Automation Growth is Absolutely Booming!
A recent study by Reports and Data on the potential of growth within the Global Logistics Automation Market is startling.
Based on new data, the forecast for hardware automation sales and manufacturing is expected to reach $120 billion by 2026. The inclusion and activation of new technology hardware designed for order fulfillment, picking, and packaging is leading the expected upgrades being made by companies like Toshiba Logistics, Wisetech Global, Swisslog Holding AG, ULMA Handling Systems, Deutsche Post DHL Group, DSV Air & Sea Inc., FedEx Corp., and United Parcel Service, Inc.
Automation in the logistics industry is experiencing a significant uptick in spending, as manufacturers of automated hardware begin to introduce more efficient and cost-effective machinery and robotic technology used in the order fulfillment process.
Robotic technology builds many of these solutions. If that doesn’t speak to the circular nature and affordability of this new technology, we don’t know what does!
Increase in Demand Helping to Stimulate Rapid Automation Growth
Like any other industry, efficiency drives warehousing and order fulfillment. However, as more employees seek higher wages, without increases in productivity, it’s difficult for many companies to maintain profitability. The gradual growth of e-Commerce shopping and online marketplace fulfillment is also creating problems with processing orders quickly. This is where replacing many simple tasks with automated technology is finding a home.
The increase in spending is mainly benefiting the manufacturing companies of this specialty equipment, with most of them located in the Asian-Pacific region including Japan, China, and India. In fact, one of the largest order fulfillment companies on the planet, Alibaba, depends on automation for 70 percent of its warehouse order processing tasks. As they have set a standard on drop shipment fulfillment, and cost-effectiveness of this process, many industry leaders are following suit but investing in the automated hardware needed to complete these jobs with reduced human interaction.
The Impact of Trade Tariffs
There is a reason why APAC manufacturing companies are experiencing larger percentages of growth in robotic automation versus their European and North American counterparts. It all boils down to inconsistencies with tariffs on imported and exported raw materials.
However, APAC manufacturers have become increasingly creative with their engineering and development. In fact, they have begun to import raw materials from other, APAC-region suppliers. While the price per unit might be slightly higher through this method, the reduced tariff balances the total cost.
Additionally, using closer suppliers of raw materials simply saves money on shipping. Of course, this decreases the cost of goods.
The Impact of e-Commerce
It’s no mystery that a leading source of increased automation production is the rapid expansion of the online marketplace.
The report also indicated a gradual rise of 17.3% in online sales by 2026 as well. As long as e-commerce sales continue to rise, there will be additional need for affordable workforce inclusions. And the inclusion of automated technology expedites the process.
What is the Focus Point for Warehouse Automation?
Development of robotic technology for warehousing relies heavily on material handling and transportation. In fact, hardware-centric technology like those mentioned above represents nearly a 40% market share of existing robotic manufacturing.
Moving into the next decade, the development will shift towards the packaging and order processing segment.
Want to learn more? Reach out to the professionals here at Redwood Logistics!