CSCMP's Supply Chain Quarterly
August 17, 2019
Forward Thinking

Report: 50,000 warehouses to recruit robots by 2025

DCs look to automation to handle the crush of e-commerce fulfillment volumes.

The number of warehouses using commercial robots is on the verge of leaping from 4,000 to 50,000 in the next seven years, as users seek more efficient e-commerce fulfillment platforms to support same-day delivery, a new industry study predicts.

By 2025, over 4 million commercial robots will be working in some 50,000 warehouses, up from just under 4,000 robotic warehouses in 2018, London-based market research firm ABI Research says. The report did not estimate how many robots are installed in those sites today.

In addition to the need for more flexible, efficient e-commerce production, the trend will be driven by the increasing affordability and return on investment (ROI) on infrastructure-light robots in comparison to traditional, fixed, mechanical automation or manual operations, ABI said.

"Flexibility and efficiency have become primary differentiators in the e-commerce fulfillment market as retailers and third-party logistics [providers] (3PLs) struggle to cope with volatile product demand, seasonal peaks, and rising consumer delivery expectations," Nick Finill, senior analyst at ABI Research, said in a release. "Robots enable warehouses to scale operations up or down as required while offering major efficiency gains and mitigating inherent challenges associated with labor and staffing."

At the same time as they are becoming more affordable, robots are also becoming increasingly adept at performing traditionally harder-to-automate tasks, thanks to technology advances in computer vision, artificial intelligence (AI), deep learning, and robotic mechanics, the firm said.

"By lowering the barriers to adoption for robots in the warehouse, vendors are disrupting the wider logistics value chain," explained Finill. "If advanced automation becomes possible for mid-size e-retailers, they will be able to fight back against the dominant players and also bring fulfillment operations back in-house, disrupting the relationship between retailers and 3PLs."

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