Robot-Operated 'Dark' Warehouses Are Slow To Take Off

Many businesses are looking into using robots to staff warehouses, but it might take a few years for tech to catch up.

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In order to help with labor shortages, more than a fifth of logistics companies have made investments in automation, particularly as they dealt with the pandemic's spike in e-commerce orders. Some businesses are looking into full automation, which uses few workers. However, these "lights out" or "dark" warehouses—so named because robots don't require as much lighting as people do—require significant up-front investments and still have to contend with the limits of robotic technology, such as the inability to neatly pick up various types of things.

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Several warehouse owners are looking into ways to boost automation as a result of weighing costs and benefits in the current labor market, according to operators and executives.

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The most current data available show that the average pay for Americans working in the warehousing and storage sector was $43,820 in May 2021, up from $41,110 in May 2019.

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"You have the problem of having too few and expensive people. Sean Wallingford, president and chief executive of the Americas for warehouse technology business Swisslog Holding AG, said that it makes the case for automation much easier to make. "Therefore I believe we'll see that drive toward it continue."

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Apo.com Group, a German online pharmacy company, constructed a 220,000-square-foot warehouse in the Netherlands in 2019. The facility employs automation to process 25,000–30,000 orders per day with 20 staff working three shifts. According to Michael Fritsch, the company's founder and former CEO, the corporation invested more than $100 million in the facility and the automation.

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Mr. Fritsch claimed that in order to complete the same number of orders, a manual warehouse would have needed nearly 400 workers and twice as much space. According to him, it would have been difficult to locate so many eligible candidates and to pay their higher salary because he would have needed to hire licensed pharmacy specialists for those positions.

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This many pharmacists are not typically found in a single town, so that is the issue, he said. "Without [the robots], we wouldn't be able to achieve this."

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Given the generally regular sizes of the items, the facility uses robotic picking arms from RightHand Robotics Inc. of Somerville, Massachusetts, which can pick 97% of the pharmacy's inventory, according to Mr. Fritsch.

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According to Trade Algo, the use of robotics in warehouses is expected to increase from 15% in 2018 to 20% in 2022. Training robots to mimic the movements of a human hand so they can handle customer orders of all shapes and sizes represents one of the most difficult challenges in the development of warehouse automation.

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According to Luke Jensen, CEO of Ocado Solutions, the technology company's grocery partnership section, individual items are still primarily hand packed for delivery at the company's warehouses. Along with grocery behemoth Kroger Inc., Ocado Group is developing automated fulfillment facilities across the United States.

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According to Mr. Jensen, teaching a robotic arm to pick up more than 50,000 distinct food items in a variety of packaging is difficult.

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In addition, Ocado had three warehouse fires in the span of three years owing to robot collisions, electrical problems with battery chargers, and a fire that started in a trash packaging container outside a warehouse. According to Mr. Jensen, after the initial incident in 2019, the company implemented steps to reduce harm from further fires.

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The e-commerce business Amazon.com Inc. last year debuted a new mechanical arm named Sparrow that it claims is capable of identifying and handling millions of goods, or nearly 65% of all the items in Amazon's inventory. Prior to being packaged, the device will initially be used to group together the products in each order. 

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According to Mr. Wallingford of Swisslog, the dexterity limitations of robots make it simpler to automate some warehouses than others depending on how commodities are packaged.

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Mr. Wallingford remarked, "If it was just whole cases traveling from point A to point B, we can automate that quite well now.

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He claimed that component selecting for e-commerce orders is difficult because larger shipments holding bulk goods must be divided up into smaller pieces. He added that those jobs typically demand humans.

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Investment in an autonomous system is a significant financial commitment, according to senior analyst Rueben Scriven of Interact Analysis, as the facilities can cost hundreds of millions of dollars. Few lights-out warehouses are still in operation today, he claimed.

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Mr. Scriven remarked, "We're still very far from this. "I believe the eventual purpose [of automation] actually is empowering humans, making them more productive," says the author.