Automate or stalemate

After 30 years in the industry, I can confidently say that the appetite for logistics automation in the UK today is unprecedented. The reasons for this are multifarious but recently several political, economic and social strands have come together to strengthen and accelerate the demand for warehouse automation.

Labour crisis

A key factor is undoubtedly the skill shortages that exist – and seem likely to worsen – in the logistics industry. Figures from the Office for National Statistics (ONS) show that the unemployment rate fell to 4% in the quarter to June 2018, the lowest rate since 1975. This is good news for society at large but makes it tricky for employers to fill vacancies, especially when it comes to warehouse roles that are traditionally considered physical and less attractive. The same set of ONS figures showed that the number of European Union nationals working in the UK fell by the largest annual amount since records began in 1997, continuing the trend seen since the 2016 Brexit referendum.

This matters due to the disproportionately high number of EU citizens working in the UK logistics industry – recently calculated by the Freight Transport Association to be more than 12% of the sector’s workforce. These trends increase the concerns of many that post-Brexit immigration controls will sap the flow of migrant workers into the UK, worsening labour shortages in logistics and putting upward pressure on wages. This would naturally fuel the demand for logistics automation. 

E-com pressure

What is more, this labour crisis comes at a time when the logistics industry is one of the fastest-growing sectors of the economy. This is largely due, of course, to the growth in e-commerce. According to the ONS, spending online reached a record proportion of 18.2% of all retailing in August 2018. As e-com logistics requires the picking and packing of individual customer orders – rather than bulk shipping of goods for store replenishment – it requires more labour per item than in traditional bricks-and-mortar retailing. Demand from consumers to shop online also brings with it the growing expectation for next-day delivery and even same-day delivery. According to figures from IMRG, the e-tail trade association, 56% of all online orders delivered in the UK during August 2018 were next-day deliveries. Retailers are increasingly realising that automation can help them achieve the speed of order fulfilment that they need to remain competitive, as well as providing flexibility to shift capacity between channels and deal with peaks in the most efficient way. At the same time, of course, it offers enhanced accuracy, which minimises costly returns.

Logistics 4.0

As digitalisation continues to disrupt the logistics industry, the potential of technologies such as the Internet of Things (IoT), augmented reality (in the form of intelligent picking glasses, for example), AI-enabled robotic picking systems and collaborative robots (‘cobots’) is beginning to be harnessed in UK distribution centres. However, the power of Logistics 4.0 can only be fully embraced if warehouses are automated. The falling investment cost of technologies such as robotic picking is tipping the balance for many companies, and many robotics developers are also offering their technology as a service (Robotics as a Service, or RaaS). Market research company, Technavio, has forecast that the global RaaS market will grow at a Compound Annual Growth Rate (CAGR) of almost 20% during the period 2018-2022. 

Reducing carbon footprint

A longer-term trend that underpins the desire to automate is the sustainability credentials of automated handling systems. Many consumers are aware of the environmental impact of the companies they buy from and are willing to switch allegiance in line with suppliers’ performance on green issues.

The same goes for employees, with research showing that Generation Z is conscious of the environmental record of brands when deciding which company to forge a career in. Warehouse automation can help companies minimise their carbon footprint in a variety of ways such as energy-efficient handling equipment, intelligent lighting systems, computer control of the material flow and software to optimise vehicle loading and delivery routes.

Response

How is the automated handling sector responding to the high levels of demand for its solutions? Our members report that they are having to expand their teams rapidly to keep up with the demand for quotations, solution design, project management, installation and customer service. Many of them are nurturing young people in the industry through either their own apprenticeship programmes or participation in AMHSA’s scheme, which is operated in association with car manufacturer, Toyota. This training enables AMHSA members’ apprentices to take part in a four-year programme that begins with two years of learning hands-on, high-tech engineering skills at the Toyota Academy in Burnaston, Derbyshire, followed by the apprentices building on this by acquiring industry-specific skills and knowledge at the premises of the member company. 

Meet the Experts at IMHX 2019

If your company is considering automation of part or all of its logistics operations, why not come and meet the majority of AMHSA members who will be exhibiting at IMHX 2019? Taking place at Birmingham’s NEC from 24^th to 27^th September next year, the show will once again feature the AMHSA Pavilion, where visitors will have the opportunity to benefit from the ‘Meet the Experts’ seminar programme, with informative presentations covering a range of logistics automation topics. AMHSA will also be involved in the Skills Zone at IMHX 2019, which is being delivered in partnership with Think Logistics and The Big Bang Near Me, organiser of a programme of UK-wide STEM (Science, Technology, Engineering and Maths) events. The Skills Zone will enable young people to participate in a variety of interactive features that will demonstrate logistics career options.

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