to major investments into tech-filled warehouses.
COVID accelerated the demand for warehouses and automation — with e-commerce being the driving force.
While e-commerce may have slowed last year — retailers are still investing heavily in automation to protect themselves against another supply chain shock.
But across the globe, only a fraction of warehouses are automated.
- According to the CEO of GXO Logistics, only 5% of the warehousing industry is automated (BBG).
- Interact Analysis estimates that in 2022, 20% of warehouses used some form of robotics — up from 15% in 2018 (WSJ).
And the US is still lagging — ranking seventh globally for robot density (machines for every 10K workers) — behind manufacturing giants like South Korea, Japan and Germany.
Here’s how that’s changing.
Last year, Walmart announced several new automated fulfillment warehouses — as part of its efforts to compete against Amazon. Target announced a $5B investment to revamp and even open new high-tech warehouses.
But let’s address the elephant in the room…
What about the machines stealing jobs argument? The opposite is happening in the economy.
- In the UK, warehouse worker demand is still up 43% compared to pre-pandemic levels.
- In Canada, a warehouse worker ranks among the top 15 most-in-demand jobs for 2023.
Worker salaries have increased, and companies are still having trouble filling positions — despite the economy supposedly slowing.
The problem could worsen as jobs shift towards information-based work — making automation even more important.
The benefits of automating businesses are clear: Save costs, increase efficiency, and it can even help retain workers by creating safer warehouse conditions.
The company every warehouse operator should know
Dematic — owned by KION Group (OTC:KNNGF) — is ranked as the #1 automation company in Forbes on the ARC list of top 20 global warehouse automation suppliers.
Dematic was founded over 200 years ago with simple conveyors and racking.
Today, they have over 8K global customers — serving just about every industry, including apparel, grocery, logistics manufacturing and more.
And it’s incredible how advanced their automation has become. Last year, Dematic launched several partnerships to bring full-stack automation to their partners:
- Artificial intelligence + machine learning: Partnered with Google to apply AI and ML to Dematic’s automation tools.
- Robotic industrial arms: Partnered with Dexterity to offer full-task robots equipped with a sense of touch, vision and the ability to learn.
Here’s how Dematic’s automation tools stack up:
- In most cases, an investment will pay for itself in 1-3 years — giving operators the potential to offer more competitive pricing or increase margins.
- Dematic provides regular inspection and maintenance — providing inventory and fulfillment accuracy of 99.9%.