How Automation Is Turning The Logistics Industry On Its Head
Although logistics has changed over time, automation technology is revolutionizing the industry. Innovations like robotics, augmented reality, and self-driving trucks are becoming the new norm. These tools make it easier than ever to get materials where they need to go.
The Logistics Industry Is Old-School
What is logistics? This term refers to the management of resources, including how they are purchased, stored, and shipped.
In business, logistics management refers to having the materials you need to run efficiently. It also includes making sure that products are delivered to customers in one piece and on time.
The concept of logistics is much older than you might think. The term comes from the ancient Greek word logistikós, which meant “skilled in calculation” or “rational.” In ancient Rome, “Logistikas” were military officers who ensured soldiers had the supplies they needed.
For centuries, logistics focused on transporting food and weapons to soldiers. An efficient flow of resources was often the difference between victory and defeat in war.
Technological advancements in the late 19th century brought big changes to the industry. Trains transported goods faster than ever. During World War I, planes and motor vehicles were crucial for bringing resources to the front lines.
After World War II, logistics changed; the focus turned to business, rather than warfare. However, the need to get things from point A to point B efficiently has remained.
Throughout history, logistics has relied on human labor to facilitate the movement of resources. That’s all changing now with the advent of automation.
Automation Is The New Kid On The Block
Automation is leading to what might be the biggest change in the logistics industry in history. Tasks that once required human labor are being handed off to robots and artificial intelligence. Automating certain aspects of logistics lets companies save money while meeting consumer demand.
A massive increase in online shopping is one main factor in the push for automation. Over the past decade, online sales have grown by 15 percent each year. In 2018, online retail sales amounted to $2.8 trillion. That number is expected to grow to $4.8 trillion by 2021.
This eCommerce boom has combined with a growing labor shortage. In 2019, there were 452,000 new warehouse and distribution jobs. Retailers and delivery companies struggled to fill those positions.
As a result of the popularity of online shopping and the shortage of workers, businesses have had to seek solutions. For a growing number of companies, automation is the answer.
One study found that by 2021, there will be 620,000 robots working in U.S. warehouses. That’s 15 times more than there were in 2016. Companies like Ford and GM have invested millions of dollars into the development of self-driving vehicles, including freight trucks. These statistics show just how fast automation is taking over.
Examples Of Logistics Automation Overhauling
There are automated solutions for almost every aspect of logistics, from shipping to warehouses to invoicing.
Transportation is one of the biggest markets for automation, with room for increased safety as well as efficiency. However, some people are concerned about whether solutions like self-driving trucks are truly safe.
Within warehouses, robots are getting more common, as is technology that makes human workers more productive.
Logistics Automation In Transportation TMS Systems
Transporting materials is one significant aspect of any logistics system. Due to this, most large companies have a transportation management system (TMS) in place.
An effective TMS includes selecting freight methods, carriers, and routes. It also involves the management of freight costs and payments.
Various aspects of a company’s TMS can be automated. A system can automatically select the best shipping route based on local traffic and weather conditions.
Self-driving trucks are one option, which we discuss in further detail in the next section. Aside from trucks, goods can be shipped via unmanned drones, which Amazon has already begun to use.
If there’s an issue such as a product recall, you can send an automatic alert to drivers. Alerts sent via SMS include information about the next steps drivers should follow.
Modern TMSs automatically receive updates from other systems, such as warehouse management software. This integration helps you avoid late shipments due to inventory management issues.
There are several benefits to adding automation to a TMS. It can help avoid costly human errors, such as entering an incorrect address or price in your records. It can help you select the best shipping rate without doing hours of research.
As your company grows, automation makes your TMS scalable. You’ll already have systems in place to manage an increase in shipments.
Automating parts of your TMS can even make your company more sustainable. By automatically choosing the most efficient shipping route, you’ll save gas and reduce emissions.
Autonomous Trucking, The Elephant In The Room
Many people are wary of self-driving cars. Common worries include safety, the possibility of hacking, and job loss. Safety concerns are amplified when applied to trucks, simply because of their size.
There are different levels of automation for trucks. With some options, a person is still in control of the vehicle, with some assistance from an automated system. The driver could be fully in control, and the system only kicks in to brake in an emergency. Other partial-automation modes help with staying centered in the lane or maintaining speed.
