The 2018 peak season is here. Despite the usual onslaught of Atlantic storms and the added fears of an expansive trade war, the e-commerce-driven holiday demand promises to stress the supply chain in unprecedented ways.
To keep up with this increasing scale, more links in the logistics chain are turning to automation. In essence, the far-off logistics future starts this peak season.
Here are a few key places in the logistics supply chain using cutting-edge technology this holiday season.
Warehouses and Stores
Robots are here. As labor demand rises, e-commerce and logistics businesses are increasingly integrating automation into their order fulfillment. Companies like Walmart are using aisle-roaming robots to deliver real-time information on product purchases, allowing in-store demand to determine stock and inventory.
At warehouses, companies have embraced sorting and picking technology that works both side-by-side with human workers and autonomously. Companies are using robots to help warehouse employees process multiple orders simultaneously, driving order-fulfillment optimization despite the shortage in available labor. Logistics company Geodis, for example, is using small aisle-roving robots that identify the next package an employee needs to pick for delivery.
On the autonomous end of warehouse technology, Gap Inc. is testing a sorting-and-picking robot from robotics engineering company Kindred. The arm can read barcodes and pick the next item to ship, then prepare the item as part of a customer’s order, all on its own. And if the arm hits a snag (like an unreadable barcode), it’ll automatically call Kindred, where an employee can complete the order remotely.
Ports around the world have been experimenting with automation and blockchain technology over the last few years. (For more on blockchain and logistics, see here.) Ports are becoming better integrated with the ships and shippers that use them through local software platforms and blockchain-backed initiatives. This is all part of a push to decrease the turnaround time associated with international trade security while granting customers a new level of transparency.
But automation in terminal operations will be tested this holiday season as well. Ports like the Port of Los Angeles’s TraPac terminal are using technology like automated pickers to load and offload containers with greater efficiency.
For US ports, this holiday season is a crucial moment for more automation at terminals. While the benefits of automation at ports is clear, as covered by Fortune earlier this year, advanced port technology remains very expensive. This peak season, especially along the US West Coast-Asia lanes, will go a long way in determining how quickly we should expect US ocean ports to embrace automated terminal technology and its associated costs.
Although we’ve been hearing about automated last-mile delivery for years now, we’re not quite at the day when delivery drones and driverless vans are bringing customers their packages. But remember: holiday season 2017 was one of the busiest ever, and deliveries fell behind schedule at all major package delivery services last year. As we wrote above, if warehouses are promising to increase order fulfillment efficiency, the added strain on deliveries could push the last-mile link in the supply chain to its breaking point. It’s almost guaranteed that the automated last-mile is coming very soon to help alleviate the pressure of rising e-commerce demands.
Ultimately, think of holiday season 2018 as the first major stress test for an automation-assisted logistics supply chain. Sexy initiatives like package-sorting robots and delivery drones may get the most attention. But the supply chain is a connected process, and every link interacts with every other. Better first-mile technology, for example, can change the transit time demands on carriers, or the turnaround time of loading and unloading containers at port.
As technology at each link interacts, it either develops a new, synergized supply chain, or it reveals the weak links in the logistics process.
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