Why American Logistics Companies Must Embrace Automation

by Nate Aswege
September 20, 2022

In today’s business climate, warehouse and logistics companies are under pressure like never before. With rising labor costs and an ever-growing demand for faster and more efficient shipping, finding ways to streamline your operation is more important than ever. That’s where automation comes in. 

Global Automation Trend

According to the latest statistics in the Warehouse Automation Global Market Report 2022, the global market for warehouse automation was valued at $15.21 billion in 2021. And in 2022, the market jumped by 14.86% to $17.47 billion. According to the trend, the market is projected to reach $31.03 billion by 2026.  

Who is Leading the Automation Industry?

Since 2012, China became the largest robotics industry in the world. And as of 2018, China became the first country to have a 40,000 sq. ft. humanless warehouse. Instead of needing at least 400 employees to handle the pick and pack process, they needed only five mechanics to maintain the automation robotics. As for European countries, their governments’ stances on workers’ health and safety have been a huge automation trigger in recent years. Approximately 42% of their workers are in support of automating some or all of the tasks they are currently doing. Instead of constantly getting injured and forced to take sick leaves, many workers praise that automation has a big impact on their overall improved health. 

The Lag In North American Automation

With companies reluctant to trust robotic technology and invest in improving their antiquated system, North America is now behind in the automation game. However, 90% of warehouse owners and managers admit that the pandemic has changed customers’ shopping habits and created a massive demand for shipping products with the use of automation. This drastic demand puts immense pressure on logistics companies to speed up their operations, which is only possible with automation. Automation is no longer a luxury; it has become necessary for companies to stay competitive. 

Automation Is the Solution to Labor Problems 

In addition to the need for speed, another critical factor driving the adoption of automation in warehouses is the ever-increasing labor cost and the lack of people willing to work in the warehouse environment. In January 2022, the U.S. Bureau of Labor Statistics reported 11.3 million job vacancies across America. In the meantime, the e-commerce business sector continued to escalate rapidly. Companies have no choice but to increase the wage rate to retain the current workforce and attract new employees. According to the U.S. Bureau of Labor Statistics June 2022 report, worker compensation costs jumped by 5.1% within 12 months. Still, the competition with e-commerce giants, such as Wayfair, Walmart, and Amazon, makes it difficult to raise the pay rate to attract and retain workers. 

Benefits of Automation for Warehouse and Logistics Companies

Robotic automation solves the labor crisis by doing the heavy lifting in the warehouse environment. Automation can handle the most physically demanding and repetitive tasks in the warehouse, such as moving inventory around, loading and unloading trucks, and sorting orders. The automated system is also beneficial to the employees. Instead of asking them to pull long overtime hours to meet the increasing demands, employees can work regular hours and focus on other tasks, such as customer service, requiring more human interaction. Automation also helps to create a safer working environment by reducing the need for employees to work close to one another and exposure to potential hazards, such as heavy lifting. 

Based on both China’s and Europe countries’ successes in warehouse automation, it is evident that logistics companies cannot afford to wait to invest in this technology. Automation not only helps warehouses meet the current demands but also future-proofs the business against any potential labor shortage issues. Instead of using the wait-and-see approach and seeing how other American companies are performing with their automation implementation, it is best to be proactive and stand in the front of the line than be left behind in this critical juncture of business transformation. 

Prime Robotics is America’s Warehouse and Logistic Automation Solution

Prime Robotics is a leading provider of warehouse automation solutions in the United States. Our team of experts can help you design and implement a custom automation solution for your warehouse. We offer a variety of Goods-To-Person Automation solutions, including mobile shelf and pallet robots, conveyor systems, case picking arms, and auto shelves, that can increase your warehouse’s productivity and efficiency. Contact us today to learn more about our services and how we can help you automate your warehouse operation. 

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