With highly automated modes, a human driver is available. They can take over in case of uncertain conditions, such as construction zones. Otherwise, the truck does all the driving.
Fully automatic modes are entirely driverless. They don’t have any equipment for a human driver, such as a steering wheel or pedals.
For now, there are highly automatic trucks on the road, but no fully automatic models. Companies, including Uber and UPS, have tested autonomous trucks with humans supervising in the cab. One reason for including a person on these test runs is to allay the public’s safety concerns.
Automation technology is likely to make trucks safer overall. Around 94 percent of all serious crashes result from human error, which driver assistance and automation aim to reduce. As technology continues to advance, the focus is on safety.
Companies are also working with hackers to ensure self-driving vehicles are secure.
What about jobs? It will be a while before fully automated trucks become commonplace. That means that drivers will still be in demand, but their role will be much easier. Moreover, there has been a shortage of truck drivers since 2003.
Some companies, like startup Embark, plan to use full automation only for long-haul trips. They’ll keep humans on board for shorter drives. Not only will truckers get to keep their jobs, but they might find them safer and easier to do.
Warehouse and Loading Dock Robotics
There are several varieties of robots in warehouses today, and the technology continues to evolve.
Examples include self-driving vehicles such as forklifts, which transport goods within the warehouse. The vehicles are often equipped with sensors to avoid obstacles.
Robotic arms are common for picking up and lifting items. They might be used to remove items from a pallet or place them into a shipping box.
Drones are useful in a warehouse, as they can provide a complete view of inventory and help spot inefficiencies.
Autonomous Mobile Robots (AMRs) are a relatively recent development. They are multifunctional and perform a variety of tasks in the warehouse. AMRs don’t need to follow a set track or route, but use sensors and cameras to navigate. AI technology allows them to “understand” what humans need them to do.
Robots can remove the need for humans to lift heavy loads and perform repetitive tasks. As a result, injuries are much less likely. The robotics themselves continue to get safer, as their sensors and responsiveness improve.
Robots are also much faster and more accurate than human employees. They can work 24 hours per day without tiring, although they do require people to perform occasional maintenance.
The improved safety, speed, and accuracy that robotics offer can all lead to significantly reduced costs.
Augmented Reality and Wearables in Warehousing
Augmented reality (AR) and wearables are some of the other technological advances in logistics.
Logistics company DHL has been at the forefront of AR with its adoption of Google smart glasses. Warehouse pickers, who select items to add to orders, wear the glasses. The glasses display order information along with instructions for where to place items on a cart. They also identify objects by scanning barcodes and other visual information.
DHL’s trials have resulted in a 15 percent improvement in productivity, along with higher accuracy rates. Workers say that the glasses are comfortable, and the AR information makes their job easier.
Other examples of wearables include barcode scanners and headsets that provide instructions. Companies such as Koamtac are developing gloves that allow users to scan information by pointing at it. Many of these options integrate with a cloud-based system or a smartphone app that stores data.
What The Future Holds For Logistics Industry Automation
Companies that embrace automation will enjoy a range of benefits, from savings to happier customers.
Overhauling existing systems is expensive, but will typically pay off in the long run. Automation leads to fewer errors and increased efficiency, among other benefits.
Logistics automation is leading to improved customer service and increased customer satisfaction. Orders are more accurate and arrive faster. The partial automation of trucking leads to safer roads for all drivers. Consumers who shop online have higher expectations than ever and these solutions allow businesses to meet them.
Employees also benefit from automation. With technology at their fingertips, they’re able to be more productive. Robotics in warehouses and loading docks reduce the likelihood of injuries.
Like it or not, more and more aspects of logistics will be automated in the future. In 2018, the logistics automation market was valued at $49.2 billion. By 2024, that number will grow to $96.2 billion.
Want to learn more about how technology is shaping the business world? Sign up for Fora Financial’s newsletter today.
Frequently Asked Questions
Will automation lead to fewer jobs in the logistics industry?
One factor behind logistics automation is that there’s already a labor shortage. In the past few years, there haven’t been enough workers to fill all the available warehouse and distribution positions. Automation has occurred in response to a lack of workers, not the other way around.
Some experts do predict layoffs as a result of automation in certain areas of logistics services. Automation companies are working to create new or revamped jobs for those workers.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.