While automation and AI are set to transform the way humans work across many organizations and verticals, McKinsey estimates that the transportation and warehouse industry possesses the third highest automation potential of any sector, having found over 50 technologies that could be used to automate some part of the supply chain.
Automation is already here
According to Visual Capitalist, 55% of retail, management and logistics professionals are already investing in warehouse automation and 47% in predictive analytics. This trend has been partially driven by a growing shortage of labor. Over the past decade, unemployment rates across the EU have almost halved while the number of roles required in distribution centers continues to increase, especially over holiday peak season when labor is most scarce. The situation is similar in the US, where unemployment levels have reached their lowest levels in half a century.
The automation trend has also been impacted by increasing demand from online retailers. A recent survey found that organizations estimated that e-commerce in 2020 would account for half of all sales, up from approximately one third the year prior. This rise in e-commerce, accelerated by the Covid-19 pandemic, is seeing a greater investment in automation technologies within supply chain processes to meet fast evolving multichannel and omnichannel requirements as well as same-day and next-day delivery.
Finally, the greater focus on transport and logistics automation has been enabled by promising advances in technology. For example, new pallet-handling systems have been found to cut shipment processing time by 50%.